{"id":108007,"date":"2016-01-04T19:28:45","date_gmt":"2016-01-04T17:28:45","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=108007"},"modified":"2016-01-04T17:30:39","modified_gmt":"2016-01-04T15:30:39","slug":"unemployment-a-bigger-scar-than-apartheid-racist-economist","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/trending\/108007\/unemployment-a-bigger-scar-than-apartheid-racist-economist\/","title":{"rendered":"Unemployment a bigger scar than apartheid: ‘racist’ economist"},"content":{"rendered":"

Influential<\/span> economist Chris Hart was taken to task following a post he made on social media site Twitter on Sunday, which was deemed to be racist.<\/p>\n

The Standard Bank employee began a series of tweets on Sunday with the following: \u201cMore than 25 years after Apartheid ended, the victims are increasing along with a sense of entitlement and hatred towards minorities\u2026\u201d<\/p>\n

The tweet drew strong criticism, with users calling on Standard Bank to take action against the respected economist.<\/p>\n

The bank duly distanced itself from Hart’s comments on Monday, stating that it “will be instituting appropriate internal disciplinary processes”.<\/p>\n

It said it had suspended Hart pending an inquiry into the events of his commentary.<\/p>\n

Hart apologised for his initial tweet: “This tweet has caused offence – never intended for which I apologise wholeheartedly. Meant to be read in context of slow growth.”<\/p>\n

However, before his apology, the economist fired off a number of posts relating to the country’s lack of growth.<\/p>\n

Hart said the economy is capital deficient and is struggling with low growth and high inflation.<\/p>\n

The consequence of low growth is that unemployment continues to rise, he said.<\/p>\n

Hart said that Apartheid is the country’s national scar. But unemployment has become a bigger scar.<\/p>\n

He concluded that for transformation and exclusion to be resolved, SA needs a massive expansion. “The economy is currently way too small,” he said.<\/p>\n

The sequence of Hart’s tweets on Sunday were as follows:<\/strong><\/p>\n

Poisonous ideologies are flourishing – Economies are never built on entitlement but on productivity.<\/p>\n

To sort out the maladies, the economy desperately needs growth derived from bottom up not trickle down. Investment in business activity.<\/p>\n

The reality (whether a legacy of any sort or not) is that all wealth gets originally produced by business and enterprise activity.<\/p>\n

The reality is that (whether a legacy exists or not) that no new economic activity comes into existence without investment.<\/p>\n

The reality is that (whether there is a legacy or not) that all investment is resourced through saving point is, that whatever the past has been, SA needs to win the future.<\/strong><\/p>\n

That does not mean ignoring the past, but it is needs to be helpful.<\/strong><\/p>\n

The vitriol is expected. All about \u2018white privilege\u2019 apartheid beneficiary. But nothing about building the economy.<\/strong><\/p>\n

Let\u2019s take education. Pass rate falls: reality of hiding problems through lowering standards is being exposed. Lower standards did damage.<\/p>\n

In education, there are schools that don\u2019t have proper ablutions. More than 20 years after 1994. Yet money has been allocated to fix this.<\/p>\n

No ablutions in schools? Blame is very appropriate on the Apartheid govt. but now? Blame very appropriate on current govt.<\/p>\n

Firstly, my opening tweets were observations, not my view. Secondly, the economy faces major challenges. Thirdly, we can and must do better.<\/strong><\/p>\n

The economy is struggling and with a local election looming, blame game is in full swing.<\/strong> If policy strategy is not changed econ (economy) will struggle.<\/p>\n

The economy is capital deficient and is battling with low growth and high inflation. Jobs are not being created.<\/p>\n

Policy strategy involves increased state spending and a focus on infrastructure spending led by the SOEs.<\/p>\n

However, against that strategy, there is a triple deficit: current account; govt budget and households (tax base).<\/p>\n

SOE driven infrastructure spending has not worked well. Cost overruns, schedule overruns and capital deficiency are problems<\/p>\n

At the same time, sovereign credit rating is at risk to be downgraded to junk. A certainty if govt expenditure grows against stagnant econ (economy).<\/p>\n

There are four expenditure threats: wage bill; national health; SOEs and nuclear. All unsustainable without economic growth<\/p>\n

The consequences of low growth is that unemployment continues to rise.<\/strong> SA needs to turn itself around and avoid a downgrade.<\/p>\n

The rise in state spending has effectively transferred resources from high multiplier activity to lower multiplier activity, slowing growth<\/p>\n

Falling state institutional effectiveness further reduces the expenditure multipliers.<\/p>\n

Yet to get growth, investment into business and enterprise activity is most important. Infrastructure of secondary importance.<\/p>\n

Like water flows downhill, capital also gets attracted to the more welcoming jurisdictions. SA has become more difficult to do business.<\/p>\n

SA now 96th most economically free. Ease of doing business also more difficult.<\/strong> These things must improve for SA to grow and lead Africa.<\/p>\n

The three key mistakes: labour unrest; regulatory escalation and taxes that target capital formation and investment viability.<\/p>\n

So while the global economy slows, SA is seen as a risk destination. We should become a haven destination.<\/p>\n

Essentially, redress policies have focused on economic transfer rather than growth. Yet exclusion is perpetuated by lack of growth.<\/p>\n

The labour force numbers: (roughly) 110 000 unemployed whites; 8 million unempl(oyed) blacks; 14 million employed (total); 2 million employed whites.<\/p>\n

The actual numbers show unemployment problem is essentially a black problem.<\/strong> If one normalizes participation rate, 10m+ jobs are required.<\/p>\n

Even if there was full economic transfer and full exclusion of white from the economy, there would be a massive black exclusion problem.<\/strong><\/p>\n

The reality is that we can bemoan the legacies of Apartheid but that does not solve the problem of the massive number of unemployed.<\/strong><\/p>\n

Economic transfer policies may satisfy the more emotional side of Apartheid redress but provides zero solution to the excluded.<\/p>\n

SA also needs foreign investment to be part of the modern economy. Foreign investment brings technology that we could not possibly replicate.<\/p>\n

In conclusion – for transformation and exclusion to be resolved, SA needs a massive expansion. The economy is currently way too small.<\/strong><\/p>\n

Apartheid is SAs national scar. But unemployment has become a bigger scar. SA needs saving, investment and growth.<\/strong><\/p>\n

Resolution of unemployment diminished most other socioeconomic problems: poverty, inequality, education, health, crime, housing.<\/p>\n

Unemployment has to be the most important policy priority.<\/strong> At the moment policy confusion has relegated job creation to a low priority.<\/p>\n

Unemployment needs employers. If 10-15 million new jobs are needed, then 2-4 million new businesses are needed. Businesses employ. Infrastructure doesn\u2019t.<\/p>\n

Govt strategy of creating 100 black industrialists problematic. Nowhere near a solution when it needs to be tens of thousands at least.<\/p>\n

A focus less on what exists but what needs to come into existence is what will really accelerate transformation.<\/p>\n

While it is psychologically NB to focus on the lack of black top 40 CEOs, reality is we need to be building another crop of top 40 companies.<\/strong><\/p>\n

\u2026and that is not saying transformation of existing companies must be ignored.<\/p><\/blockquote>\n

More on social media in SA<\/h3>\n

Standard Bank suspends economist after \u2018racist\u2019 tweets<\/a><\/strong><\/p>\n

Standard Bank to discipline economist for \u2018racist\u2019 tweets<\/a><\/strong><\/p>\n

White South Africans proud of their supremacy: EFF<\/a><\/span><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

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