The underrated SA economy

Source: The SA good News, 08/07/2015

We hear that supply side constraints like electricity & labour strikes
hobble the economy, that regulatory interventions in mining &
agriculture create uncertainty and hold back these sectors, that
business & consumer confidence generally is depressed and holds back
risk taking, fixed investment, replacement of durable goods and job
creation.
These are terrible things, with the economy only growing by 1.5% last
year and possibly not much more this year. But is it the full story?
Is there possibly another story behind these many stories that one
needs to understand, too, so that this 1.5% growth story may be
understood in context?
After all, unlike Russia or Brazil, our GDP isn't actually dropping by
2%-3% annually? Unlike Greece, it hasn't dropped by 25% these past six
years? Unlike Syria`s economy, it hasn't ceased to exist? Unlike Zim,
it hasn't been Dollarised?
We actually continue to have an economy, employing at least 9 million
people full time at large registered business or other organisation
employers. And overall, StatsSA reports at least nearly 16 million
people economically active (according to the Quarterly Labour Force
Survey based on household surveys).
All these people aren't imagined. In the popular parlance, they are
`engaged` economically, populating offices & high ways, beavering
away, paying tax, stamping documents & generally making themselves useful.
Or so they think.
So how is one to see 1.5% growth annually without distorting the prism?
One way of doing so, getting popularized of late, is to imagine. For
imagine we didn't have an Eskom electricity constraint, that we still
had the surplus buffer capacity, that power stations didn't crumble
unexpectedly, that we didn't labour under this embarrassing reality of
having to ration available electricity through load shedding. Denying
some people their electricity who as a consequence could not produce,
and consequently became statistically idle for that moment?
Some people have applied their minds to these things, and it has been
reported that the economy would have grown 1.2% faster if `normality`
in electricity had prevailed last year. Imagine, not doing 1.5% but 2.7%?
But if that is the case, the analysis can perhaps be extended? Imagine
we didn't have an AMCU mining union causing havoc last year in
platinum? Or Num & AMCU brotherly doing so together this year in gold
mining? Or Numsa last year in manufacturing & the motor trade.
Or…..you get the drift? What would the GDP growth rate then have been
like?
At a pinch, I would say these worthies knocked 0.5% off GDP last year.
In other words, in their absence, imagined, faster mining,
manufacturing & motor trade activity growth would have made possible
an overall GDP growth rate 0.5% faster than realized. When added to
the idled electricity saga, it suggests GDP could have done 3.2%.
Nearly as fast as in the good old days.
It gets better still. If we didn't have the Ministers of Mining, Land
Affairs and Agriculture that we have, but had Ministers who actually
tried to inspire deep confidence among our primary producers, by
having greater certainty of tenure in their imagined property rights,
wouldn`t we have had more productive investment in these sectors? If
so, how much would that have added to our imagined GDP design speed?
Another 0.5%? Could we have done 3.7% instead?
And going around the public sector generally, as much local government
dispersed over many municipal locations, as provincial governments and
great Departments of State where millions are known to toil daily. If
they had spent their allocated capex budgets, or merely paid their
private suppliers on time (say once a month, the last day of the month
would have been dandy, every month, though), or paid their municipal
accounts, or their Eskom accounts, so that the outstanding amounts
wouldn`t be so horrific (R100bn to municipalities, R20bn to Eskom, you
couldn't invent it even if having enough imagination?), the economy
would surely be in better nick?
For imagine the reduced stress & strain at so many small suppliers,
and big ones, every day, week, month. Having to pay SARS, having to
pay employees, but not getting paid outstanding bills, living hand to
mouth to foot? It must be terrible, a severe strain on the central
nervous system, creating irritableness, road rage even, martial
breakdown, responsible for children being unhappy & doing poorly in
school, becoming dropouts, and adding to the long-term unemployment
problem (or worse, joining a political party like some we all know &
clamouring for their own opportunity to join the gravy train).
Think about it. That must be worth another 1.5% on GDP growth annually
if not labouring under such constraints. That would have got us to
5.2% GDP growth last year, in fact even outperforming the National
Development Growth target, without having to make it up, as we now do
daily?
Imagine? What we would look like at 5.2% GDP growth annually. But
perhaps far more importantly, lift the veil and look beneath it.
Beneath these few constraints. What do you see?
A beavering economy. Steadily stamping documents, busily engaged,
going places. All 15.8 million of them, daily, most of them fully
occupied, too many only a few hours here & there, but then a teacher
can't always be at her post? There are political meetings to address,
shopping to be done, girlfriends to be visited.
The social calendar tends to be a full one even if the workweek isn't.
This shouldn't be begrudged. The males call it golf. And it is better
to be at the golf course worrying about the office, than be at the
office worrying about the golf.
It is true. Think away the inconvenience of load shedding, a few
inconvenient Ministers causing personal havoc, the odd Union keeping
output from being achieved, and we get a much better picture what the
rest of the 15.8 million are up to daily. They are at work, beavering
& motoring & rubber stamping, as they have for years.

Many may be depressed, going by anti-depressant sales. But for that
you have medication. It doesn't hold back the economy that they fill
in confidence survey forms poorly, or make overseas investments.
Instead, they all report for duty, daily, more or less sober & awake,
& beaver & motor & rubber stamp.
So wake up, smell the roses, aside of a few rotten apples, be they
Ministerial or power station maintenance people or accounts people not
paying bills or unions missing in action, the rest of us are beavering
at a steady clip, the same steady clip we have maintained for years,
decades even.
For where the #¥@$ do you think that 1.5% growth rate came from last
year? Someone was at his post. All 15.8 million of them, more or less,
sober or not.
They are there this year as well. And will be there next year, too.
Count on it. We have a happy ship, despite the anti-depressant
popping. Pass the word.

