By Alec Hogg
South African president Cyril Ramaphosa gets a bad press. The former trade unionist is regularly attacked from all sides for his human frailties – real or imagined. But there are many areas where he is a significant upgrade on his predecessor. Among the most important is an appreciation of how important the rest of the world is to us.
As Stanlib chief economist Kevin Lings shared in last night’s weekly raft of graphs, SA is now one of the most “open” economies on earth. Two-thirds of the nation’s economic activity (see image above) is directly related to trade with the rest of the world. Exports are responsible for 33.6% of GDP; imports for 32.5%.
Put differently, give or take a few percentage points, if SA suddenly isolated itself from the rest of humanity, business activity in the country would collapse to a mere one-third of its current level. This puts SA right up there with the poster boy for mercantilism, the UK. By comparison, the US’s trade-to-GDP ratio is 25%; and China’s 38%.
So, while Americans and, to a lesser extent, Chinese could play fast and loose with international relations, just like the Brits, we can’t. What others think of us matters. A lot. This is why today’s opinion piece from our partners at the FT should be heeded. It’s a wake-up call for Pretoria. There’s more than just politics at stake.
Sterkte
Alec
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