South Africa is not alone. The world is a tricky place at the moment.
In the US, there is the very real possibility that next year will see two octogenarians (one with an ever- growing list of legal challenges) fighting it out for a chance of a second term as president, in what must be one of the world’s most stressful jobs. And if one of them gets it, they will be in their mid-eighties when they finish their term.
This is, of course, good news, as it says something about the way we are ageing. We’re all going to live longer, so it makes sense that we work longer – even into our eighties. However, it is in stark contrast to the other side of the planet, where French protesters are burning down Paris because they refuse to move the retirement age from 62 to 64. This has to be implemented, otherwise their pension system is going to go broke.
A few hours from there the war in Ukraine rages on. Vladimir Putin hoped to announce victory at his annual May 9 victory parade last year, yet a year later the date passed again with a nervous unease hanging over both Moscow and Kiev. Also, increasingly uneasy are the Western taxpayers, and Putin knows this. What started as a good idea – to save Ukraine – was only meant to last a couple of weeks or months, but as we head into the second year, not all Western voices are singing in unison. Putin knows that the US, Europe and UK all have elections next year and many opposition parties are campaigning to cut spending support for Ukraine, so Putin is hanging in there, waiting for war fatigue to set in.
South Africa’s bizarre non-aligned neutrality on the subject has seen The Economist magazine shifting us from “neutral” to “Russia leaning”, and understandably so. They won’t be alone. Whether or not one likes the West is not the point. NATO countries are our biggest trading partners – they buy our goods, and that creates employment. Create jobs in South Africa and you solve a whole host of other problems like crime and poverty. Destroy jobs and you exacerbate all these problems.
On the subject of anti-West sentiment, there’s no doubt the BRICS1 group as we know it is going to expand in size. As interest in that group rises, so too does talk of de-dollarisation. While there is no doubt that one day an alternative currency to the dollar will gain traction, to call the death of the dollar now (or any time soon) is premature. Remain diversified, and if and when an alternative arises, you can gradually upweight, but don’t expect it any time soon.
South Africa is currently in the throes of massive job-shedding as a result of state capture-induced load-shedding. We therefore simply cannot afford the additional jobs carnage that will come our way if the Americans and the Europeans decide to cool towards us from a trade perspective.
So, as our country heads into what promises to be yet another ‘discontented’ winter there is some respite.
The world is recovering. Inflation has peaked. Interest rates should have peaked but haven’t (quite yet), and that will bring some relief to our economy and to our battered, oversold currency.
In terms of the US banking crisis, and potential global contagion, while you can never say it’s impossible, it’s apparently unlikely. There seems to be general consensus amongst analysts that this is not 2008, that the authorities moved fast and effectively stemmed wider contagion.
On the electricity front, according to a “well-placed source within Eskom”, Business Day tells us that winter will be tougher. We use more heaters, and we need lights more hours in the day, so demand increases. While Eskom cuts back on maintenance during winter, the shortfall will be larger, and we will see more load-shedding.
Apparently, increased load-shedding doesn’t mean the grid is closer to collapse. The good news is that apparently there is a system operator somewhere in the bowels of the organisation whose job it is to ensure that the grid doesn’t collapse entirely.
You can rest comfortably because apparently our ‘system operator’ is world class, and so good in fact that we have apparently been coaching the Europeans on how to deal with large system deficits.
Hope that makes you sleep better at night.
1 BRICS refers to Brazil, Russia, India, China and South Africa.
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