Growth has been sufficient to avoid collapse. It has not been sufficient to create prosperity. That is both the challenge and the opportunity before us, writes Daryl Swanepoel in the latest in the True South Africa series.
South Africans often judge the health of the economy by looking at unemployment, poverty and inequality. That is understandable. Those are the realities people live with every day. But they are not, in themselves, measures of economic performance. They are the consequences of economic performance. If we confuse symptoms with causes, we risk misunderstanding both the problem and the solution.
That distinction lies at the heart of the Inclusive Society Institute's latest True South Africa report on the economy. The evidence paints a more nuanced picture than either the optimists or the pessimists would have us believe.
South Africa's economy has not collapsed. But neither has it grown nearly fast enough to create the jobs, incomes and opportunities that South Africans rightly expect. The difference matters.
Much of the public debate proceeds from the assumption that South Africa is experiencing economic freefall. The data tell a different story. Since 1994, real gross domestic product has expanded from around R2.5 trillion to more than R4.6 trillion in constant prices, that is an increase of approximately 85%. That is not the trajectory of a collapsing economy. Inflation has remained broadly under control within a credible monetary framework, the country's financial system continues to function effectively, and the rand remains one of the most actively traded emerging-market currencies in the world. These are not the hallmarks of an economy in collapse. They are the characteristics of an economy that has remained remarkably resilient, despite repeated domestic and global shocks.
