What if SA does a Brazil?
There’s a real chance of a deep economic contraction coupled with a political crisis
If all the best efforts to save SA come to naught, what might the future look like? The Paternoster Group, an independent consultancy offering political economy analysis, has some ideas. In an Aramageddonesque report, "What if ... SA ‘does a Brazil’?", Richard Calland, Ian Farmer, Lawson Naidoo and Antony Altbeker offer possible scenarios for SA if we face an economic crisis of the Brazilian kind. Brazil, which as recently as 2013 was predicted by the International Monetary Fund (IMF) to grow at an average of more than 4% a year, has been downgraded to subinvestment grade by all three major ratings agencies over the past year and is experiencing negative economic growth. Brazil’s crisis combines a dramatic economic slowdown with a loss of fiscal credibility in the face of falling tax revenues, and a crisis in political leadership. In SA, the authors argue, the situation is not so different: economic growth has stagnated; fiscal conditions have tightened as falling tax revenues meet ...
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