Stop moaning and start doing
Like most seven-year-olds, my granddaughter Gabriela is losing her milk teeth. While packing for her trip to visit family in South Africa, she pleaded to write to the Tooth Fairy to ask that if she lost a tooth on the plane from New York to Johannesburg, she be compensated in US dollars, not rands.
Gabriela is not the only person deeply concerned about the weakness in our currency. The steep decline might favour certain exporters, but for the vast majority of the population the costs are wide-ranging. The price of virtually every item we consume daily is bound to rise appreciably, the most obvious being the petrol price. Over the past three years the oil price in rand terms has doubled, plucking a chunky portion of disposable income .
We're all praying the rand recovers, but in the current economic and political environment, any meaningful rebound might be far-off.
The last decade was a golden era for emerging economies. China's policies to develop infrastructure crucial for its sustainable growth led to an unprecedented demand for raw materials such as copper, iron ore and coal. Rich nations like Australia and Canada were well- positioned to benefit from Chinese trade, but so too were a host of less established commodity producers that included Brazil, Russia, Indonesia and South Africa.
But China's new leaders are now acting more carefully, shifting focus from fixed investment to household consumption and services. Resource prices have tumbled with the regime's change in direction, squeezing economies that made the big mistake of betting China's appetite would expand indefinitely.
At more or less the same time China was embarking on its grand building ventures, a crisis was brewing in financial markets that ultimately resulted in the collapse of giant US investor banker Lehman Brothers.
To avert a global meltdown, central bankers around the world were obliged to reduce interest rates to historically low levels and introduce arrangements designed to prop up the banking system and offer cheap finance to corporate and private borrowers. Investors, taking advantage of the cut-rate fountains of liquidity, pumped the proceeds into higher-yielding securities in emerging markets.
But now, six years down the line, the US, Europe and the UK are taking their first steps to recovery, lifting business confidence and willing consumers and businesses to spend more. As central bank governors celebrate their successes and hint at tapering generous monetary policies, the streams of funds that flowed into the developing world are suddenly reversing course at great speed.
Most emerging economies have also been sunk by their inability to convert opportunity to growth. Governments failed to take advantage of good times to invest adequately in infrastructure, maintain business reforms and liberalise labour markets.
Skills remain scarce, graft high and incompetence pervasive.
South Africa's burdensome social spending programmes, disruptive labour unions and obsessive transformation imperatives have added difficulties, putting the economy in a spot that will require bold attitudinal policy changes to remedy.
Jim O'Neill of Goldman Sachs, who coined the acronym Bric (Brazil, Russia, India and China) and who recently argued that South Africa's population was too small and its economy relatively too well-developed to be included in the extended club, lamented that the nation was trapped in its legacy. He warned the government to start looking forward and stop carrying on as if the world owed it.
Until we lighten up and become doers instead of talkers and create a winning mentality that lives up to the rhetoric that the nation belongs to all, we will not attract or retain the skills and funding we need to tackle the challenges ahead. Even little Gabriela has figured that one out.
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