Wfs Conference Andre Roux
-
Upload
michael-lee -
Category
Business
-
view
868 -
download
1
description
Transcript of Wfs Conference Andre Roux
1
WFS 6 May 2010 South Africa‟s economy: 20 years down the road
André Roux
Institute for Futures Research
University of Stellenbosch
©U
S/A
Ro
ux
20
10
Issue/concern
Social
Resources
Technology
Politics/ Institutional
Economics
World Africa
Nation
©U
S/A
Ro
ux
20
10
World population, GDP, GDP per capita: 1000-2001
0
5000
10000
15000
20000
25000
30000
35000
40000
0
1000
2000
3000
4000
5000
6000
7000
1000 1500 1820 1870 1913 1950 1973 2001
Population (m)
GDP (1990 $bn)
GDP per capita (1990$)
Compiled from Maddison (various)
©U
S/A
Ro
ux
20
10
2
World population, GDP per capita: 1950-2001
0
1000
2000
3000
4000
5000
6000
7000
1950 1973 2001
Population (m)
GDP per capita (1990$)
Compiled from Maddison (various)
©U
S/A
Ro
ux
20
10
Poverty in LDRs <$1.25 per day
1990 (m) 2005 (m) Change
1990-2005 (m)
Change 1990-2005
(%)
East Asia & Pacific
873 316 -557 -63
Europe & Central Asia
9 17 +8 +88
Latin America & Caribbean
50 45 -5 -10
MENA 10 11 +1 +10
South Asia 579 596 +17 +3
SSA 298 388 +90 +30
Total - % of world population
1 819 35
1 374 21
-445 -24
World Bank ©U
S/A
Ro
ux
20
10
Poverty in LDRs (% of total regional population)
0
5
10
15
20
25
30
35
40
45
50
55
60
65
E Asia &Pacific
Europe&
CentralAsia
LatinAm &Car
MENA S Asia SSA TotalLDR
1990
2005
World Bank
©U
S/A
Ro
ux
20
10
3
% change in population, GDP per capita and poverty, 1990-2005
25
32
-24
-30
-20
-10
0
10
20
30
40
Change in population Change in GDP percapita
Change in poverty
Own compilation
©U
S/A
Ro
ux
20
10
• At a global, aggregate level, the post-Cold War era of capitalism and globalism seems to have yielded significant dividends
• But maybe the figures conceal more than they reveal….
©U
S/A
Ro
ux
20
10
Global economic output, 2007
% of total world economy
% of total world
population
GNI per capita (US$)
Low income 3.0 19.6 1 489
Middle income 39.0 64.4 6 027
High income 58.0 16.0 36 340
G20 90.5 66.8 n/a
SSA 2.3 12.1 1 869
World Bank, 2009 ©U
S/A
Ro
ux
20
10
4
Poverty in LDRs <$1.25 per day
1990 (m)
2005 (m)
Change 1990-2005 (m)
Change 1990-2005 (%)
Total 1 819 1 374 -445 -24
Total ex China
1 136 1 166 +30 +2.6
World Bank ©U
S/A
Ro
ux
20
10
… an ageing population
0
5
10
15
20
25
30
35
40
19
50
19
60
19
70
19
80
19
90
20
00
20
10
20
20
20
30
20
40
20
50
Pe
rce
nta
ge
% aged 0-14 % aged 65+
UN ©U
S/A
Ro
ux
20
10
… together with urbanising masses
0
10
20
30
40
50
60
70
80
90
100
Wo
rld
MD
R
LD
R
Afr
ica
As
ia
Eu
rop
e
L A
me
ric
a
N
Am
eri
ca
Oc
ea
nia
Pe
rce
nta
ge
urb
an
1950 2010 2050
UN
©U
S/A
Ro
ux
20
10
5
… and a new rapidly growing middle-income group
Number of middle-income
consumers in China and India
= entire population of N America and W
Europe added together
= 600m
©U
S/A
Ro
ux
20
10
…. creates the challenge of surviving
prosperity
©U
S/A
Ro
ux
20
10
The challenge of surviving prosperity
©U
S/A
Ro
ux
20
10
6
The Happy Planet Index (HPI)
• Measures the degree to which long and happy lives (life satisfaction and life expectancy are multiplied to calculate happy life years) are achieved per unit of environmental impact.
