During his talk, entitled A giant leap in economic time, he explained: "People shape economies, and demographic as well as political changes have shaped our world over the past century. While white South Africans currently have a low unemployment rate, they are still the wealthiest and best educated. This is rapidly changing with the other racial groups catching up fast."
South Africans will have to do a mind-shift and be geared to do business with sub-Saharan African countries as well as China and Russia. "We can get the benefit from being a member of BRICS (Brazil, Russia, India, China and South Africa). There is a shift in demographics and China is emerging as the biggest industrialised nation. "We need not see the Chinese as a threat. Look at Japan - there were widespread fears that they would dominate the world, but instead their economy has been in recession for the better part of 20 years, after very strong growth during the sixties, seventies and early eighties."
Roodt predicted that a few decades from now there would be fewer currencies worldwide and it would make sense for Europe, South Africa and the rest of Africa to have the same currency. Presently the Rand strengthened somewhat, but because of our government's policy uncertainties, among other reasons, we can expect a weaker Rand. The US can expect their Dollar to remain the currency of choice in the short term. At the root of the financial woes of the US and Europe is that they became more socialistic with more government interventionism. This while China moved from a state-controlled socialism to a freer market economy.
Uplift women
Due to the low birth rate, the white South African population is shrinking and they will increasingly become irrelevant in the bigger picture. South Africa has one of the world's largest relative spenders on education, but often has the worst outcome. The most effective way of uplifting a nation is through providing a better education, particularly to women, and by admitting them into the workplace. This will ensure that their children will have a better education and a better future.
SA's civil service is imploding on itself in terms of efficiency. This is due to being bloated, expensive and ineffective. Civil servants will have to take note that a growing economy is the only thing that will create jobs and eradicate poverty. When the Minister of Mineral Affairs, Susan Shabangu, uttered threats about mineral mining rights, she was being totally arrogant and ignorant of the basics of economics. Referring to Zimbabwe wanting a R100-million loan from the South African government, Roodt said this money would be taken out of SA's official reserves and it will therefore not have an impact on our economy. A last word of advice was - whatever you do, diversify.
The capital markets are offering 7 per cent interest, but the local share markets are still a bit expensive, so while you should have a share portfolio, wait before making any large purchases. While the US share market is slightly cheaper their capital market bubble is a real threat. Local property prices are down so now is not a bad time to enter the market.
Dawie Roodt has a Masters Degree in Economy, is a chief economist and a director at Efficient Group - a financial services company. He makes regular appearances on TV and elsewhere and is also a lecturer at Pretoria's Gordon Institute of Business Science.
At SAICA's breakfast held at Tramonto, chartered accountants with Ernst and Young are ,from left: Cheryl Segon, Elizna Prinsloo and Marlé Jacobs. Photo: Pauline Lourens
Economics guru Dawie Roodt (left) gave an insightful historic overview on the South African economy at SAICA's breakfast held at Tramonto. SAICA Southern Cape Branch Chairman Pieter Esterhuizen (right) and SAICA Senior Executive: Member Services Langa Mconi (middle) stands by. Photos: Pauline Lourens
