The Economy of South Africa 

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> china has a gini coefficient of 0.47 > shows 0.26

Discussing South Africa’s problems without mentioning mismanagement, incompetence and corruption is ridiculous!

As a South African I believe our politics, economic policies and corruption play a big role in keeping most South Africans back. The government has failed us deeply in attracting investment and improving education.

So full disclosure, I am part of the 2% you speak of and live in South Africa. I agree that the apartheid hangover is still knocking us between the eyes. Problem is, under every imaginable metric the poor has become poorer since the end of apartheid. They have worse education and healthcare, rural infrastructure is crumbling and have almost no employable skill. The government is wrecked by corruption and infighting, they inherited an unequal society with fantastic public industries. Over the last 26 years they have pushed all of these to the brink of bankruptcy. Our current leaders are doing all they can to make a bad situation into a very bad situation. And that is our real problem in 2020.

South africa reminds me of someone with great potential but once he wakes up, he remembers how comfortable his bed is and then he puts his alert on snooze 5 minutes more.

Next: Economy of Greece A black screen for ten minutes.

Economy of Brazil ... the sleeping giant that never wakes up

No joke, when I was at university one of the first questions Computer Science students would ask each other was "So where are you moving when you graduate?" Generally Canada, New Zealand, Australia and the UK. You can't blame them for wanting to seek a safer life.

I am a South African and a few days ago my mom's phone got stolen, her car also got hijacked many years ago and we are in Johannesburg, so u are right that the crime rates are high in South Africa.

I was literally nodding along to everything he said, this place has so much potential, we're like Africa's Brazil, but our leaders let us down smh.

"This is South Africa" *Shows South Africa*

“This is South Africa” *shows Wakanda*

"The income gini coefficient of China is 0.47" *Shows a penguin eating caviar

Bro why is everyone clownin on him for making mistakes? He is killing it with the videos. Small mistakes here and there are fine you are doing better than 1000 people news companies.

i was born and raised in rural south africa, our education system is honestly amongst the worst out there. my school had no library, no science laboratory, no sports fields at all, literally all we had was just classrooms, am part of the few lucky stories though coz i managed to acquire straight A's and pursue a career as a medical doctor. our institutions of higher learning are definitely better than average but our public school system is simply bullocks. not to mention the rampant corruption, even i myself am planning on leaving South africa within the next 5 years. the crime is just too much, i have been mugged roughly 6 times in my lifetime and am only 25.

There is also the issue that your middle and upper classes are getting fed up watching their tax money be squandered. Billions go missing or are part of "irregular expenditures" as the government calls it. The parastatal companies bleed money and are constantly being bailed out to the tune of billions by the taxpayer. We have a power provider that has a legal monopoly that spent years ignoring infrastructure maintenance while awarding performance bonuses and golden handshakes for tens of millions, so now we have rolling blackouts. Corruption infects every level of government, with nepotism and chronyism helping people get tenders that never see any actual results but the money has vanished. We see these things every day and eventually get fed up with it and decide that things would be better elsewhere. It all adds into the stories on the news about 5 people being killed in a shooting, girl kidnapped, 60 thousand rand spent on KFC at a conference etc. Why stay when your hard-earned money is being thrown into the pocket of corrupt people?

"THIS is South Africa" *shows Iran*

"China has a gini coefficient of 0.47" Shows Turkey

I never knew South Africa was so beautiful, greenery sliding off of humble mountains, pristine blue waters of the ocean, smooth roads winding up the hills. It's really incredibly beautiful.

"This is Germany" Shows Poland Wait a sec... *Blitzkrieg Intensifies*

"This is South Africa." *Shows Mars*

“To move into a more technical profession” *Shows someone building Ikea furniture* (9:51)

Being a South African, I can say that the country is beautiful, but the government is definitely corrupt.

As a South African, to hear inequality talked about without bringing up race is brilliant. Good video.

