In 1977, RW Johnson, one of my favourite writers, predicted that there would be a South African regime change in the mid-Nineties. It was a helluva long neck to stick out but he was proven correct when the ANC took over.
He’s now predicting that South Africa is heading to a critical point in two years time, or a little thereafter.
He bases this on the state of gold sales, increasing debt and increasing trade deficit. Manufacturing has dropped by half, mining is being strangled and farmers are under threat. Our bonds will soon reach junk status and the only way out will be loans from the IMF.
If the ANC doesn’t take the loans, there will be chaos. If the ANC does take them, there will be conditions that will likely mean less spending on grants and government salaries which will produce its own chaos as SACP, COSATU and SACP/COSATU aligned ANC politicians with short-term vision fight tooth and nail to retain power.
Why is South Africa facing this difficult challenge? He believes that the IMF put it correctly when they said:
“They say, ‘There’s this extraordinary thing. We’ve never seen anything like this anywhere else in the world. We’ve seen this huge [global] financial crisis, the downward dip in the economy, and here [South Africa] correctly increased its expenditure, that was quite right, like you should have done, that was good, but what did you spend it on? You gave your civil servants a 40% [pay] rise. I mean, people who are already in employment, quite well paid, suddenly get this enormous bonanza? This was absolutely crazy. We’ve never seen any other government in the world ignore its unemployed to the extent that you have just done. That money should have gone on infrastructure, it would have created new jobs. It would have been good for the economy. Yet you gave it away to people who are already at work. What on earth did you think you were doing?”
It’s a fascinating read that i high recommend. The full, intense version is at www.politicsweb.co.za/news-and-analysis/south-africas-looming-crisis.
Buy RW Johnson’s book on Kindle, ‘How Long Will SA Survive?’ from Amazon. Read a critical review at ‘RW Johnson’s hard sell on SA’s ‘impending’ demise’.
Consider this a follow-on to the blogs i posted last week in which i asked if families should move to Knysna or, even, South Africa. Don’t be sentimental and hopeful just to be sentimental and hopeful. Tell me what you think and explain why on my Facebook.