Why the establishment of Brics rating agency is a delusion
The subdued response to the ‘catastrophe’ of the ratings downgrades was simple: they simply confirmed what we already know to be true of SA
Some commentators call our recent downgrades a "catastrophe" or a "disaster". This is wrong, of course. The downgrades simply confirm the disaster that has been unfolding in SA, particularly during the Zuma years. We are not going to experience hardships now: we have been experiencing hardships for quite some time. This is the reason why the financial markets reacted surprisingly mildly to the downgrades — they were already suppressed. State finances were already in slow collapse, most of the parastatals were already wrecked, the economy was already at a standstill, unemployment and poverty were already at heart-breaking levels. The rating agencies simply told us what we already knew, and, yes, it will take many years to regain an investment rating. This is why those that argue for the establishment of another (BRICS) rating agency are delusional. It’s like hoping another scale will not show that you are fat; as if it were the scale that was responsible for your weight. It will take...
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