South African experiences double dip or depressionary economy

south african rand currency

south african rand currency

“The major risk facing the sub-Saharan economies is that the world economy could experience a double dip or economic stagnation,” the study says.

Share International Magazine has been publishing on the first page, since 1988, this prediction: A worldwide stock market crash would occur, beginning in Japan. As we have seen, the bubble in Japan burst in 1990 when Nikkei 225 index hit a maximum of almost 40,000. It has since tumbled to 10,000 or so, and shows no signs of recouperating. This of course was not helped by the Asian financial crisis in 1997.

Since then, there was a sequence of further collapses, such as the one in Russia. Each time the US Federal Reserve (or the IMF to cash strapped countries; often with usury & conditions attached) had to come up with cash to prop up the ailing banking system. Now the Dow has crashed.

This time around, the Federal Reserve barely managed to arrest the collapse of the whole world banking system. Indeed, there does not seem to be much room left to manoeuvre. Alas, no one, let alone major media, pays much attention to any obscure magazine or economic pundit, or unknown economists with their so called eccentric ideas, no matter how uncanny its predictions may be.

Indeed, the South African economy, if it were to experience another recession (but everyone knows the world is in a depression), further human capital would flee the country. This is already a huge problem in a country of a majority of black people, but with labor legislation aimed at keeping jobs away from the traditional white ruling class. Is it any wonder so many graduates are moving away from this country?

South Africa has lost 25% of its graduates to the United States alone. Moreover, South Africans account for 9.7% of all international medical graduates practicing in Canada. Out of all the medical graduates produced by the University of Witwatersrand in the last 35 years, more than 45% (or 2,000 physicians), have left the country. South Africa’s Bureau of Statistics estimates that between 1 million and 1.6 million people in skilled, professional, and managerial occupations have emigrated since 1994 and that, for every emigrant, 10 unskilled people lose their jobs. — Human Capital Flight: Stratification,Globalization, and the Challenges to Tertiary Education in Africa; Benno J. Ndulu; JHEA/RESA Vol. 2, No. 1, 2004, pp. 57–91

SA’s economic recovery vulnerable to ‘double-dip’ threat

By: Terence Creamer 21st January 2010 EngineeringNews

The World Bank expects the South African economy, which slumped into its first recession in 17 years during 2009, leading to an estimated 1,8% contraction in gross domestic product (GDP), to grow by 2% during 2010 and 2,7% in 2011 – however, a ‘double-dip’ recession would severely undermine the pace and strength of the anticipated recovery.

The forecast is well below the country’s now abandoned aspiration for economic growth of more than 6% as from 2010, which was also seen as a necessary condition for curbing South Africa’s extremely high unemployment rate and growing levels of inequality.

Africa’s largest economy shed nearly one-million jobs during 2009, raising the official unemployment figure to 24,5% by the third quarter, while the broader definition of joblessness still comfortably exceeds the 30% level. And, on the inequality front, the country’s Gini coefficient of income inequality is, at 58, the worst in a peer group assembled by Standard & Poor’s, consisting of China, Hungary, Mexico, Poland, Russia and Thailand.

The World Bank’s growth forecasts for South Africa are more or less in line with the country’s own Medium Term Budget Policy Statement forecasts, released in October, which anticipates growth of 1,5% in 2010/11, followed by 2,7% in 2011/12 and 3,2% in 2012/13. Finance Minister Pravin Gordhan will update these forecasts on February 17, when he delivers his Budget address to Parliament.

In its ‘Global Economic Prospects 2010′ report, released on Thursday, the World Bank indicates that South Africa’s economic recovery, as will be the case across sub-Saharan Africa, will be fuelled by a recovery in private demand, exports, and investment, with the largest contribution expected to come from exports.

Therefore, the strength of the recovery will depend on the growth performance in key export markets, such as the US, the European Union, and China. The projected rebound in growth in these economies should improve demand for sub-Saharan African exports and should trigger a modest recovery in investment flows.

“However, growth in external demand is expected to wane in the second half of 2010, as the growth impact of the inventory restocking cycle and fiscal stimulus wanes,” the report notes, adding that the recovery in the region will, thus, remain “modest and fragile”.

Further, the region will be extremely vulnerable in the event that the global economy experiences a “double-dip” recession and/or economic stagnation.

“The major risk facing the sub-Saharan economies is that the world economy could experience a double dip or economic stagnation,” the study says.

This, in turn, would undermine the recovery in external demand for the sub-Saharan economies and would put pressure on commodity prices, constrain government revenues and possibly push debt to unsustainable levels. Governments may then be forced to implement procyclical fiscal cuts, increase taxation, or both, with adverse implications for poverty, health, education, and long-term growth prospects, the bank states.

Estulin: After G20, Oligarchs Moving on African Union, Population Reduction

James Corbett
The Corbett Report
November 11, 2009
featured stories Estulin: After G20, Oligarchs Moving on African Union, Population Reduction
featured stories Estulin: After G20, Oligarchs Moving on African Union, Population Reduction

In an exclusive interview (mp3) with The Corbett Report earlier today, Daniel Estulin revealed the behind-the-scenes details of last week’s G20 Finance Minister’s meeting in St. Andrews, Scotland. Many of these details come from actual G20 documents that his sources were able to sneak out of the meetings in spite of security measures which, Estulin notes, were unprecedented “even by Bilderberg standards.” These documents, which contain valuable information about the conference, are available at and have been mirrored on The Corbett Report homepage. They were smuggled out at great personal risk and need to be disseminated widely.

Leave a Reply

Your email address will not be published. Required fields are marked *