I was gonna say the crime isn't that bad but then it hit me that I live in a gated community with armed security guards that patrol 24/7 💀

"This is South Africa." -1:22 that is Nairobi you just showed.

''This is Finland'' *shows Estonia*

Finally someone who understands the South African economy ! As a South African, I've been dreading this

This really breaks my heart, im a South African and this really breaks my heart and its true😢😢

He forgot to mention that the SA Government put 500% Import Tax on Grain, therefore affecting the entire price of basic food stuff for the Poor, this is just the beginning

I listen to a lot of politics, economic videos, and try my best to seek out how people view the world and its intricacies. I have to say - your channel is one of the best I've seen for predicting what people think your biases are when presenting this type of data, acknowledging them in a rational way, and doing your best to promote a neutral view. I really appreciate how much effort you put into these videos and I laud you on how well the end product always is!

Inequality has not changed since 1994, even though the ANC (current ruling party) has been in power for about 26 years. All the state owned enterprises are failing now. How the country is being run was not discussed in the video...

The ANC care about the poor. Every 4 years they give the poor a sandwich and the poor, in turn vote ANC.

When you read the title and think ooo, that sound interesting. Click the video and the RU-vidr says 'this is South Africa' but you're from South Africa O_o

This is a very fair review of South Africa. And it's based on sound economic theory. In my country of South Africa, all economics is high politicized and that's probably why proper policies and execution can't be devised and acted upon. Thank you for the knowledge.

The neighborhood segregation thing was so relatable, because I also lived in a gated-luxury neighborhood with armed guards, while I could see shacks on the rising slopes while everything outside wasn't safe (btw it was a third-world country)

Do a video on the Cuban economy!

3:05, that's Tallinn, Estonia, not Finland. But I will forgive you that 80km mistake. :)

i feel like what you said is completely true, especially considering the recent rioting and looting, as well as considering myself one of the “upper- middle class” i see my peers and friends leaving the country constantly, as well as more and more people moving into gated, restrictive, “safer” environments, what annoys me is the root of these problems is the high corruption rate and misuse of tax money.

As a South African, I can safely say you did great with this video. Very insightful.

Where all my South Africans at?

I like how you start by building us up with rosy info Right before that kick in the nuts.

"Western countries like North America and Europe"

I have a few plausible reasons why half of South Africa lives in extreme poverty. As a South African myself I have a good insight to this issue so take this seriously and do your own research. 1. The government keeps on making empty promises to those living in poverty and those in poverty keeps on voting for the same party. 2. Since the end of Apartheid, the new government has made no to little effort to build new infrastructure like schools, hospitals and universities/colleges to support the entire nation. Infrastructure under Apartheid was build only for white people and after it ended no real improvement has being made. 3. The government is very corrupt and is basically selling South Africa out to the Chinese. The in competency of the government to make sound and rational policies as well as just doing basic management is what is actually leading to the country's downfall. Most state companies under Apartheid was well managed and very profitable. Now today they are all failing because of corruption and fraud under the new government who simply can not run a country. 4. Racial tensions are heighten under the government itself. Causing a divide is never good for a country, hence the instability. 5. Education standards are being lowered to the point where you now only need 20% for math to pass. Thus no incentive is provided for students to excell. However, only white children are still performing relatively well because of their culture and their parents telling them to do good so they can go oversees, hence capital and white flight. The majority of job providers are white so this is probably the biggest problem. 6. Literally the food providers of South Africa are being targeted since they are white and own a lot of land. This is going to cause more white flight and a drop in food supply. Therefore killing of the country itself. It also doesn't help that the government does not call this a national emergency and who also states that it is not racially motivated. Except that the majority of farmers are white and that the government want to cease their land. There are other reasons too but I geus this gives somewhat of insight into the issue at hand.

Discussing South Africa's issues without mentioning the government is absurd.