• HPI ~ Happy life years
Ecological footprint
• Life satisfaction: All things considered, how satisfied are you with your life as a whole these days? (0-10)
Life satisfaction scores tend to be higher where people enjoy higher
levels of social capital, better climate, richer natural resources,
higher life expectancy, better standards of living, and more
voice within government
nef, 2009 ©U
S/A
Ro
ux
20
10
HPI for selected countries
Rank Country Life expectancy
Life satisfaction
Ecological footprint
HPI
1 Costa Rica 78.5 8.5 2.3 76.1
2 Dominican Rep 71.5 7.6 1.5 71.8
3 Jamaica 72.2 6.7 1.1 70.1
4 Guatemala 69.7 7.4 1.5 68.4
5 Vietnam 73.7 6.5 1.3 66.5
6 Colombia 72.3 7.3 1.8 66.1
7 Cuba 77.7 6.7 1.8 65.7
8 El Salvador 71.3 6.7 1.6 61.5
9 Brazil 71.7 7.6 2.4 61.0
10 Honduras 69.4 7.0 1.8 61.0
nef, 2009 ©U
S/A
Ro
ux
20
10
HPI for selected countries
Rank Country Life expectancy
Life satisfaction
Ecological footprint
HPI
12 Egypt 70.7 6.7 1.7 60.3
20 China 72.5 6.7 2.1 57.1
59 Finland 78.9 8.0 5.2 47.2
74 UK 79.0 7.4 5.3 43.3
75 Japan 82.3 6.8 4.9 43.3
114 USA 77.9 7.9 9.4 30.7
115 Nigeria 46.5 4.8 1.3 30.3
118 South Africa 50.8 5.0 2.1 29.7
128 Kuwait 77.3 6.7 8.9 27.0
130 Angola 41.7 4.3 0.9 26.8
nef, 2009 ©U
S/A
Ro
ux
20
10
7
Uncomfortable trade-offs
Aim 2050
Country A
Country B
Country C
Country D
Country E
Life expectancy
87 78 48 73 51 51
Life satisfaction
8.0 7.9 4.7 6.7 5 2.4
Ecological footprint
1.7 9.4 3.6 2.1 2.1 1.1
HPI 89 31 21 57 30 18
Policy??
SA China Botswana USA Tanzania
NEF, 2009 ©U
S/A
Ro
ux
20
10
Let‟s today step out of the normal boundaries of analysis of our economic crisis and ask a radical question: What if the crisis of 2008 represents
something much more fundamental than a deep recession?
What if it‟s telling us that the whole growth model we created over the last 50 years is
simply unsustainable economically and ecologically and that 2008 was when we
hit the wall – when Mother Nature and the market both said: „No more‟?
Thomas Friedman
©U
S/A
Ro
ux
20
10
The challenge of surviving prosperity
Is he right?
Was the Great Recession a blessing in disguise?
Will we be willing to
sacrifice growth in favour of sustainability?
0
10
20
30
40
50
60
70
80
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Environment
Economic growth
When growth is compromised …..
With which statement do you most agree:
“Protection of the environment should be given priority even at the risk of curbing economic growth”, or
“Economic growth has priority even if the environment suffers to some extent”?
