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Last week trade, industry & competition minister Ibrahim Patel presented the department’s budget vote in parliament. The main thrust of his speech concerned achieving sustained economic resiliency against the vicissitudes the global, and particularly domestic, economy has been facing over the past two years.

The two years of Covid-adjusted lockdowns, the 2021 July unrest targeting the economy and its infrastructure, the war in Eastern Europe, and the recent floods, have weighed heavily on an already beleaguered economy that was showing signs of recovery.

Last year the SA economy began to recover from the first wave of Covid-19, growing at 4.9%, with manufacturing exports at their highest in at least a decade and the agriculture and auto-value chain experiencing its best export performance yet.

We are encouraged by the recent S&P Global upgraded outlook for SA from stable to positive, citing our improved external and fiscal trajectory and our reasonably large net external asset position, flexible currency and deep domestic capital markets.

The war in Ukraine has resulted in fuel price increases and rising costs of fertiliser, wheat and other foodstuffs. It is now by far the biggest drag on the domestic economy. We are confronted by weak growth, extreme fiscal pressures, deepening poverty and a real threat of food shortages.

There are fundamental lessons that we can take from the Covid-19 pandemic and the war in Ukraine in relation to our battered economy:

  • Economies and supply chains are vulnerable and building greater industrial resilience needs to be given prominence in policymaking.
  • Societies need a capable state that is responsive and able to marshal what is needed to address the fallout from shocks.
  • The absence of economic justice places the burdens of climate, social and geopolitical shocks on those in society who can least afford it.

If there is anything these phenomena have gifted us it is the debunking of the old ways of conducting commerce, which was necessary to survive the economic Armageddon. Our baptism by fire during both the Covid hard lockdowns across the world and because of the Russia-Ukraine conflict are the consequences disruptions to global supply chains have had for trade and economic growth.

Across the world policymakers are internalising these lessons and beginning to make deep changes in energy technologies, in supply chains and sourcing markets, and the development of innovation and industrial capacity.

Old certainties are dissolving and new challenges are emerging, but there are also new opportunities. The old model of globalisation — with its ruthless focus on just-in-time inventory, efficiency, convenience and low-cost production — is being scrutinised and found wanting in a number of areas.

From the US to Europe, Asia, Latin America and other parts of the African continent, policymakers, elected representatives, business leaders and the public at large are questioning whether the old model still makes sense, and whether it serves the greater good.

Businesses and governments are more aware now of the price of disrupted supply chains. Derisking and diversifying supply chains is becoming a business imperative for multinational corporations. Policymakers are talking about the regionalisation of supply chains to tackle geopolitical risk, as part of risk-proofing their sourcing locations.

The question is how South Africans will respond. As a loud democracy we can either choose to remain trapped in the debates about the suitability and desirability of this new path while the world marches ahead, or we can shift drastically and build consensus on such concrete things as growing the economy and its capacity to create jobs.

Our new thinking as government is to position SA as a base for the regionalisation of global supply chains. The government is addressing infrastructure challenges from road freight to rail and ports, to return it to the global standard of the past.

Despite our enormous potential SA remains a small economy in an uncertain and changing world. Our economic vulnerability stems mainly from overdependence on offshore sourcing for our economy, and the risks of relying on a few products — mainly commodities — to drive our growth. These  leave us as price-takers and with our economic performance overdependent on what happens in global commodity markets.

We risk losing out on the enormous opportunity the new wave of diversification and regionalisation can bring. But as small as we may be, with agility we can weather the shocks and turn challenges into opportunity for our own growth and development.

SA can play a more prominent role in this world of regionalised production hubs. But we can only do so if we step up our focus on improving the dynamism and capacity of our industrial economic base and create opportunities for firms in our market to grow. It is time to talk less and do more in the economy.

• Gina is deputy  trade, industry & competition minister.

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