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The Reality

Posted By Chris Reay, Thursday, 25 September 2014

The South African economy is sick. The diagnosis has been going on for a long time, but the prescriptions have been ignored. It is evident that the body may not find the energy and perhaps the will to recover without some serious surgery. The danger of infection is greater as the invasive nature of the surgery is complex. The doctors and specialists (quacks?) may not succeed in finding a recovery routine before incapacity of the patient becomes permanent. To make matters worse, the patient is in a state hospital.

I am writing these words as the engineering based industry, having just had a serious dose of platinum deficiency syndrome, is now steeped in a viral bout of non-metal-working plague. It is going to take a patient with a very strong immune system to overcome this one. Many of the limbs that support the body may simply not survive, suffer from permanent damage and shrink into a state of paralysis.

All the machines (that are working) are monitoring the patient as follows. For clarity, the health monitor dashboard terminology has been calibrated with economic metrics.

Productivity: declining with the record showing the index has shown a reduction of 41% in the last 10 years. The meter rider position shows that the current level is the lowest in 46 years.

Employment: declining.

Unemployment: Increasing

Economic growth rate: Declining, now below 2% pa

Rand parity with world currencies: declining.  Rand: US$  1994: 3.55:1   2014:10.80:1

International Investment rating: Declining towards junk bond status

Corruption factor in government and the economy: increasing, reaching epidemic levels

Infrastructure status, education and service standards: declining

Small Medium Enterprises development rate: at best static but declining in small manufacturing.

Inflation rate: increasing

“Real” recession: evidently active and technically in stage of stagflation

Cost of living of basic items basket: rising (at alarming rate)

Centre of gravity of skilled and experienced engineering resources: moving into 50-60 age spectrum

Potential for Engineers to survive economically at retirement: declining

I do not think we need any more metrics to realize that the patient is in really big trouble.

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