3:18: tells us China has a co efficient of 0.47 0.26: imma stop you right there bud

4:10 thought this was about to be a skillshare ad

As a South African myself I can tell you the contrast is unreal. I grew up in a middle class white household Cape Town after the end of apartheid and the contrast is unreal. My middle income neighbourhood was just down the road from Nyanga, one of the most impoverished and crime heavy places in the world. The combination of inequality is only being furthered by the anti white, left wing ANC who are driving money out the country through their combination of soft on crime and land redistribution. It’s a sad reality for the country I love

Okay, here's what they need to do... - Only allow highly qualified candidates to run for parliament (called a Plato-Democracy). - Vote for individuals based on education, not parties based on their perspective. - Have a finite floating currency where money is only created and erased from existence through public housing. - A separate market for public housing that is protected from property investors. - A person or family may only own one home in the public housing market (but can buy many in the private market). - Limited amount of designs for such buildings in order to reduce costs. - A predetermined amount of plots must be available for purchase in the market at any given time (no shortages of plots). When you want to buy a house, money is created and pays for your home. While it hasn't been paid back, that money is in circulation. Over the next 30 years, you pay back that money (with 0% interest) and the money is destroyed. So this basically means that if everyone pays back their home at once, there should be no money left (what goes into circulation, must eventually go out). There are always new people who buy homes while others finish paying them off. A few other things can happen when you do this... No need for loans or debt. No need for banks. The government can focus on public transport, the education system and health system like they should have been doing. This is more or less how Suiderland works in as few words as possible.

One thing people forget to mention is that, South Africa has a Socialist government that loots state funds, the only reason why South Africa has a functioning economy is because of the private sector (Capitalistic). Majority of the population is dependent on the government while only a few are dependent on the private sector.

"China has a gini coefficient of 0.47" *shows a genie in a bottle*

1:53 "You would be forgiven for thinking that it is actually a pretty average global nation" Did that just say 40% unemployment?!? I wouldn't exactly call that average.

The ecomomy of greece.

As a black South African, it's a relief to find someone not blaming it on race. Wealth is accumulating in one area and our own black government is playing a major role in that, our small towns have little to no water & electricity. While suburban areas are experiencing good quality life

The solutions to fixing SA's problems are pretty simple. 1) Provide quality education for all 2)Provide a business friendly environment. 3)Guarantee property rights. 4)Reduce corruption and incompetence in State departments Unfortunately , the ruling party is riddled with corruption and incompetence , combined with a communist mindset and a racial inferiority complex. A change of government is needed . The power of the current government is slowly waning but there is also a possibility that a new government may be worse than the current one.

SA has been ruled by the ANC for the last 30 years (almost). It hasn't experienced civil war or major civil unrest since the end of apartheid. How could it be considered politically unstable other than its poor economy? At that point it becomes an ontological question. I found the analysis in this video very shallow.

Do Soviet Union, please. It was once an economic superpower.

As a South African I don't need to read the comments to know that this will be a very combustible topic

Number of billionaires depends on the currency you count in. You counted in dollars, SA has significantly more than that when counting in Rands. And considering that those billionaires pay their living expenses in Rands... Dollars is an inappropriate measure

One of the major issues in South Africa is the entrenched high levels of unemployment (around 35%), which make it extremely hard to lift millions out of poverty. To attend to this the State pumps huge amounts of tax revenue into social services such as public schools, hospitals (which are free) as well as an income grant to the unemployed. The problem is that none of these services are of good quality (due to mismanagement and rampant corruption) nor are enough to lift the population out of poverty. Instead, they make millions dependent on the State for their needs. The current ANC government has also failed (intentionally) to make South Africa an attractive place to do business and draw in the foreign capital needed to build businesses and create jobs, which evidently would lower the unemployment rate and lift people out of poverty. South Africa needs the sort of economic policies that have driven the economic boom of South East Asia over the past few decades, but outdated socialist ideologies and croney capitalism remain entrenched in the system by the ANC government, who themselves benefit from the current status quo. The failure of so many State Owned Enterprises and Municipalities, many bankrupt and unable to deliver basic services is a testament to the issue at hand.

