The World Economic Forum’s annual meeting in Davos, Switzerland will be held from the 20 to 23 January 2016 under the theme “Mastering the Fourth Industrial Revolution”. WEF Davos takes place in a challenging global environment for both governments and business.
The deterioration of the global economic outlook in recent months has resulted in slower global growth that has led to the weaker performance in several important developing countries, including China.
Moreover, the weakness in commodity prices is a concern for major commodity exporters such as South Africa. The fall in commodity prices is unlikely to reverse and will have a sustained impact on emerging market economies.
Importantly, the changing sentiment towards emerging markets particular in capital flows is a cause for concern given the role it played in averting a deeper and sustained global recession during the 2008 global downturn.
The depressed trade volumes and turbulent global capital markets underscore the need for nations to build resilience and act cautiously in the period ahead.
In this difficult global context, South Africa is intervening strategically and more decisively to restore the momentum of economic growth. It is also addressing issues at a local level that have impacted confidence in the economy.
The National Development Plan provides a basis for collective actions required to stabilise the economy, build confidence, raise the level of investment and return South Africa to a path of inclusive economic growth.
Stronger measures to restore a sustainable fiscal path, taking account of the weakened outlook for the global economy and its domestic consequences have been endorsed at the highest level of government.
South Africa has proved to be a resilient economy which is the outcome of the solid economic fundamentals that have been painstakingly laid since the advent of democracy.
The country’s prudent fiscal management and monetary policies support macroeconomic stability, promote competitiveness and increases the economy’s outward orientation. South Africa’s positive attributes continue to outweigh its challenges which are being addressed through dedicated programmes and plans.
Team South Africa is taking the following key messages to Davos in 2016. Here’s a summary of salient themes:
- The macro economic framework has shielded the economy from the full brunt of a challenging global economic environment and volatility in global capital markets.
- Government through its fiscal consolidation measures is committed to continued fiscal prudence and preservation of investment grade credit ratings.
- Private partnerships in energy through renewable programs are fast contributing to power availability over and above the large energy infrastructure built.
- Mature banking institutions and world class capital markets make for easy access to capital.
- Adoption of a socio economic impact assessment system (SEIAS) by cabinet in September 2015, seeks to avoid policy contradictions and preserve business friendly environment.
- Efforts at Nedlac to foster a stable labour environment are yielding results. The CCMA has been given responsibility through the labour Act amendment to mediate in resolving strikes.
- A comprehensive business incentive packages across sectors offer support to business.
- South Africa in Africa provides platform to leverage on the fastest growing region in the world.