James Carville, former adviser to US president Bill Clinton, once said that were he to be reincarnated, he would choose to return as the bond market; he could then intimidate anyone. This is an overstatement of reality, but it highlights the extent to which we live in a highly competitive world and that countries need to make tough choices. SA has now had time to digest the real and potential economic implications of the recent cabinet reshuffle — in which Pravin Gordhan was replaced by Malusi Gigaba as finance minister — and the subsequent credit rating downgrades to junk status by S&P Global Ratings and Fitch. These have been key political decisions with economic consequences. As these political developments were not entirely unexpected and had been partially priced in by the markets, optimists rejoiced that, although these political developments were unwelcome, the market and currency reactions were relatively muted. And many were pleased that the economy, although jolted by the ...

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