At a time of high stress, elevated emotion and growing concern about South Africa's economic health, it is worth putting thoughts to paper to make sense of our circumstances and offer a sense of perspective. It is hardly debatable that South Africa finds itself in a dire economic situation. Eskom is unable to meet the demand for electricity, resulting in rolling blackouts and disruptions to the economy's productive sectors.Seven of eight key industries saw the biggest drop in turnover since 2010 in the first quarter of 2015. Already this year, 44000 white-collar jobs have been lost. Unemployment is at a 12-year high of 26.4%. Consumer price inflation is expected to breach the 6% upper limit by the end of the year.In the first quarter of 2015, the economy grew by an annualised rate of just 1.3%, which is slower than population growth and well below the average annual growth rate of 3.1% that had been achieved over the past two decades. Adding to this tough landscape is the fact that it is extremely unlikely that economic growth will perk up any time soon.story_article_left1To be more exact: we are facing GDP growth of around 2% this year after last year's feeble showing of 1.5%, which followed the five-month platinum sector strike. Although the oil price collapse from $100 a barrel to $50 a barrel in the last quarter of 2014 provided material relief to the South African economy, the oil price has since stabilised and is now drifting upwards. This is creating new pressures on the economy, price inflation and the rand.It is not surprising that consumer confidence has plunged to its lowest level in almost 15 years and that business confidence has fallen to a worrying 16-year low. British-South African journalist and historian RW Johnson - in his new book, How Long Will South Africa Survive? - gives the country two years. Things could hardly seem bleaker.But South Africa has been in equally tough situations before. The country is often on a knife edge; you only have to consider the 1976 Soweto school riots or the assassination of Chris Hani to remember that we have had our share of deeply troubling moments.At times like this, emotions tend to become charged. But, then again, we are human, and, in such settings, perspective is often lost or distorted.There is a quote attributed to American author Mark Twain that I think offers some perspective. In 1934, Reader's Digest quoted him as saying: "I am an old man and have known a great many troubles, but most of them never happened."Too often we are focused on the negative and fail to see the positives. Take, for example, our situation in South Africa. Although much of the social and economic progress we have witnessed over the past two decades has been incremental, and sometimes of a "stop-start" nature, the results are, nevertheless, notable. Income per person (adjusted for prices) has grown from about R27500 in 1993 to R41500 per person - the highest level yet - by the end of 2014.While education and healthcare still have massive delivery deficits to resolve, any analysis would be incomplete if it ignored many of the important structural advances that have been made in terms of key socioeconomic factors, including access to education and healthcare. To illustrate some of the gains: life expectancy has risen from 52 years in 2005 to 61 years, which is evidence of material improvements in health and access to healthcare.Perhaps the most important number in the country's recent history is that, in the past 20 years, at least threemillion South Africans have joined the ranks of the middle class. The reason this middle-class population figure is, arguably, the single most important number is identified by Harvard-trained economist Dambisa Moyo, who recently made the observation: "Countries like Taiwan, Singapore, Chile, not just China, have shown that, actually, it's economic growth that is a prerequisite for democracy."In a recent study, evidence has shown that income is the greatest determinant of how long a democracy can last. The study found that if your per capita income is about $1000 [R12000] a year, your democracy will last about eight and a half years. If your per capita income is between $2000 and $4000 per year, then you're likely to only get 33 years of democracy. And only if your per capita income is above $6000 a year, you will have democracy come hell or high water. What this is telling us is that we need to first establish a middle class that is able to hold the government accountable."story_article_right2Stepping back into the here and now, although consumer price inflation is moving upwards, rates over 10% are a distant memory and are likely to remain that way given the Reserve Bank's discipline and exceptional policy strength. GDP growth may be sluggish now, but it was negative for three and a half years before the 1994 election, giving rise to one of our most prolonged recessions, from which we recovered to experience South Africa's longest uninterrupted phase of economic growth on record. Pronounced stresses and exaggerated recovery are not exceptional in dynamic economies, and, if anything, are the rule and not the exception in South Africa.While I don't believe we will suddenly see the economy growing at a 4% or 5% rate any time soon, we are certainly headed towards a recovery. Growth should gradually rise back to South Africa's structural rate of 3% a year. This growth will be helped by growing infrastructural delivery by thepublic and private sectors - although public sector programmes will be over budget and behind time.Such inefficiency in public sector delivery is a perennial feature of emerging markets and - in thinking about business and investment opportunities - sluggish public sector delivery could represent a huge prospect for enterprises involved in alternative energy supply, for example. In addition, South Africa remains by far the most sophisticated economy in a neighbourhood that ranks as the second-fastest-growing region in the world, after Southeast Asia.At a time of high stress, anxiety and justifiable concern, it is critical to maintain perspective, which is a key ingredient in all disciplined investment processes. While South Africa has much more to do to become a place in which the best happens, the country and the economy are far from a place where the worst happens.Saville is chief strategist at Citadel..