With President Zuma’s State of the Nation address stating strongly that the time has come to tackle poverty, inequality and unemployment, and the recent downgrade of our outlook to “negative” by international rating agencies Standard & Poor and Fitch, it’s clear that South Africa’s economy is in need of a serious boost.
There has been significant disruption in our platinum mining industry recently, as underpaid workers demand better pay from the massive corporations profiting from the resources of South Africa. And a political party has gained prominence – and seats in parliament – by demanding economic freedom for the South African working class, through the nationalisation of key resources and sectors.
But where do we go from here? The answer is quite complex and will require the cooperation of not only individuals, but also countries coming together working hand in hand. It’s time for South Africa to seriously start addressing these issues and take action.
When one link in a chain breaks, then the entire interdependent and integrated world economy is threatened with failure. The effects can be devastating, as the world realized when financial markets in the US collapsed, sending ripples across the globe.
In his introduction at the Group of Twenty (also known as the G-20 or G20) outreach seminar, vice chancellor Mandla Makhanya, explained that the global economy was slowly backing away from that breach, but that there was still work to be done. He pointed out that global economic activity and the meltdown in 2008 had shown governments that what it meant to be a nation had also changed irrevocably.
Makhanya highlighted challenges facing nations – jobless growth and growing inequality – but added that there were people working to tackle these problems. The G20 group of nations, and its target of 2% growth, is the best hope to help reap the promise of better futures for all. "The G20 is capable of catalyzing a global turnaround. They are able to grapple with challenges at a global level and can put in place workable solutions," he added.
Opening Africa's borders to improve trade efficiency
The G20 seminar reported that cross-border trade has grown by 4% in 2014, to levels not seen before 2008. If that growth can be sustained, Africa can, trading with itself and the rest of the world, lift itself out of poverty.
"G20 policies on cross-border trade will affect inequality by lifting more people out of poverty. If governments can be convinced to take action to free up trade, especially across borders, it will have a ripple effect on development issues. By not stopping trucks at the border you improve the efficiency of the supply chain, create jobs along the chain and positively affect issues like food security as well."
The G20 believes the open markets will create opportunities for businesses in Japan to sell its TVs to customers in Europe, while a farmer in Kenya will be able to ship produce to America, without losing a third along inefficient supply routes, as easily as selling to Kenyans.
Dr Heather Smith, Australia's G20 Sherpa and keynote speaker at the event, said stability is at the core of what they are trying to achieve. "We accept that the financial crisis was created in developed economies but we are all connected. We need Africa to be part of the change because the poorest of the poor were the hardest hit" Smith concluded.
The world still faces global challenges, but as Africa has prospered members of the industrialised G20 nations have begun to look at the continent not as a charity case, but instead as the newest, most promising market, holding the potential to stabilize and rebuild the world's economy.
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