Economist, 2010 ©U
S/A
Ro
ux
20
10
8
Africa
Finite natural resources
+
Ageing workforces
=
Restoration of Africa‟s strategic
importance
©U
S/A
Ro
ux
20
10
9
24
24
32
33
33.5
35
38
45
45
0 5 10 15 20 25 30 35 40 45 50
Crude oil
Nickel
Copper
Aluminium
Zinc
Lead
Raw steel
Coal
Iron ore
Tin
China‟s share of global demand for various minerals
Baxter, 2009 ©U
S/A
Ro
ux
20
10
-2
-1
0
1
2
3
4
5
6
1980-89 1990-99 2000-07
GDP GDP per capita
World Bank
%
Real commodity prices
SSA economic growth
©U
S/A
Ro
ux
20
10
9
Region Proved reserves
Production Consumption
N America 5.6 15.8 27.4
South & Central America
9.8 8.5 6.9
Europe/ Eurasia
11.3 21.7 24.3
Middle East 59.9 31.9 7.8
Africa 10.0 12.4 3.4
Asia/ Pacific 3.3 9.7 30.1
Total 100 100 100
OPEC 76.0 44.8 n/a
Oil reserves, production and consumption as a percentage of the world total, 2008
BP, 2009 ©U
S/A
Ro
ux
20
10
Age structure of populations
0
100
200
300
400
500
600
mill
ion
s
0-14 15-64 65+
0
200
400
600
800
1000
1200
14000-14 15-64 65+
©U
S/A
Ro
ux
20
10
Europe Africa
UN
Africa: Arable land
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1997/99 2030
% of potentialarable land not
in use
Arable land inuse as % of
potential arableland
UN. FAO
©U
S/A
Ro
ux
20
10
10
Africa
Finite natural resources
+
Ageing workforces
= ? Restoration of
Africa’s strategic
importance
©U
S/A
Ro
ux
20
10
Scenario framework for SSA
Two key issues
1. Developing legitimate and effective leadership and governance, based on rule of law
2. Developing a diversified economy, based on extensive natural resources
©U
S/A
Ro
ux
20
10
Natural resource-based economy Diversified economy
Ren
t seek
ing
be
ha
vio
ur
R
ule
of
law
Resource curse
African Renaissance
Postponing the inevitable
International takeover
©U
S/A
Ro
ux
20
10
11
With regard to the need for good governance in Africa the following should be taken into consideration: • Capital markets are not strong and the market capitalisation of listed companies is low. • The transformation of (some) well-established and entrenched habits, conventions and practices should be addressed. • State-owned and state-controlled enterprises play a too dominant role. • Central banks, given their important role, have a decisive influencing role. • Cooperatives and community-based business organisations, in particular small and medium-sized businesses, play a significant role. • Inadequate administrative systems and weak human resource institutions. • Corruption as a culture, strengthened by company bribes, including those by international companies.
Eliminating rent-seeking behaviour
©U
S/A
Ro
ux
20
10
©
US
/A
Ro
ux
20
10
Economic growth
Price stability
Minimising unemploy-
ment
Balance of payments stability
Human development
Equity Poverty
alleviation
SA real disposable income per capita (year 1=100)
80
90
100
110
120
130
140
1 2 3 4 5 6 7 8 9 10 11 12 13 14
1980-93 1994-2007
SARB ©U
S/A
Ro
ux
20
10
12
CPI inflation (%)
0
5
10
15
20
25
1
10 19 28 37 46 55 64 73 82 91
10
0
10
9
11
8
12
7
13
6
14
5
15
4
16
3
17
2
1980-93 1994-2008
SARB ©U
S/A
Ro
ux
20
10
Gross gold and other foreign reserves
0
5000
10000
15000
20000
25000
30000
35000
40000
0
50000
100000
150000
200000
250000
300000
350000
Rm $mRm $m
SARB ©U
S/A
Ro
ux
20
10
©
US
/A
Ro
ux
20
10
LSM equi-valent
Average household
income Attributes
Number 2001
Number 2007
% of total black African population 2007, 16
years & older
Emerging middle class
5-7 R2 436-R6 437 per month
Live in large city or town; have access to electricity; usually own a television set, stove, refrigerator, and hi-fi stereo.
6 312 748 9 317 056 39.7
Realised middle class
8-10 R8 429-R18 643 per month
Access to Internet; ownership of motor vehicles; higher educational qualification; easier access to credit.
n/a 1 408 062 6.0
South Africa‟s black African middle class aged 16 years and over
Compiled from BMR, 2008.
