Economic Thoughts: An Interesting Year

It was an interesting year. Many also say it was a horrible year, and it certainly was for some, indeed momentous in some respects. But the JSE didn’t lose 80% of its value as in 1969, we didn’t have massacres like Sharpeville 1960, Soweto 1976, Bisho or Boipatong 1992 or Marikana 2012, we didn’t do recession like 2008, 1998, 1984 or 1976, we didn’t do strikes like platinum 2014 or public sector 2011, we didn’t do debt default standstills like 1985. Indeed, there were lots of things we didn’t do, which would have made this year truly horrible if they had.

 

Instead, we had a chuckling president steadily losing the plot (not edifying, but also not Shakespearean), we had much parliamentary slapstick with its darker but also lighter moments (those hats, those overalls, those…), there were banana peels (Nene’s firing, parliamentary manhandling reminding of Eastern Europe). We had the power of social media suddenly unleashed on us via the hashtag revolution, starting with Rhodes, and with that effort successful, redirecting its fury on other irritants, such as university fees, language policies and Zuma. And of course the Rand lost another 40%, but that protected a lot of mining and industry on the brink of extinction and also boosted not a few farmers. And the foreign rating agencies got antsy (they would, with so many banana peels flying).

 

Yes, most horribly, we are having drought and its deadening grip is everywhere. But that is a story mainly for 2016 if it deepens. As are a few other things, such as the still unfolding commodity price implosion (thankfully including oil shielding us part of the way), the Fed taking off (but it will likely go very wobbly for them), China and Europe grappling with internal challenges and the Middle East edging ever closer to a yet bigger imbroglio.

 

Certainly, our political story in 2016 is going to get more lively and interesting as the Zuma presidency cuts its teeth on local elections, the SA hashtag revolution breeds ever wilder offspring, and the long presidential succession becomes ever more like 7de Laan (an epic soapie…) on its way to resolution.

 

Time, gentlemen, time, drink up & be gone!

 

Meanwhile the economy is in a holding pattern, held up by bubblegum liberally supplied by many of us simply doing our daily work in spite of the daily slapstick playing out above the clouds, proof positive if any be needed of our still superior well-made institutions surviving the developmental BRIC-imitated onslaught (as Labourite Dennis Healey supposedly said of Tory Geoffrey Howe in debate many decades ago, it like “being savaged by a toothless sheep”).

 

The clashing paradigms and resulting policy paralysis will keep business confidence morose, though, and Boards more inclined to further bolster ventures abroad, diversifying the business, hedging the balance sheet, tying down loose deck cargo as we traverse these final costly years of the Zuma presidency towards a better next decade, as much globally as locally.