SA has to compare itself with ‘like’ nations to understand its place in the world. When it comes to the economy, many South Africans seem to have a warped measure of where the country fits in among other nations and needs to keep in mind South Africa is now an African nation.
There is an old tendency to think of good old SA as a lesser cousin of Australia, New Zealand and Canada. We might share a common language and an affinity for rugby and cricket, but we are not in their league anymore when it comes to the scale of their economies.
When measured by size, Australia’s GDP is about 3.7 times larger than SA’s and Canada’s is 4.7 times bigger. Although New Zealand’s GDP is only about 58% the size of SA’s, it only has a population of about five million, making it about 10.6 times smaller.
This means the average New Zealander is about seven times more well off than the average South African.
Australia and Canada’s populations are also not that large compared to SA’s almost 58 million, coming in at 25 million and 37.4 million respectively.
So if Australia, New Zealand and Canada are not economic kin, which countries are?
A major emerging economy?
Those who think we are among equals in the BRICs group of major emerging economies (Brazil, Russia, India, China and South Africa) are also wrong. For that very reason BRICs is written with a small letter “s” for South Africa. It has been included more for politically correct reasons and access to Africa.
Brazil’s economy is 5.8 larger than SA’s, India’s is 7.5 times bigger and Russia is 4.5 times the size.
For its part, China generates the total output of the SA economy every 10.4 days.
Nor does SA match up to its fellow BRICs members in terms of population size. Our 58 million is way smaller than Brazil’s 211 million, Russian’s 146 million, India’s 1.36 billion and China’s 1.43 billion.
So who are SA’s peers?
The World Bank answers the question of who SA’s peers are, in part, by grouping countries according to income – low, lower-middle, upper-middle and high, based on gross national income (GNI) per capita in US dollars – and taking population size into account.
But even ranked in such a way, it parcels together countries that seemingly have little in common. SA, for instance, is in the upper-middle income group, which also consists of Turkey and Fiji. Although these countries have a GNI per capita of $4 126 to $12 735, there is a 82.5 million difference in the size of their populations.
A closer look at the upper-middle income group shows there are a few countries – Thailand, Colombia and Argentina – that share some similarities when it comes to population size, GNI per capita and total GDP in US terms.
|Population||57.7 million||69.4 million||49.6 million||44.4 million|
|GDP in US dollars||$368 billion||$504 billion||$330 billion||$518 billion|
|GNI per capita||$5 750||$6 610||$6 190||$12 370|
|Annual GDP growth||0.8%||4.1%||2.7%||-2.5%|
Source: World Bank
But even in this group, SA is a laggard.
Its total GDP is higher than Colombia’s, but the South American country is growing at a much slower rate. Argentina’s economy has gone backwards but its total GDP is larger than SA’s. Thailand outperforms SA in GDP growth, size of economy, and income inequality.
But these numbers don’t tell the whole story.
These nations all have an industrial base, but also have a sizeable number of poor people.
In Argentina, the number of people who cannot afford to pay for their basic needs stands at 15.8 million, according to its National Institute of Statistics and Census.
Colombia’s National Administrative Department of Statistics says that about 9.7 million people live in poverty but about 15 million people “feel” poor.
Thailand’s National Economic and Social Development Council says there are about 7.87 million Thais living below the poverty line.
In SA, the number of those living in poverty is considerably higher – 23 million people, according to Statistics SA.
This means these four newly industrialised countries are trying to figure out the next phase in their development while dealing with poverty levels ranging from Thailand’s 11.7% to South Africa’s 40%.
Read: Employed but still poor
Those controlling the levers of power in these counties are trying to reduce poverty by fostering growth in their respective economies. So far, this strategy has proven to be a work in progress as economic growth has shown itself not be the silver bullet that can eliminate all social ills.
Read: Addressing deep-rooted challenges urgently
Colombia, for instance, has a growing economy but this has not prevented widespread protests calling for an end to economic inequality and corruption.
There is a similar story in Thailand, where, despite a robust economy and success in bringing down poverty, decades-long political standoffs have also led to widespread protests.
Argentina, for its part, has for over a century been on the cusp of becoming a developed country. It has, however, just re-elected the party that created the economic mess it is currently in.
We are not alone
As South Africans we tend to think our problems are unique. That we are alone in dealing with an inept government, chronic civil disorder, a standoff between the haves and the have-nots, and seemingly endemic poverty.
We are not. The countries most like us are going through similar challenges.
The lesson we can draw from how they are dealing with their transformations is that there are no easy offramps to success – and that even a growing economy will not resolve the visceral social issues we are dealing with