Prosperity….
©U
S/A
Ro
ux
20
10
13
©U
S/A
Ro
ux
20
10
… amidst poverty
World Bank
Unemployment rate, SA
0
5
10
15
20
25
30
35
40
2001 2002 2003 2004 2005 2006 2007 2008 2009
Black African Coloured Indian White RSA
StatsSA
©U
S/A
Ro
ux
20
10
… and unemployment
SA Gini coefficient
©U
S/A
Ro
ux
20
10
= structural inequality
World Bank
14
Dimension Expected yield State of scarcity State of
maldistribution State of
insecurity
Economic Goods; services
PLENTY
Poverty; inefficiency
Disparity; exploitation
Fear of deprivation; instability
Scientific
Information; knowledge; understand
TRUTH
Ignorance; incompetence
Elitism; illiteracy; lack of communication
Obsolescence
Political
Influence; participation
LIBERTY
Impotence; powerlessness
Centralisation; autocracy
Illegitimacy
Ethical/ moral
Peace
GOOD Normlessness
Conflict; discrimination
fanaticism
Aesthetic
Sense of belonging; excitement
BEAUTY
Meaninglessness; hopelessness;
boredom
Lack of shared image of desired
future; selfishness
Fear of loss of identity &
individuality; fear of loneliness
& isolation
Classical human aspirations Primary (first order) obstructions
Gharajedaghi; IFR ©U
S/A
Ro
ux
20
10
Relationship between growth, wealth and development
Dimension Expected yield Primary (first order)
obstructions
Economic Goods; services
PLENTY
Scientific Information; knowledge; understand
TRUTH
Political Influence; participation
LIBERTY
Ethical/ moral
Peace
GOOD
Aesthetic Sense of belonging; excitement
BEAUTY
Classical aspirations
Gharajedaghi; IFR
Society cannot develop
economically over the long term if, for instance, it is found lacking in
its search for truth, and in its
respect for liberty, for ethical behaviour and for
beauty
©U
S/A
Ro
ux
20
10
Relationship between growth, wealth and development
Dimension Expected yield Primary (first order)
obstructions
Economic Goods; services
PLENTY
Scientific Information; knowledge; understand
TRUTH
Political Influence; participation
LIBERTY
Ethical/ moral
Peace
GOOD
Aesthetic Sense of belonging; excitement
BEAUTY
Gharajedaghi; IFR
Secondary (second order)
obstructions
Alienation
Polarisation
Corruption
©U
S/A
Ro
ux
20
10
Relationship between growth, wealth and development
15
Growth Commission
In order to meaningfully reduce poverty and unemployment, economies need to grow at 7% a year for 25 consecutive years
13 countries have recorded an average growth rate of 7% per
annum for 25 years or longer since 1950
Botswana Brazil China Hong Kong Indonesia Japan Korea, Rep of Malaysia Malta Oman Singapore Taiwan Thailand
©U
S/A
Ro
ux
20
10
Growth Commission
Enhancing international competitiveness
Recipe for high, sustained
growth
Fully exploit the world economy;
import knowledge,
exploit global demand
Macro-economic stability
Modest inflation Fiscal
responsibility
Leadership & governance;
capable administration
Market allocation of
resources
Future orientation
High investment High saving
Growth Commission ©U
S/A
Ro
ux
20
10
None Some pri-
mary
Completed primary
Some secon-dary
NSC/ Grade
12 Tertiary
2002 11.8 17.5 7.0 33.3 21.1 9.1
2007 9.3 14.6 6.5 36.0 23.6 9.8
Educational attainment for persons aged 20 years and older
StatsSA ©U
S/A
Ro
ux
20
10
Enhancing international competitiveness
16
The National Benchmark Tests (NBT), 2009
The more than 13 000 students who wrote the NBT in February 2009 were from the Universities of Cape
Town, KwaZulu-Natal, Rhodes, Stellenbosch and the Witwatersrand, as well as the Mangosuthu University
of Technology, and they were spread across commerce, education, engineering, the health sciences, humanities, law and science.
