WATCH: SA is an ‘expensive Asia’

SA’s unemployment rate surged to the highest on a global list of 82 countries monitored by Bloomberg recently. It has been said that insanity is  doing the same thing over and over again and expecting different results. Since 1994, macroeconomically, SA has pursued variations on the same theme of neoliberal economic reform.

They have not worked: unemployment has doubled from 20% to more than 40%. It is therefore time for some fresh thinking — indeed radical thinking — regarding the economic challenges facing SA.

We should be under absolutely no illusion as to the seriousness of our unemployment problem. In the Great Depression of the 1930s, US unemployment peaked at 25%, while the UK’s peaked at 15%. This previously unprecedented failure of their labour markets prompted John Maynard Keynes to tear up and rewrite the standard economics text book.

Albeit exacerbated by the pandemic, SA’s unemployment is now more than 40%; its youth unemployment has topped 70%. Surely it is, following the logic, time to try something different?

Joining Michael Avery to discuss this is Investec strategist Michael Power, who wrote a four-part essay recently taking a deep dive into the depths of the SA economy debate.