0:33 that wave smacked someone way too hard looooool

*I'm south African and I'm not suprised*

As a South African, the key point is the education gap and the failure of government to address this in a progressive manner. Also failure to deliver basic services, and the rampant public sector corruption

Another thing economists miss about South Africa is what I call "false poverty". That is when people can afford to live in a house and pay rates and do everything your typical citizen should, but they don't. They find it cheaper to live in a shack and cry that they are poor. Now you get a shack with dstv dish on the roof and a BMW parked outside. They do have a house in their home province but find it simpler to shack up where they work. They are the first ones to protest for service delivery, but they are also the ones that refuse to pay for services. When they do get a government house built for them, what they do is rent out the house and put up another shack somewhere else and complain again about lack of service delivery. It is all a big scam.

This view is from an objective textbook perspective. More appropriate to petri-dish than a country. And it lacks the perspective of the timeline of what has happened in SA. It is the supposed champions of equality, socialists, who have wrecked the economy. After apartheid ended things were going really very well. Unemployment was falling, the economy growing. SA enjoyed immense support from the international community. Even respect. More and more people included in the economy every year. Then a whole generation of politicians came into power 10 years ago who have been systematically dismantling the economy. The electricity grid and other infrastructure has been sucker punched through neglect and corruption. Anti-growth, and socially divisive policy the order of the day. A program of systematic state capture through crony capitalism among the supposed socialists and external players like the infamous Guptas. The country's external debt rising stratospherically. The public wage bill (having been seen as a way to increase employment) grown to the point where it eats up almost the entire budget along with external debt servicing. The country's sovereign credit rating FUBAR. Even one of our state owned corporations, ESKOM, now has debt equal to about 10% of the country's GDP! And electricity supply is now sporadic to the point where large factories are closing down and foreign businesses leaving the country. Leading to 100s of thousands more jobs being lost every year, and economic growth effectively hard-capped at 1% at best. It is only then that the wealthy started to really leave. And more importantly, not only the wealthy, but also the skilled - From poor to wealthy skilled people have been leaving over the last decade. Because it became clear the country had in short order transitioned from a growing economy to one which, considering population growth vs sub 1% economic growth, was effectively going backwards. In the story of the tortoise and the hare. SA was somewhere in-between 10 years ago. Faster than a tortoise, but more steady than a hare. A very good place to be and things were looking very good for the future. Then it was like the politicians suddenly decided that no... SA is in fact the tortoise and they would grab it by it's shell and try and push it faster than the hare. Obviously an infantile course of action. Whatever SA was 10 years ago is now shredded beyond recognition. Of course it only seems that way. Actually what happened was that a crop of corrupt politicians started eating the country alive during the race. Had the government focused on stable economic growth rather than grand social experiments the communists love so much, and had the state capturers been prevented from gaining power in the first place (cadre deployment being the main enabling mechanism that lead to "state capture"), and had unemployment been steadily decreased (currently at 29% of working age individuals) then SA's GINI number would look more like China's. Probably even better than that. In 2008 our GDP was on a trajectory to grow 2X to 4X over time up to this point. Instead since then the economy has at best segued. See: The lost decade

🇿🇦 🇿🇦 🇿🇦 I'm South African! And a regular viewer of your channel. It's always good to see an outside perspective & take stock of what's going right/wrong compared to other nations. Your research & remarks paint a fair picture of Mzansi (as we call it here). We've always had a lot of potential as a nation and we still do, but a lot needs to be done to make the best of our economic opportunities as a nation. Keep the videos coming 👍🏾

As a South African who has moved to Switzerland, thank you for your video. I like how you explored the different perspectives.

3:18 "0.47" and shows the same as in Finland.