The results were as follows:
o Academic literacy: 47% of the students were proficient in English, the dominant language of higher education, but almost the same percentage (46%) fell into the intermediate category, while 7% had only basic academic literacy.
o Quantitative literacy: only 25% of students were proficient in quantitative literacy, while 50% attained intermediate and 25% basic levels.
o Mathematics: only 7% of students were found to be proficient in the tests, which measured the skills needed to study first-year maths; some 73% had intermediate skills and would need assistance to pass, while 20% had basic skills and would need long-term support.
Source: University of KwaZulu-Natal, 2009.
©U
S/A
Ro
ux
20
10
Enhancing international competitiveness
GFCF and gross saving as % of GDP
0
5
10
15
20
25
30
35
40
1970
1972
1974
1976
1978
198
0
198
2
198
4
198
6
198
8
199
0
199
2
199
4
199
6
199
8
20
00
20
02
20
04
20
06
20
08
GFCF Gross savings
World 21% Low income 30% SSA 18% China 54% India 34%
SARB; World Bank
Savings and investment
©U
S/A
Ro
ux
20
10
0
1
2
3
4
5
6
7
8
9
0
10000
20000
30000
40000
50000
60000
70000
80000
19
60
19
62
19
64
19
66
19
68
19
70
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
% o
f G
DP
To
tal,
Rm
% of GDP Total (Rm)
0
5000
10000
15000
20000
25000
0
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
900 000
19
60
19
62
19
64
19
66
19
68
19
70
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
Total Per capita
Real GFCF in
economic
infrastructure…
needs to be 80%
higher in 2014 than
in 2008
Real fixed capital
stock of economic
infrastructure…
per capita stock
12% lower than in
mid-1980s
SARB
Savings and investment
©U
S/A
Ro
ux
20
10
17
©U
S/A
Ro
ux
20
10
Maintaining/consolidating democracy
• Protecting and separating the state from the ruling party without political intervention.
• Maintaining the autonomy of
the democratic institutions (eg SARB, auditor-general, public prosecutor, judiciary).
SA scenarios
Key issues
1. Retaining fiscal and financial rectitude
2. Will the country‟s stock of social capital grow or depreciate?
©U
S/A
Ro
ux
20
10
Economic populism Fiscal/ financial rectitude
Po
lari
sa
tio
n C
oh
esio
n
©U
S/A
Ro
ux
20
10
18
Economic populism Fiscal/ financial rectitude
Po
lari
sa
tio
n C
oh
esio
n
Ski-ing
Desperate measures
Sustainable development
Palace revolution
©U
S/A
Ro
ux
20
10
Continually connected Seek work with an overriding meaning and purpose
Speak their own language Seek a work/life balance
Sceptical of authority Are driven by job challenges and meaning rather than money
Influenced by peers Volunteer extensively
Seek recognition and fame Fiercely independent and vocal
Enjoy absurdity and odd humour
Sceptical of institutions
Embrace a variety of sub-cultures
Value participatory, supportive & collaborative work environments
Skim text and information quickly
Seek a career path and development programme that exposes them to a variety of functions , work experiences & cultures
Easily bored Recognise that they are a valuable commodity & have multiple career functions
Expressive and digitally creative
Are willing to change employers quickly if their needs are not being addressed
©U
S/A
Ro
ux
20
10
Placing hope in Generation Y
Millennials
From Generation X to….
Millennial generation/ Generation Y
Born 1990s and 2000s now children and teens
SA: 2005 21.2m
Influenced in their youth by
Global village 9/11, global terrorism, protectionism
Internet and cell phones
Core values Optimism Civic duty
Confidence Achievement
High self-esteem Impatient
Media & entertainment overloaded Naivete
Conservative Global citizens
Street smart Techno-savvy
Networkers Sceptical
Informal Diverse
TomorrowToday ©U
S/A
Ro
ux
20
10