The country may have received a downgrade from two rating agencies, but so have many other countries even in Europe and elsewhere. It is the sign of the times. The world is going through a period of serious economic upheaval.
South Africa was privileged to have an icon like President Nelson Mandela as its first democratically elected President. However, this does not make the country immune from economic, social or political challenges at certain periods, more so given the legacy arising from colonial oppression and apartheid.
Despite the challenges, South Africa is getting many things right.
On the economic front, the economy possesses the necessary dynamism to position the country as a competitive player in a difficult global economic environment. In direct contrast to the Economist article, a strong vote of confidence on South Africa was given in the last week by the international business community with the country’s recent inclusion in Citigroup’s World Government Bond Index. South Africa has attracted strong flows of foreign investment into its bonds as investors have switched to emerging markets. South Africa will be the first African country and the fourth emerging market to be included in the index.
The promotion is also significant because it can potentially bring down the cost of borrowing for the country. An estimated $2 trillion worth of funds track the WGBI index. South Africa has met with all the required criteria for entry into the WBGI for the third month running and, as a result, has been allowed into the prestigious WGBI Champions League of countries.
Our success is also visible when benchmarking the country against other emerging market economies such as the BRICS and Next 11 countries.
In the recently issued World Economic Forum Report on Global Competitiveness that benchmarks the performance of 144 nations, including South Africa, the country performed particularly well against the report’s financial pillars. With regards to financial market development, South Africa ranks first amongst the BRICS nations, and 3rd overall in the world. Other key areas where South Africa performed well in comparison to its fellow BRICS nation members were with the Legal Rights Index, the Regulation of Securities Exchanges, the Efficacy of Corporate Boards, and the Strength of Auditing and Reporting Standards, where South Africa was placed 1st against each pillar. Again, these are critical areas that can encourage inward investment.
This past week, we welcomed the good news that tourist arrivals to South Africa had increased by an impressive 10,5% during the first six months of 2012, which is double the global tourism growth rate of 5%. This means our country continues to be a popular destination to many around the world.
At a social transformation level, government policies have extended basic services like water, electricity, sanitation, housing or social security to millions of people for the first time in their lives, in the past 18 years of freedom.
Dramatic achievements have been scored in the fight against HIV and AIDS. We have moved from very difficult times indeed on on HIV and AIDS to a success story in a short space of time due to progressive leadership by government assisted by civil society on the matter. The rate of new infections has decreased from 1.4% to 0.8% in the 15-24 age group.
We now have 1.7 million South Africans on antiretroviral treatment which has improved life expectancy. We have about 2 948 public health facilities now initiating patients on antiretroviral treatment compared to 495 in January 2010. One of our greatest success stories is the remarkable 50% reduction in mother-to-child transmission of HIV from about 8% in 2008 to 3,5% in 2011.
Remarkably, 20 million people have to date been tested for HIV through the HIV Counselling and Testing Campaign, launched publicly by President Zuma in 2010. This indicates that the stigma around the disease is being eradicated, which will assist prevention efforts. The rate of new HIV infections looks set to decline over the coming years. Life expectancy is dramatically improving in South Africa due to these important policy interventions and sound leadership.
At the economic level, our New Growth Path framework focuses us on a growth and employment creating path. Our intention is to boost job creation in six pillars – tourism, infrastructure, mining, manufacturing, agriculture and the green economy. Out of the six, we have this year singled out infrastructure development for an intensive focus, led by the President through the Presidential Infrastructure Coordinating Commission.
Building on the 2010 FIFA World Cup infrastructure build success, we have unveiled a 20 year infrastructure development programme that will cost around 4 trillion rand over the next 15 years. We will spend around R844 billion over the next three years. We are truly a country at work for a better life.
Just two weeks ago, we were proud to launch the Eastern Cape schools refurbishment programme, where we are replacing 49 mud schools with modern schools. There are currently more than 2 000 school refurbishment projects across the country. In addition, 886 health facilities are being revitalised. We are also building two new universities in Mpumalanga and the Northern Cape, infrastructure that will expand access to higher education to the two provinces.
We are building and improving rail, roads, ports, energy, broadband and roads around the country. South Africa’s manufacturing, automotive, ICT, petrochemical, and service sectors remain sophisticated and globally competitive and ready to attract local and foreign investors.
We are also planning ahead, towards the next 30 years. Our long-term planning blueprint, the National Development Plan, outlines our vision of dealing with inequalities, social injustice, and the developmental challenges our society, leading towards a prosperous society.
At a political level, we have consolidated democracy and have strong institutions formed in line with the country’s progressive Constitution.
We have noted the tendency of late to exaggerate the debates and contestation within the ruling party, the African National Congress as being as symptom of instability. ANC conferences are no more controversial than political dynamics in many other countries. The robust debates, though uncomfortable at times, result in policies that are agreed to by the majority which ensures stability and cohesion. The democratic exercise should be seen as a strength rather than a weakness for the country
The violent wildcat strikes that we have experienced are a worrying factor as they should be in any economy, and the situation is being attended to collectively. The strikes should not be exaggerated, as intimated by the Economist, to conclude that South Africans economic fortunes will decline majorly against its African counterparts. Any such reckless conclusion would not have taken into account the strides that have been made in anchoring economic growth that have weathered the storms that even the developed countries of the North could not survive.
While the banking system of the North had to be subsidized by the governments, South Africa’s banking sector demonstrated absolute resilience and managed to shield the economy from the economic meltdown that continues to affect many developed economies.
Another of South Africa’s strengths is the ability of its people to come together when there is a problem and search for a solution. In response to the economic meltdown and the wildcat strikes, President Jacob Zuma convened the High Level Dialogue on the Economy, bringing together government, business, labour and the community sectors. A similar initiative during the 2009 recession worked tremendously to cushion the economy and protect jobs.
The outcome of the dialogue was an economic package designed to stabilize the labour environment, improve living conditions of mining communities and to further promote job creation.
More importantly, South Africa is privileged to be part of Africa, which is rapidly becoming the continent with the fastest- expanding economic regions in the world. This steady upward growth path is expected to gain momentum and resemble the long-run growth curves that were experienced in East Asia over the past 20 years.
South Africa is moving forward towards prosperity, under the very able leadership of President Zuma and his Cabinet, working in equal partnership with the other arms of the State – the legislature and the judiciary. They are supported by various partners in society; labour, business, faith-based organisations and many others that want to see South Africa succeed.
We will face hiccups here and there, and now and then because of existing inequalities and poverty and the economic climate globally, but we remain firmly focused on building a united, non-racial, non-sexist democratic and prosperous South Africa.
Enquiries: Mac Maharaj on 079 879 3203 or firstname.lastname@example.org.
Issued by the Presidency