This is definitely true. What shocked me when going oversees and still feels weird to me is how none of the houses have fences. Here if you own a house you have a 3 or 4 meter high wall and an electric fence with surveillance cameras just to avoid break ins. A lower middle-income person living in a high security fortress probably sounds crazy for everyone too, but that's just what you have to do here to live safely. That or live in a gated community which are called estates here, but they are mainly for upper middle-income citizens which earn at least the equalivant of $50 000 or more a year which is a lot here and you basically live the mansion life with that money and you feel truly rich without really being rich. I only really feel safe walking around in these communities, and I would never walk in the CBD of Johannesburg because of crime.

Here in Brazil we have something we call 'bolsa familia' that is a direct transfer policy that pulls anyone bellowpoverty line to just above the poverty line. At first we thought it would be a policy just to mask numbers, but it was actually acknowledged as one of the best social policys in the world. It drastically reduces poverty, increases consumption in the economy and is way more effective than any other policy that claims to help the poor. It is inspired in something an nobel wining economist once said about negative income tax

I think your assessment that this is a rich vs poor story - basically - in the South African context is inaccurate - this is a story of tolerance of mediocrity(generously), coupled with unrealistic idealism. Without doubt we started with a criminal race-based imbalance 25+years ago - however the disastrous implementation of debatable policies by the ruling African National Congress party, combined with their short sighted 'cadre' deployment policy has resulted unskilled people being deployed to positions of considerable power followed by state-scale looting of state resources as well as infrastructural decay due to poor planning and execution at country scale. It is not uncommon for a liberation orientated political movement to faire poorly once transitioning into government as the skills are rarely transferable - yet ironically still maintain relatively large scale support for social grant dependant populace - this is funded by decreasing tax base - as middle/upper class individuals are frustrated by blatant consequence-free incompetence and direct looting. It is indeed the case - that in a democracy - people have to hold politicians to account - or else they get what they voted for, and it is the poor that continue to elect and support the same party that is ironically perceived to have liberated them - but is actually now ensnaring them. It may take a generation that has no emotionally attachment - yet continues to experience hardship and lack of promised progress to change the course - that is however very risky and fraught with short sighted populism. In the end people choose to stay in South Africa because of the huge potential given appropriate political leadership - infra structurally it is the most developed country, with modern financial systems and incentives for business creation - as well as a huge (by heavily politicised ) labour market. What is needed is principled leadership, rooted in accountability and consequence. There are green shoots in the Zondo commission unearthing the scale of malfeasance - and hopefully leading to prosecutions - but the road is long and fundamentally it's people at election time that must make different choices.

6:25 FACTS DOESN'T CARE ABOUT YOUR FEELINGS

You should do a video about what the economics of the CANZUK union would look like. In case ur unaware its a potential trade union between Canada, UK Australia and New Zealand. I think its really interesting and the best option for the UK after Brexit hits.

The problem is not a lack of opportunity, it's a lack of knowing how to make use of opportunities. A lot of people here still have fragments of a mindset that was passed on from pre-colonial times: when people lived in tribes and the thinking was left to the chief, you just followed orders. That isn't how capitalism works. To be clear: it's not about race, it's about culture. Culture can change.

One thing that was not said, and I think is worth pointing out, is that South Africa is very low on the economic freedom index. Lack of freedom is a factor in continued poverty.

This video encouraged me to learn more about economics.

@2:06, should have been "...But this all changes when the thieving ANC government is mentioned".

AS a South African, you are dead on with 99% of your points. well done very good and acurate video

Botswana is landlocked and has virtually no resources compared to South Africa, yet they have low crime and corruption, have enjoyed long term steady economic growth, and exhibited a high degree of political stability. What is the key to their success? All government positions are awarded by merit, not by a person's race, gender, religion or tribal affiliation. In South Africa, merit is the last thing considered.

I live in Durban , a few weeks back we dealt with an insurrection , violent protests and looting . I saw a lot of dead bodies on the road man .

Mistake on that Gini coefficient of China shown on screen at 3:15

3:17 is this a meme or did you actually made the mistake again :D

This comment section is too light for me to react to this film. I just wonder what you (an economist) would say about the utter rot exposed during the curr ent epidemic scenario. A rot which many people with some common sense has been warning about for at least the past decade. That fancy index of yours has been driven by blatant theft of tax payers' money and too the point where whole SOEs have been ground tdown to practical nothing. Every year our taxes are raised to "address social inequalities", but that divide just grows and grows. No sir, you are not painting a full picture here.

