The 2019 elections coincide with an important milestone in South Africa’s history: it is also the 25th anniversary of the country’s first ever democratically-held elections. The country is approaching these elections in the wake of some shocking reports of state corruption and graft reaching to the highest offices of leadership. Continuing high levels of poverty and unemployment, skewed development, lack of progress on transformation and stagnant growth have all dampened enthusiasm for the upcoming polls.
South Africa will hold its sixth elections since its transition to democracy 25 years ago. The elections take on added significance in the corrosive aftermath of nine years under former president Jacob Zuma. This period undermined the embryonic foundations of constitutional rule through a destructive “state capture” project, with widespread systemic corruption, fraud, and abuse of power as the main manifestations.
On the eve of the 25th anniversary of democracy in South Africa, the African National Congress (ANC) still holds power in a nearly hegemonic way. Nevertheless, the popularity of the party is decreasing while economic and social inequalities are deeply entrenched in the country.
The economy is a central issue in South Africa’s 2019 elections. This reflects not only the generally disappointing rate of economic growth since 1994 but also the fact that the economy has grown (slowly) down a growth path that has not been pro-poor.
Real growth in the global economy over the last two years (2017 and 2018) was 3.7% a year, the advanced countries (led by the USA) managing 2.5% and the emerging countries around 5%, buoyed by the excellent (and continuing) performance of the south-east Asian economies, especially China and India. The International Monetary Fund expects a slow-down in 2019; but the question all observers are asking themselves is whether that slowing will take the unpleasant form of a world-wide crisis just as we had almost forgotten the last one.
The upcoming Brazilian elections are unprecedented in several different ways. On the one hand, never before has the country seen the degree of polarization that has come to define this presidential race.
E’ molto probabile che il dollaro rimanga ancora per molti anni la moneta di gran lunga più importante del mondo. I primi due decenni di questo secolo hanno mostrato che il suo ruolo non risente del calo del peso reale dell’economia statunitense. Il Pil degli Usa era più di 1/5 di quello mondiale all’inizio del millennio, oggi si è ridotto attorno al 15%; le esportazioni Usa erano il 14% del commercio mondiale, oggi sono circa il 10%.
In a financially fragile country, it may happen that the government does not share the logic of the financial markets, or the need to have an independent central bank. However, a government cannot afford to act against this logic. Otherwise, it would run the risk of suffering from currency turbulences, as it was the case of the Turkish lira last May.
Some thirty years ago, the American economist Charles Schultze (former chair of the Council of Economic Advisers and director of the Budget Bureau) addressed a question in reference to the U.S. budget deficit in terms of a metaphor: Is it a wolf at the door, a domestic pussycat, or termites in the basement? In retrospect, the question, raised at a time when the ratio of U.S. general government debt to economic output stood at less than 60 per cent, seems rather trivial in the light of a debt ratio nearly twice as high today and rising.
In the past decade, the EU has shown the world its ability to struck ambitious trade deals and to create the conditions for win-win agreements. Today, its trade policy is endangered by the threat of a trade war initiated by the United States, the EU closest ally and main trade partner.
The increased protectionist turn taken by the United States, including steel and aluminium tariffs levied against the EU and other countries and a potential trade war with China, comes at an awkward time for the United Kingdom. While the United Kingdom is negotiating its exit from the European Union, it still remains within the EU and its customs union and so is dependent on the EU to negotiate on its behalf.