We need to rethink economics to build a new social contract

THERE are many factors indicating this will be a critical year for SA. Number one is the shaky economic outlook, especially the predicament with our currency, which has reached historic lows and shows no signs of recovery.

While the weak rand may thrill a few exporting companies, it will have a major negative effect on our imports, which include a growing number of consumer goods. At a time of shrinking demand for commodities, which make up a crucial part of SA’s exports, the weak rand will make almost no contribution to the country’s income, while inflicting a heavy blow to households and businesses.

With no or little growth in an economy designed to function at a high rate of gross domestic product growth, the middle class (including self-employed workers, teachers, nurses, doctors, small business owners and the large variety of families sustaining the day-to-day functioning of our economy) will struggle to make ends meet.

Read the full article here.

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