South Africa has 55 Million People, 15 Million People on Social Grants, and 3 Million active tax payers... you are correct, its very unequal. oh and 15 million people vote ANC...

South African here. It doesn't help that our scaling tax rates go up to 45%. What rich guy in his right mind would want to hand over almost half of his taxable income? This also makes me wonder why so many rich people choose to stay in countries like the US too.

Wealth is not distributed, it is created from energy altered into something useful....

"Why live in a fortress fearing for your life when you can live in a fully developed country?" - Every corrupt politician agrees

Almost all of my wealthier family have left already. I'm studying at university right now and I will for sure be of able to leave if I want to. I feel so bad. I keep asking myself whether my life, my wife and my kids matter more to me than my countrymen.

1. South Africa is a home of speaking more than 20 languages. Communication is issues but luckily Mandela make 11 language official, which remove the potential of direct conflict over the language. 2. Mandela has not idea of economy. He fell right into neo-liberalism economic trap. Free market economy will not never work in the wrong time. East Germany economy after unification already prove that. 3. There is no way South Africa are able to compete with China, India over trickle down economy, time is change. A manufacturing economy just wouldn't work, nor will the services industries will fix the labor market. IMHO, the most feasible way for SA to get out of the "employment slump", is socially provide basic living facilities and provide public job (clean street, rubbish separation, survey job , food services etc) for at least 50% of all unemployed citizen. In fact, USA is creating similar stuff which called "military job".

@economics explained If there is capital flight from SA, don't you think that over time even upper-middle citizens wont be able to move to prime European (Southern England, Swizerland, Northern Europe) or the US location over time? Assuming that their main source of net worth is property and pension funds tied to South Africa their wealth drops along with South Arican economy (even if you have a nice. Villa in gated community you need to sell it to someone who is willing to move to SA, otherwise you have only unsellable wealth on paper)

EE: However, this all starts to fall apart when we look at this one little figure... Me, folding laundry on the other side of the room, not looking at the video: is it the GINI coefficient perchance? The one where a score of 0 means everyone has exactly the same and 1 means one person owns absolutely everything, which can be used as a measurement of both wealth and income? just a wild stab in the dark

“This is South Africa” Shows North Africa

»My lifestyle, determines my death style!« - Metllica

The first thing to do in South Africa would be to stop the rot in government. The amount of money that has been looted from the economy by state capture and other scandals is obscene. The people of South Africa need to demand more from their leaders. Stop falling for the identity politics lies and reform your government through the democratic paths you are lucky to have.

The problem with our country is that when apartheid ended, policies were put in place to uplift the previously disadvantaged population. Absolutely nothing wrong with that, how it was put in motion is a disgrace though. The government, majority being part of the previously disadvantaged population, used their power to only uplift themselves and the people in their 'good graces". The policies they put in place was to enrich themselves and not the general population. They increased taxes to improve infrastructure, but awarded tenders to their business associates regardless if they could do the job. lots of other instances like this in all economic sectors.

South Africa could've been developed by now, it's been 25 years since the end of aparthide and many people could have been middle class by this time, but the government went down the corrupt route instead, the country still has potential but it needs to be used ASAP.

The South African model is basically the future of western Europe

You missed the biggest risk to the economy currently i.e. Eskom and downgrades. As a South African who follows current affairs, those two topics always pop up.

This is basically the same problem you see in most of Latin America and to some degree also in the USA. It is largely due to the legacy and consequences left over from colonialism, slavery and appartheid. The only way to reverse this is to implement several decades worth of income and wealth redistribution through the implementation of a nordic model. The main problem with implementing this however is overcoming the racism and classism of rich wealthy white people not wanting to pay more taxes to help poor black and brown people.