The Economist has another article on the South African economy. Although they say things are going well right now, not everything is looking up in the long run.
- Growth has outpaced infrastructural development:
The country’s infrastructure is creaking—roads are overcrowded, cement and refined fuels are having to be imported, and power outages are a growing problem
- They are also concerned about the current-account deficit:
At present the deficit is being funded comparatively easily, but an emerging-markets sell-off—which many analysts believe to be inevitable over the next year—would hit South Africa hard, putting first the rand and then domestic interest rates under pressure.
- The skills deficit is also mentioned as a serious (and worsening) problem. This is especially true in the public sector at all levels.
According to the country’s largest bank, ABSA, managers are battling to cope with “severe shortages of skilled labour and production capacity constraints”
Several factors are mentioned as contributing to the skills shortage but emigration is specifically talked about.
The South African Institute of Race Relations estimates that some 850,000 whites have left the country since 1995, reducing the white population (which, for historical reasons, is still the most skilled segment) to around 4.3m people from more than 5m a decade ago. ABSA believes that “the vast majority” of those who have left the country—or are contemplating doing so—are skilled people between the ages of 20 and 40. This white exodus is being compounded, according to the bank, by the increasing emigration of mixed-race, Asian and black professionals, especially from the public sector, which is losing medical, technical and engineering skills very rapidly.