How world sees SA in 2020 – Heading for junk

2019 was the year when it became clear that the financial crisis at Eskom was a national debt problem. The New Dawn in South Africa that the election of President Cyril Ramaphosa promised when he came to power turned into a long night with the total breakdown of many of the country's state owned enterprises. The year was peppered with power blackouts, the business rescue of SAA and similar problems at Prasa and the SABC. Finance Minister Tito Mboweni had to dig deep into the national treasury to try to keep the lights on with R59bn in bailouts for Eskom. Moody's was the only ratings agency that did not downgrade South Africa to junk status. For Ramaphosa and Mboweni to turn this situation around and get the nod from the ratings agencies; drastic steps are needed, steps that would take a confrontation with the unions. He and Public Enterprises Minister Pravin Gordhan managed to stare down the unions in the case of SAA, but getting past the unions to implement their turnaround plan for Eskom is going to be tougher. Cosatu has threatened with protests on the very first day that Eskom's new CEO Andre de Ruyter steps into his office. If Ramaphosa and Mboweni don't; the FT's prediction on South Africa may well be right and South Africa could be reduced to junk status early in the new year. – Linda van Tilburg.By Thulasizwe Sithole.When it came to predictions for 2019, the FT acknowledges that it got it wrong as the world appeared to be even more unpredictable than before. In the case of Brexit, forecasting that Brexit would be reversed as Philip Stephens did ,was based "as much in hope as expectation." Populists did not make the gains in the European parliament elections that was expected and the S&P 500 beat the expectations of most analysts. But the FT's predictions and that of their readers were better than it was 2018. So with that caveat; the paper is making another go at it and its predictions for South Africa is not great..___STEADY_PAYWALL___.South African debt will hit junk status.The FT describes South African's sovereign debt rating as "hanging by a thread" as Moody's is the only ratings agency that still has the country's debt rating above junk. But it put South Africa on "negative watch saying the government lacked the political will to implement reforms." Weighing on an economy that has stalled ,is Eskom the state-owned enterprise with R420bn of debt that "has imposed growth-sapping blackouts" and South African Airways that has been placed in business rescue. The FT says Finance Minister Tito Mboweni has the odds stacked against him to "persuade Moody's that things are salvageable..Also read: The unchartered 'junk' territory – what the analysts say.The US will not go into recession.A Duke University survey indicated that a recession was expected by chief financial officers in the United States over the next year and a possible recession "haunts the markets, the White House and U S corporate leaders." US companies appear to be weary as many "have been cutting capital spending" But the FT predicts that growth will continue in the US in 2020 "with unemployment still at rock-bottom and jobs being created for the poorest part of the economy." The US appear to be defying normal business cycles and the FT is predicting it will continue to do so..Trump could be re-elected but lose the popular vote.The prediction for the US elections in November is that the popular vote in the US would swing further towards the Democrats. Hillary Clinton did get 3 million more votes than President Trump in 2016, but lost the electoral college and the FT predicts that this margin would widen in 2020. But many of the new votes against Trump could be wasted votes as they live in states that are already pro-Democrat such as California and New York. They predict that the "real battle will again come down to the smaller mid-western states that delivered victory to Mr Trump last time.".The UK will conclude a trade deal with the EU.Newly re-elected British Prime Minister, Boris Johnson is going for broke… again by setting the deadline for a trade deal with the UK in law. The FT however thinks it won't be much beyond a "bare bones deal covering trade in goods" during the time period that Johnson has set for himself. The UK wants to remove tariffs and quotas on all goods, but some elements of this could be sticky, particularly a contentious insistence by the French that they should still be able to continue fishing in UK waters and "that Britain give assurances that it will not seek to undercut EU standards on labour and the environment.".Big Tech will not see meaningful regulation.Calls for regulation of big tech and their large scale free use of our private data, but the FT predicts that it will not happen in the huge US market as it would be difficult to get a privacy bill approved. While the Democrats favour tougher rules, the Republicans are against regulation and as they currently have the majority in the House, it is unlikely to go through. The United States has pushed countries that they do trade deals with to include a provision that the tech giants are not treated as publishers as they did with Canada and Mexico and are likely to "make it part of any new transatlantic deals. The EU will continue its efforts to strengthen privacy regulation, but a "precedent-setting case will take years to complete.".China will become a world leader in 5G telecoms.It is predicted that China "will surge far ahead of other countries" in the race for 5G. Huawei is expected to outperform Ericsson despite the efforts by the US to curb the expansion of Huawei due to security fears. In terms of smartphone sales, it is predicted that "Huawei, Oppo, Xiaomi, Vivo and other Chinese makers will far outstrip Apple, Samsung and others.".Global carbon emissions will not fall.As the fast growing economies in the world continue to be the big users of coal, emissions from fossil fuels will continue. It has been "growing 0.9% a year on average since 2010 and China emits more carbon dioxide than the U.S and the E.U combined. If the global GDP grows and Beijing continues to stimulate the Chinese economy; the need for coal would increase..For more predictions on India, a possible war with Iran, protests in Latin America, France's fight with Russia's President Putin, the future of streaming services, the profitable of Uber and vaping, click here.

How world sees SA in 2020 – Heading for junk

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