I was recently asked: “What is wrong with the SA economy? Why can’t it grow like other emerging markets?” The emphasis of the question was on the concept of “wrong”.

In answering this question bluntly, I will probably upset friends and colleagues. Labour unions will not like my argument. Most captains of industry will hate it. The establishment will call for my head. Government, especially treasury and the Reserve Bank, will reject my logic point-blank. And the economics profession, of which I am a part, will probably dismiss my analysis out of hand. Indeed, the only SA interest groups I will not offend are the tragically large pool of unemployed and the exporters.

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