SA must 'dump US, choose China'

Cape Town - The current global financial crisis has presented SA with an opportunity to dump Western-inspired economic policies that have proven to be disastrous, a leading business strategist said on Monday.

Speaking at a Cape Town Press Club function in the city, Investec Asset Management strategist Michael Power said the crisis was a warning that the United States' economic model, heavily dependent on borrowing, would no longer be an option for SA.

"We need to start questioning ourselves whether we are following the right model," he said.

SA's economic policies such as inflation targeting would have to be revisited if the country were to become a stronger global economic player.

"I do not think it is a good policy for an emerging country with 25% unemployment," he said.

With a current account surplus of $300bn and household income savings of around 45%, Power said China was the best module from which South Africa should learn.

China would emerge as the strongest economy in the aftermath of the current financial turmoil.

"We are going to see a massive shift in the shape of the global economy over the next decade.

"We are going to see Asia move much more central into the global economy and they are going to become much more influential in determining what happens in the global economy," he said.

Power, who has held various high profile positions, including as Head of Africa and the Middle East for Baring Asset Management in London, said the South African economy would not be affected by the current financial turmoil in the same manner as those of Western countries.

- Sapa