Aug 28, 2012
Some will stay marginalised – economistBack
Africa|Education|Standard Bank|System|Africa|Europe|China|South Africa|United States|Goolam Ballim
"There is a fair section of South African society that will forever be outside of the formal employment system, simply because they do not have sufficient capabilities to participate in the economy," he said.
Ballim said this sector would be forever excluded because their intellectual capabilities were crippled during the apartheid era.
"If you have been exposed to an education system that did not render you able to participate in a modern economy – which requires fairly sophisticated skills – the chances are you will not be able to get access to, let alone the opportunity of, decent pay, or a job that can satisfy middle-class aspirations," he said.
This was why government had to provide social grants, in order to mitigate the legacy of the apartheid era.
Ballim was speaking at a briefing to highlight global economic problems and their impact on the South African economy.
He said the European economy would experience weak growth for a long time.
"Over the next 20 to 30 years, Europe is going to see a roughly 14% shrinkage in its workforce," he said.
At the same time, the proportion of youths not yet working would rise.
Poor economic performance in Europe and the United States would impede global economic growth, Ballim said.
In the past decade, China had been able to achieve double digit growth, but it would be hard for the Asian economic giant to reach its targeted eight percent growth in current global economic conditions.
"China has grown to become the world's second-largest economy. It has a role to play, even though it was not the cause... of the crisis. It has a role to play in providing mitigating measures that impact the rest of the world."
China had grown to be South Africa's largest trading partner over the past decade, surpassing Europe and the US.
It accounted for 12.5% of South African exports.
Commodities made up two-thirds of South African exports, and China was the largest importer of local commodities.
Ballim said China's relations with South Africa extended far beyond the commodities it bought from South Africa.
"If China grew at six percent, it would encourage a recession in the commodities markets," he warned.
He said weak growth in China, Europe and the US – which made up two-thirds of global GDP – would translate into slower growth in the global economy.
South Africa had performed better than other emerging economies before the financial crisis. But this had changed, and the country was now lagging behind other emerging markets.
Ballim said household spending in South Africa had slowed down and would "reinforce its slowing momentum".
Household spending had grown by six to seven percent a year before the crisis, but had not picked up during the economic recovery to stimulate further growth in South Africa.
On fixed investment, which accounted for 20% of GDP, Ballim said the country had recently depended on parastatals.
Two-thirds of investment which emanated from the private sector was static.
On the recent Marikana mine shooting in North West, Ballim said: "The events in Marikana must stand as a scar on the conscience of every single South African."
Edited by: SapaComment Guidelines (150 word limit)
Other Macro and Micro News
Updated 6 hours ago International private equity has become the fastest growing source of investment in sub-Saharan Africa but better risk management tools and a way to develop whole sectors was needed to make sure benefits are spread more widely, a study found. In recent years,...
Botswana will use some of its $8.5-billion in foreign exchange reserves to stimulate the economy after a drop in diamond prices hit growth in the world's biggest producer, President Ian Khama said on Monday. Botswana in September slashed its 2015 growth forecast from...
The ANC has reaffirmed its intention of replacing the "willing buyer, willing seller" land redistribution policy. "There was a very strong call for the removal of willing buyer as a policy [in 2005]... and [at] subsequent ANC conferences in 2007 and 2012 that matter...
Updated 29 minutes ago Trade conditions continued to be in negative territory in September, with the South African Chamber of Commerce and Industry’s (Sacci’s) seasonally adjusted composite Trade Activity Index (TAI) measuring 46, compared with 47 in August. The nonseasonally adjusted TAI...
Updated 58 minutes ago South Africa's loan guarantees to State-owned companies currently stand at R469.4-billion ($35-billion) and the firms have utilised R225.9-billion of the facility, National Treasury Director-General Lungisa Fuzile said on Tuesday. The government has vowed it would...
Updated 1 hour 3 minutes ago While South Africa’s National Treasury has completed most of the preliminary work into the country’s proposed nuclear build programme, all the details, including the cost to the fiscus, remained classified, MPs were told on Tuesday. Briefing Parliament’s standing...
Recent Research Reports
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
This Week's Magazine
Updated 6 hours ago Engen Driver Wellness, the mobile health awareness initiative, continues to make a tangible difference to the lives of the country’s bulk truck operators with increased driver participation in voluntary screenings and improved health scores. Now in its fifth year,...
At the sixth IQ Business conference held in Sandton last month, a panel of business leaders and academics advocated that business reclaims the initiative to spur growth in South Africa amid fragmented and haphazard political direction. Management consulting firm IQ...
The building industry is an essential component of the South African economy as it contributes about 15% to the gross fixed investment that drives the economy. However, with the country’s economy going through a tough time currently, this, in turn, reflects on the...
The recipients of the 2015 South African National Energy Association (Sanea)/South African National Energy Development Institute Energy (Sanedi) Awards were announced at a ceremony and banquet in Sandton last month. Sanea chairperson Brian Statham named Exxaro CEO...
As South African information technology (IT) firm EOH posted another full year of strong growth, CEO Asher Bohbot, known for his frank words, people-centric management style and stoic humanism, attributed the company’s continued South African and African growth to...