A section of South African society will forever be marginalised, Standard Bank chief economist Goolam Ballim says.

“There is a fair section of South African society that will forever be outside of the formal employment system, simply because they do not have sufficient capabilities to participate in the economy,” he said.

Ballim said this sector would be forever excluded because their intellectual capabilities were crippled during the apartheid era.

“If you have been exposed to an education system that did not render you able to participate in a modern economy — which requires fairly sophisticated skills — the chances are you will not be able to get access to, let alone the opportunity of, decent pay, or a job that can satisfy middle-class aspirations,” he said.

This was why government had to provide social grants, in order to mitigate the legacy of the apartheid era.

Ballim was speaking at a briefing to highlight global economic problems and their impact on the South African economy.

He said the European economy would experience weak growth for a long time.

“Over the next 20 to 30 years, Europe is going to see a roughly 14% shrinkage in its workforce,” he said.

At the same time, the proportion of youths not yet working would rise.

Poor economic performance in Europe and the United States would impede global economic growth, Ballim said.

In the past decade, China had been able to achieve double digit growth, but it would be hard for the Asian economic giant to reach its targeted 8% growth in current global economic conditions.

“China has grown to become the world’s second-largest economy. It has a role to play, even though it was not the cause... of the crisis. It has a role to play in providing mitigating measures that impact the rest of the world.” 

China had grown to be South Africa’s largest trading partner over the past decade, surpassing Europe and the US. It accounted for 12.5% of South African exports.

Commodities made up two-thirds of South African exports, and China was the largest importer of local commodities.

Ballim said China’s relations with South Africa extended far beyond the commodities it bought from South Africa.

“If China grew at six percent, it would encourage a recession in the commodities markets,” he warned.

He said weak growth in China, Europe and the US — which made up two-thirds of global GDP — would translate into slower growth in the global economy.

South Africa had performed better than other emerging economies before the financial crisis. But this had changed, and the country was now lagging behind other emerging markets.

Ballim said household spending in South Africa had slowed down and would “reinforce its slowing momentum”.

Household spending had grown by 6% to 7% a year before the crisis, but had not picked up during the economic recovery to stimulate further growth in South Africa.

On fixed investment, which accounted for 20% of GDP, Ballim said the country had recently depended on parastatals.

Two-thirds of investment which emanated from the private sector was static.

On the recent Marikana mine shooting in North West, Ballim said: “The events in Marikana must stand as a scar on the conscience of every single South African”.

Comments

• Sign in or sign up to comment

Wed May 22 14:50:01 SAST 2013 ::

Aug 29, 2012

RobinH

Not to mention the utter chaos in education, communities burning down schools, unscrupulous suppliers and officials that have denied the children books. Is this all the fault of Apartheid, Mr Ballim? Get real, man.
Report Abuse

Aug 29, 2012

African-guy

What Mr. Ballim said is true. There are those people that were educated during the apartheid days that will never be taken out of poverty because they don't have the skills required by the economy, hence they will forever be dependent on state assistance. The ANC government is continuing to produce unskilled people like in the past by denying them a proper education.
Report Abuse

Aug 29, 2012

skwamasamabele

Ballim's analysis is true, especially about apartheid and European economy. I've lived in Britain since 1994 and the Recession over here is unbearable. I was retrenched when the Conservatives came to power and I have been unemployed ever since. I got apartheid education but since had been able to go to a London University and Gained a BSc in Geography. However, i have been unable to locate employment, and cant come home because I have 3 young children.
Now, the solution in SA would be to introduce National Service, not in military sense, but work experience for all 11 to 18 year olds. Introduce Apprenticeships schemes for most 18 to 25 year olds. Introduce volunteering for most unemployed in civil service and amenities, all this financed by the govt.
Most university and college students should get into an Accreditation Scheme, where studying is run parallel with on-the-job initiative (also working as part of their Assessment). If the govt wont grit their teeth and pay for this programme (for at leats 5 years), our economy is going to grind to a halt
Report Abuse

Read all 3 comments