SA poised to take advantage of global geopolitical shifts
South Africa may be in an economic crisis, exacerbated by load shedding as well as high inflation and interest rates, but it is also well-positioned to take advantage of geopolitical changes globally, in which emerging economies are being considered as an alternative to developed countries facing their own challenges. This observation was made by Prof Peter Baur, UJ Associate Professor: School of Economics, during an online panel discussion hosted by UJ on 18 May, titled ‘South Africa’s Economic Crisis: A law and finance perspective’. Prof Baur provided a financial/ economic perspective while Dr Cayle Lupton, senior lecturer in the Procedural Law Department, provided the legal perspective. “Huge global change is taking place, and there are greater levels of uncertainty. Suddenly countries with more resources become more interesting,” he said. However, a key challenge for South Africa was the declining rates of investment and consumer confidence. “In trying to attract investors, the kind of investor we need is one that creates jobs. The better the investor the more positive the effect (on consumer confidence). And if confidence comes back, then monetary policy will be more effective in solving the problems,” he said. Although interest rate hikes were designed to regulate the economy, excessive hikes are dangerous, he cautioned. “The implications could be dire for the business sector and homeowners. The brakes are already on the economy, with a very high negative impact due to load shedding. We need to be socially sensitive to the people within the economy, so it can expand. Yes, it’s important to have stable inflation, but if everybody is defaulting, we’re not going to have an economy left,” he said. Dr Lupton turned his attention to consumers in the current economy, saying they needed to become more financially savvy. “What are your needs versus your wants? There is not much legislated protection, but if you find yourself in a debt crisis, use mechanisms like a debt counsellor to restructure your financial situation,” he advised. Policies should be formulated to deal with current economic crisis, he added. “Government and the Reserve Bank have a social responsibility to consider consumers when determining credit interest rates and repo rates. I do think the law could afford more protection to consumers, to protect them from debt in particular,” said Dr Lupton. Nkululeko Buthelezi, assistant lecturer in UJ’s Faculty of Law, reminded attendants that in the current economic climate, students should lean into the Alumni Connect network to advance their career goals. “A university qualification alone is not enough to graduate into the professional world. We provide opportunities for graduates to increase their employability, get mentorship and guidance, and expose them to thousands of job opportunities through Alumni Connect network,” he said.
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1. (Left to right): - Associate Professor: School of Economics (UJ) Prof Peter Baur, Senior Manager: Market Risk (Industrial Development Corporation (IDC) Mr Moses Khumalo 2. (Left to right): - Senior Lecturer: Procedural Law Department (UJ) Dr Cayle Lupton, Associate Professor: School of Economics (UJ) Prof Peter Baur, Senior Manager: Market Risk (Industrial Development Corporation (IDC) Mr Moses Khumalo, Lecturer, Faculty of Law (UJ) Mr. Sershiv Reddy and Senior Manager: Faculty Coordination & Alumni (UJ) Mr Nell Ledwaba 3. (Left to right): - Senior Lecturer: Procedural Law Department (UJ) Dr Cayle Lupton, Associate Professor: School of Economics (UJ) Prof Peter Baur
• To watch the full discussion, click here. • Join Alumni Connect here.
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