According to Harvard University professor Ricardo Hausmann, South Africa's dire economic situation is ultimately due to one key factor: a lack of electricity.
Hausmann, who advises the South African government and has studied the country for 20 years, said the nearly two-decade blackout has been exacerbated by the government's inability to make decisions and its adherence to a hidden ideology, and that once-promising He said it had hollowed out the economy. .
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While hollowing out industry is a global phenomenon, “the speed at which this is happening in South Africa is orders of magnitude worse than anywhere else since the global financial crisis in 2008,” he said in an interview with the Johannesburg-based Development Center. said. and Enterprise, the transcript of which was released on Monday. “We found very strong evidence that this decline is strongly associated with the collapse of electricity supply.”
Hausman, director of the Growth Institute at Harvard University, paints a picture of a country facing a self-inflicted problem of gradual impoverishment of its people. He said the government has not been punished for slow decision-making because one party has a majority and the collapse of state services has little political impact. He added that the ideological view that the state should lead the economy also hinders realism.
“No matter which economic indicator you pick, South Africa's performance has been abysmal,” Hausmann said.
His observations are backed up by the government's own data: Africa's most industrialized economy has grown by less than 2% a year over the past decade, with unemployment hovering around 32%.
The country has been plagued by rolling blackouts since 2008 because the state power company has not maintained power plants properly and invested insufficiently in new equipment. While Chile and Colombia emerged relatively quickly from their power crises, it took until 2022 for South Africa to allow private investment in power generation and allow local governments to purchase electricity directly.
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Hausmann cited a number of other obstacles to economic growth, including poor commuter transportation, corruption and an aversion to importing foreign skills.
“South Africa cannot prevent the exodus of talent, but it is preventing talent from coming in from other parts of the world, and this is at great cost,” he said. , added that they had been raising this concern for a long time. 2004. “It was impossible to change.”
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