Opinion

What South Africa Must Do

Nouriel Roubini

By Nouriel Roubini

By Nouriel Roubini

South Africa is at a crossroads. To save its democratic project, it needs to put itself on a path to inclusive, dynamic growth, creating a virtuous cycle that delivers on Nelson Mandela’s promise of “a better life for all.”

For the past decade, the country has been locked in a low-growth trap, with falling per capita income, rising inequality, and skyrocketing unemployment, which is now at a record-high 34%. In a world beset by economic vulnerabilities, South Africa still manages to stand out for its poor performance and racially skewed outcomes – a tragic legacy of centuries of colonialism and apartheid.

The combination of low growth, high unemployment, large deficits and debt ratios, and a lack of effective structural reforms has created an unstable disequilibrium. After being skillfully managed by Mandela and then by Thabo Mbeki, the country was torn asunder by Jacob Zuma’s decade-long reign of state capture and corruption. Zuma’s successor, Cyril Ramaphosa, is now trying to turn things around, but the challenge is enormous.

Read the full Project Syndicate article.

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Nouriel Roubini is a Professor Emeritus of Economics and International Business and the Robert Stansky Research Faculty Fellow.