Johannesburg - Expect South Africa, Saudi Arabia, Brazil and Russia to have to make hard choices if commodity prices stay at current levels or go lower, warned Mike Schüssler, chief economist of economists.co.za, in a report for TreasuryOne.
All commodity producers will now have to get reforms back on track as swelling budget deficits will come into play, in his view.
"Commodities are a gift that does not keep on giving and this could be the best lesson for most commodity producers to learn," said Schüssler.
"A crisis always brings a renewal and that is where many commodity producers will have to face their fears. These fears will lead to a better world with more productivity and probably a more educated population."
In his view Africa could see the high growth of the last decade slowing a bit due to the end of the commodity super cycle shifting the balance of growth from the commodity economies such as South Africa, Brazil and Russia.
Therefore, commodity countries like South Africa might have to find better uses for their commodities to make sure these commodities have a way back in the next super cycle.
They can, for instance, cut back production, but, according to Schüssler, that would have employment effects and SA cannot afford to lose any more private sector jobs.
"Commodity producers might have to think that it may be 30 years before the next super cycle upswing and before then the lows will have to come," said Schüssler.
"I believe, but certainly cannot prove this, that the actual lows may take years to come and we could have two or three decades of ever lower low prices for many commodities. That means the big picture changes are going to take a long time in coming too."
The most expensive producers normally get hit hardest and here the labour intensive gold and platinum producers in SA will feel the effects the most.
"The seeds of renewal will grow as growth continues to increase in commodity using countries and they let consumption saving innovation go," said Schüssler.
"But as this super-cycle was about two and a half years longer at nearly 15 years, for some commodities it is likely that much consumption saving technology has yet to come to the market. So, a protracted low price environment may be on the horizon."