SOUTH AFRICA

What is the state of our nation? SARMA - 18 June 2012

We have come a long way since 1994…

Miracle transition to democracy Black snr managers up from 4% - 26% Percentage of people below $2 a day: down

from 12.1% - 5% Highest tax bracket: down from 43% - 40% Murders per day: down from 71- 44 Deaths per 1000 below 5 y down from 62-49 Consumer inflation: Down from 9.2% – 5%

Or not?

Unemployment up from 31.5 – 35.4% (4.2m people)

Black income as percentage of white income down from 21.5 – 20.4%

Registered security guards up with 256% (from 115 331 – 411 109)

Percentage people with HIV up from 1.5% - 17% of population

Number of farms down from 60 901 – 39 966

On balance?

Is South Africa moving in the right direction?

1994 = 43% 2011 = 55.3%

Answer depends on individual or collective vantage point (perception is stronger than fact)

Weakness 1: Incapable state

“Our development strategy requires a capable state and active citizens” (8)

“A capable state focussed on service delivery requires a passionate… public service” (13)

Only 68% spent of infrastructure budget in 2011 (R178bn - R260bn; local government!)

Examples of mining and agriculture (5) “The time has come to confront uncertainty” (31)

Report to Parliament last week….

Budget spend over 95% but delivery targets below 40%

Fruitless expenditure = R3.7bn

UN Human Development Index

HDI South Africa

1980 = 0.6591990 = 0.6981994 = 0.6442005 = 0.6782007 = 0.683(2011= 0.619)

Weakness 2: Culture of corruption

New procurement rulesNew chief procurement officerOfficials with unspent budgets to held

liable

Counter-evidence in both public and private sectors is quite strong

Corruption Perception Index

Relative CPI scores for 2011

1. N Zeeland = 9.52. Denmark = 9.45. Singapore = 9.246. Mauritius = 5.164. S Africa = 4.1154 Zimbabwe = 2.2182 Somalia = 1.0

Weakness 3: Education

Good participation rate in primary edWeak throughput rate in high schoolDrop in standards for NSCMisfit of post-school structuresUniversities: low participation and low

throughputNB This is the key source of

unemployment/unemploy-ability

Weakness 4: Poverty and inequality

Dangerous levels of unemployment 18-

24 year olds Growing inequalities – social alienation

and the demand for economic liberation“Service delivery protests”

Gini Coefficient

The Gini coefficient is a summary statistic of income inequality that varies from 0 (in the case of perfect equality where all households earn equal income) to 1 (in the case where one household earns all the income and other households earn nothing).

(Source: http://www.sarpn.org.za/documents/d0000990/)

Top 10 Countries with lowest Gini Coefficients(Source: adapted from: http://en.wikipedia.org/wiki/List_of_countries_by_income_equality)

Gini Coefficient Column1 Column2

Rank UN Figure Country

1 0.247 Denmark2 0.249 Japan3 0.25 Sweden4 0.254 Czech Republic5 0.258 Norway6 0.258 Slovakia7 0.262 Bosnia & Herz8 0.269 Finland9 0.269 Hungary

10 0.281 Ukraine

South Africa’s relative position

Gini Coefficient Column1 Column2

Rank UN Figure Country112 0.538 Honduras113 0.549 Chile114 0.551 Guatemala115 0.561 Panama116 0.57 Brazil

117 0.578 South Africa118 0.584 Paraguay119 0.586 Colombia120 0.592 Haiti121 0.601 Bolivia

Opportunity 1: Use democracy

Defend democratic freedoms/institutionsExpose and hold leaders accountableDiminish one party power to below 50%Constitution as supreme

law/Independent judiciary

Ordinary people are NOT powerless

Participate in civil society Anti-retroviral medicine Arms deal re-openedE-toll saga

Opportunity 2: Ride the global power shift

The wave of the new global order

From West to East and South From G8 to BRICSFrom old economies to emerging onesFrom commodity exports to beneficiationFrom weak to excellent infrastructure

(over R800bn)

RSA in new global order…

Stable macro-econ and monetary policies Stable non-toxic financial/banking system Independent Reserve Bank Efficient tax system with on-target collection Attractive governance rules (JSE rules, King

III, FICA) Positive economic growth in global context

Opportunity 3: Green economies

SA is perfectly placed to develop leading technologies in wind and solar energy

Well positioned to benefit from eco-tourism (quickest job creation)

Opportunity 4: Positive mindsetOpportunity 4: Positive mindset

Positive attitude makes the difference

If a situation is on the knife’s edge: A positive mindset “creates” positive

effectsA negative mindset is a self-fulfilling

prophecy My personal verdict: SA one of the best

bets in the period 2012-2020

Thank you very much!

Piet Naude Nelson Mandela Metro University Port Elizabeth