Renowned trend and political analyst JP Landman addressed attendees of Microsoft`s SITO Summit 2006 at Fancourt in George, which took place from 17 to 19 May.
The Senior Information Technology Officer (SITO) Summit brings together the most senior-ranking functional decision-makers for overall IT strategy and implementation in an innovative and interactive way.
Speaking at the SITO summit and painting the South African economy in a positive light, Landman outlined the four major factors shaping trends in South Africa, being population growth (or demography), economic performance, commitment to openness in the economy and national productivity.
Detailing the first factor, Landman says: "Demography is destiny. A lower population growth helps promote economic growth and reduce poverty."
He explains that the population growth of South Africa has improved from being 2% per annum in the 1980s to now being below 1%. Contrasting this to the averages of 0.6% for developing countries and 0.3% for the developed world, this places South Africa in a favourable position with a projected population growth rate of 0.25% per annum by the year 2010.
Moving on to the performance of the South African economy, Landman draws attention to the price of gold in 1981 of $852. "This is now around $700," he states. "While a very good price for gold, not as good as it was before the end of the gold boom in 1982." He refers to the 25 years following 1981 as the `lost years` where South African society grew perpetually poorer from 1982 to 1994, after which the downward trend in income levels was reversed.
"In the 1980s our economy suffered a rate of 0.7% per annum," recalls Landman. "This improved to 2.5% during the term of President Mandela and at the turn of the century, during Mr Mbeki`s term as president, reached 3%. Between the period of 2004 to 2007 the rate is now 4.5%. This is a phenomenal improvement and is projected to reach 6% by 2014."
He reminds the attendees that South Africa is still dealing with the consequences of the poverty created by losing 25 years in economic growth, and that the recovery of the economy is truly remarkable.
This brings Landman to the issue of committing to an open economy. Here he commends the South African government for sticking to its commitment to an open economy, an unpopular move with local trade unions and other industry bodies.
"The South African currency collapsed in 2001," says Landman, "suffering dismal exchange rates and leading to the interest rate being raised in 2002. Now the Rand is too strong. Nothing has vindicated Mr Mbeki more in his commitment to openness than the current power of the rand."
Discussing productivity, Landman insists that the openness of the economy forces a greater commitment to productivity from local industry as it is placed under pressure from international competition. He points out that competition is key to driving productivity which benefits the economy and that regulated markets are not desirable.
Finally, Landman assesses the sustainability of current growth trends in the South African economy, again presenting a positive outlook. The sustainability of economic growth, he says, is encouraged by government`s commitments to initiatives such as ASGISA (Accelerated Shared Growth Initiative) which will carry through to the next presidency. He warns, though, that the key factors of sustainability, being the structure of economic growth, job creation and productivity must continue to improve if sustainability is to be ensured.
"We must improve best practices and mature business while thinking about ways to improve productivity," he insists. "We must also share and learn from each other in gaining new pathways to growth." This is a central theme of the summit, where sharing in ideas is key.
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