New Measures, New Thinking, New Eyes
Writer Rob Rusconi, independent researcher and consultant
South Africa’s income inequality remains stubbornly high, despite government support through social grants. Many are coming to realise that addressing poverty calls for investment from the bottom up. That may require a fresh look at opportunities for investment that consider the potential, rather than focusing unduly on the risk
• Many experts agree that GDP is an inappropriate measure of national progress, yet we continue to hinge our achievements on this figure.
• Chasing numbers has traditionally been the barometer for investment success, but this, too, is demanding a rethink as yields become less certain.
• As more people question existing ways and measures, the world may be on the cusp of change.
• Finding hidden opportunities requires decision-makers to see and do things differently.
• Investing productively in South Africa’s future calls for a courageous re-assessment of risk that considers the impact of investing for the long term.
Where does a discussion on the growth potential for investors begin? As any good banker will tell you: over wine and canapés, surely.
The patter of cocktail party chatter suggests that prospects for global returns are broadly positive, but that headwinds cannot be ruled out. Did somebody raise concerns regarding the levels of global debt? We may not be out of the woods yet, someone proclaims. Prepare for an extended period of low returns, I hear. But wasn’t all this conventional wisdom 15 years ago, after we survived the dot-com disappointment surprisingly well?
Rather let us drown out the chatter and agree that nobody really knows what the future holds, but decent diversification would be prudent.
And what of the South African environment? Muted for now, it seems, but long-term prospects are decent, depending on the leadership of key institutions. That is not in our hands, though, is it? The ANC made its choice and markets heaved a sigh of relief, but the Cyril Ramaphosa team now has to pull things together. Good luck to them, says my neighbour, putting down his drink, checking his phone for his ride and setting out for home.
What would his taxi-driver say, or the gentleman guarding his property at his gated village? And if it rains tomorrow, will these men be able to stay dry and keep their children’s feet warm?
Thinking in new ways
When we ask questions regarding the prospects for growth, do we apply our minds to our words? More precisely, whose growth are we thinking about?
Kate Raworth and Lorenzo Fioramonti ask probing questions about the appropriateness of GDP. Martyn Davies lauds the merits of the Social
Measuring with new rulers
The National Development Plan (NDP) is not a perfect blueprint for success, but it has some things right. First, GDP does not feature in the two key objectives, which are to eliminate income poverty and reduce inequality. Even among the
Protection Index and Adrian Saville points out the distinction between economic growth and economic development. Until we learn to think and see differently, however, we will still prick up our ears at news of a point-something percentage change to the projected economic growth rate, rather than asking shrewd, but difficult questions about how the people of our nation are really doing.
2 An Absa Investment publication
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