08 July 2015 – The SA good News
We hear that supply side constraints like electricity & labour strikes
hobble the economy, that regulatory interventions in mining &
agriculture create uncertainty and hold back these sectors, that
business & consumer confidence generally is depressed and holds back
risk taking, fixed investment, replacement of durable goods and job
creation.
These are terrible things, with the economy only growing by 1.5% last
year and possibly not much more this year. But is it the full story?
Is there possibly another story behind these many stories that one
needs to understand, too, so that this 1.5% growth story may be
understood in context?
After all, unlike Russia or Brazil, our GDP isn't actually dropping by
2%-3% annually? Unlike Greece, it hasn't dropped by 25% these past six
years? Unlike Syria`s economy, it hasn't ceased to exist? Unlike Zim,
it hasn't been Dollarised?
We actually continue to have an economy, employing at least 9 million
people full time at large registered business or other organisation
employers. And overall, StatsSA reports at least nearly 16 million
people economically active (according to the Quarterly Labour Force
Survey based on household surveys).
All these people aren't imagined. In the popular parlance, they are
`engaged` economically, populating offices & high ways, beavering
away, paying tax, stamping documents & generally making themselves useful.
Or so they think.
So how is one to see 1.5% growth annually without distorting the prism?
One way of doing so, getting popularized of late, is to imagine. For
imagine we didn't have an Eskom electricity constraint, that we still
had the surplus buffer capacity, that power stations didn't crumble
unexpectedly, that we didn't labour under this embarrassing reality of
having to ration available electricity through load shedding. Denying
some people their electricity who as a consequence could not produce,
and consequently became statistically idle for that moment?
Some people have applied their minds to these things, and it has been
reported that the economy would have grown 1.2% faster if `normality`
in electricity had prevailed last year. Imagine, not doing 1.5% but 2.7%?
But if that is the case, the analysis can perhaps be extended? Imagine
we didn't have an AMCU mining union causing havoc last year in
platinum? Or Num & AMCU brotherly doing so together this year in gold
mining? Or Numsa last year in manufacturing & the motor trade.
Or…..you get the drift? What would the GDP growth rate then have been
like?
At a pinch, I would say these worthies knocked 0.5% off GDP last year.
In other words, in their absence, imagined, faster mining,
manufacturing & motor trade activity growth would have made possible
an overall GDP growth rate 0.5% faster than realized. When added to
the idled electricity saga, it suggests GDP could have done 3.2%.
Nearly as fast as in the good old days.
It gets better still. If we didn't have the Ministers of Mining, Land
Affairs and Agriculture that we have, but had Ministers who actually
tried to inspire deep confidence among our primary producers, by
having greater certainty of tenure in their imagined property rights,
wouldn`t we have had more productive investment in these sectors? If
so, how much would that have added to our imagined GDP design speed?
Another 0.5%? Could we have done 3.7% instead?
And going around the public sector generally, as much local government
dispersed over many municipal locations, as provincial governments and
great Departments of State where millions are known to toil daily. If
they had spent their allocated capex budgets, or merely paid their
private suppliers on time (say once a month, the last day of the month
would have been dandy, every month, though), or paid their municipal
accounts, or their Eskom accounts, so that the outstanding amounts
wouldn`t be so horrific (R100bn to municipalities, R20bn to Eskom, you
couldn't invent it even if having enough imagination?), the economy
would surely be in better nick?
For imagine the reduced stress & strain at so many small suppliers,
and big ones, every day, week, month. Having to pay SARS, having to
pay employees, but not getting paid outstanding bills, living hand to
mouth to foot? It must be terrible, a severe strain on the central
nervous system, creating irritableness, road rage even, martial
breakdown, responsible for children being unhappy & doing poorly in
school, becoming dropouts, and adding to the long-term unemployment
problem (or worse, joining a political party like some we all know &
clamouring for their own opportunity to join the gravy train).
Think about it. That must be worth another 1.5% on GDP growth annually
if not labouring under such constraints. That would have got us to
5.2% GDP growth last year, in fact even outperforming the National
Development Growth target, without having to make it up, as we now do
daily?
Imagine? What we would look like at 5.2% GDP growth annually. But
perhaps far more importantly, lift the veil and look beneath it.
Beneath these few constraints. What do you see?
A beavering economy. Steadily stamping documents, busily engaged,
going places. All 15.8 million of them, daily, most of them fully
occupied, too many only a few hours here & there, but then a teacher
can't always be at her post? There are political meetings to address,
shopping to be done, girlfriends to be visited.
The social calendar tends to be a full one even if the workweek isn't.
This shouldn't be begrudged. The males call it golf. And it is better
to be at the golf course worrying about the office, than be at the
office worrying about the golf.
It is true. Think away the inconvenience of load shedding, a few
inconvenient Ministers causing personal havoc, the odd Union keeping
output from being achieved, and we get a much better picture what the
rest of the 15.8 million are up to daily. They are at work, beavering
& motoring & rubber stamping, as they have for years.

Many may be depressed, going by anti-depressant sales. But for that
you have medication. It doesn't hold back the economy that they fill
in confidence survey forms poorly, or make overseas investments.
Instead, they all report for duty, daily, more or less sober & awake,
& beaver & motor & rubber stamp.
So wake up, smell the roses, aside of a few rotten apples, be they
Ministerial or power station maintenance people or accounts people not
paying bills or unions missing in action, the rest of us are beavering
at a steady clip, the same steady clip we have maintained for years,
decades even.
For where the #¥@$ do you think that 1.5% growth rate came from last
year? Someone was at his post. All 15.8 million of them, more or less,
sober or not.
They are there this year as well. And will be there next year, too.
Count on it. We have a happy ship, despite the anti-depressant
popping. Pass the word.