Fundamentally, without the right sets of policy measures to reset the economy, South Africa could simply create a big increase in public debt with a limited domestic surplus.
The Covid-19 crisis might be a distraction, but it would be a dangerous illusion to assume that it sweeps away the serious problems that existed prior to the pandemic. What is needed is a strategy that faces South Africa’s problems head on and takes the country out of the low-growth, high-unemployment, high-crime, socially discordant dystopia that existed prior to Covid-19.
Yet crises, as Asia has routinely shown in its development path, can with single-minded leadership become the catalysts for much-needed reform.
Such a plan will have to include more than short-term mitigation focused on the extension of child support, food parcels or SMME bailouts – important though it is to confront the hunger and desperation that results from the lockdown.If resources ploughed into various non-essential services are not to be wasted, the plan must map out where and how deep, structural reform should take place to ensure the South African economy not only recovers, but is able to prosper.
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Written by Ray Hartley, Emily van der Merwe, Marie-Noelle Nwokolo and Dr Greg MillsDOWNLOAD PAPER