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South Africa tends to react rather than to pre-empt local and international events and is therefore, most of the time, behind the curve.
We clearly struggle to keep up with what is happening around us and rarely capitalise and benefit from economic changes.
The domestic economy cannot be seen in isolation and is influenced by many factors. We do not operate in a vacuum and are part of the big wide world. We need to understand the entire picture.
Why are we always behind the curve?
With a nod to the proverbial seven deadly sins, South Africa also seems to be guilty of a number of transgressions.
These range in various degrees: ignorance, misconceptions, hubris, arrogance, greed, tolerance of crime, corruption and incompetence, despair, fatalism, disbelief and entitlement.
Entitlement is becoming an epidemic in South Africa and as much as we might not agree, no-one – including the world – owes anybody anything.
For instance, it is often claimed that salaries in South Africa are very low, and that people are entitled to higher remuneration. This is not necessarily true.
Average monthly incomes in South Africa are in fact higher than those of Portugal, Greece, Brazil, China, Russia, Thailand and India, with Cuba at the bottom.
This means that salaries in South Africa are not as low as some might think.
The problem is, however, that labour productivity has remained stagnant since 2010, while wage increases have averaged more than 5% over the same time.
At this rate the cost of labour doubles every decade.
This indicates that the country’s competiveness has been eroded over the last few years, instilling a sentiment that workers are left behind.
Also, much is being said about South Africa being the most unequal country in the world.
This usually centres on what a CEO earns relative to the lowest paid worker in a company. However, a major cause of income inequality in South Africa is the gap between modest income earners and zero-income earners.
We need to recognise the fact that labour is not the only production factor that can be used to generate output. Producers will only use labour if it is the best way to enhance the ‘bottom line.’
Doing business in South Africa
While inefficient government bureaucracy, restrictive labour regulations and an inadequately educated workforce were seen until recently as the most problematic factors for doing business in the country, over the last year corruption, crime and theft and government instability have moved to the top of the list.
It is incomprehensible that we in South Africa seemingly tolerate – even condone – crime, corruption, and incompetence.
So, how do we get ahead of the curve?
By understanding who and what we are and importantly acknowledging our ‘sins’ as mentioned.
To understand that there are lots of opportunities, but at the same time to realise that there are risks involved.
Focus on the positives, but also dare to fail. We in South Africa tend to frown upon failure, but should rather encourage a ‘try again’ culture.
Accept that sometimes things have to get worse before they get better and that most overnight successes take about 20 years.
Our biggest enemy is cynicism and apathy, which could lead to stagnation.
South Africa is not the first, nor the last country faced with the challenge of needing to embark upon a 20-year-long 5% growth path.
Many others have succeeded by ‘getting the basics’ right, and also recognising the fact that there is no quick fix.
Long-term strategies need to be formulated, and adhered to. And part of the success is predicated upon a thorough comprehension of global, regional and domestic realities, and their implications.
This then serves as a basis for anticipating the appropriate direction of a robust restructuring of societal thinking and economic behaviour.
Prof André Roux is head of the academic programmes in Futures Studies and principal lecturer in Economics at the University of Stellenbosch Business School.
