Emerging South

Paul Van Cotthem, MD of TurnLeaf (check out the weblog to learn more on the great work they are doing for Yuntaa, Nomadesk and others) just send me this excellent article published in the Economical Times Today on the state of the South African economy.Next to the worries the Economical Times has on the economical prospects of South Africa, which I completely share -most of my Emerging South posts on South Africa since early 2007 focus on these problems-, the article in the ET transpirates a very big concern on the leftist move of South Africa after May 2009, when the new (ANC) president will take seat. I have written a lot on my views with regards to Zuma and the state of the ANC. Zuma will opt for the Chavez scenario instead of the Lula scenario and that will be a huge lost opportunity.

As to the South African economy; the tendency is not good at all.However, the biggest problem of South Africa is the absolute naive denial of South Africans to cope with the reality of the situations.  
The typical articles you will read in South Africa read like this one "Will consumers spend South Africa out of trouble"; the interestrate goes down and therefore spending will solve everything.  You will even read articles like this these days: wherePam Golding agent Richard wright states:
“My advice to investors is to stop waiting – you‘ve got about three or four months to purchase properties because by the second half of this year we will see prices rise again,” said Pam Golding agent Richard Wright in Port Elizabeth.
“Anyone who has money in the bank now can afford to negotiate a lot.”

South African real estate prices going up in the second half of 2009?  Keep dreaming. Remember: only 16% of the South African don't have debts, 11% missed at least one downpayment and 33% simply say they are "drowning in debt".  The problem with (South Africans) is that they culturally never learned how to save; these are not my words, anyone will confirm you that South Africans drowned themselves in debt the last decade.  

And when people are drowning in debt, no interest cut will help; this excellent article explains why through a beautiful metaphor.