A steady ship in uncharted waters

There were no real surprises in the budget that finance minister Pravin Gordhan presented to parliament on the 23 February. In fact, it represented continuity to such an extent that some even called it boring.

But, for that we should be grateful.

It says a lot for the way in which the country’s finances, at least at the macro level, are being managed that such a steady ship could be maintained in the uncharted waters created by the great recession and other big international changes presently underway on the global scene.

For this, minister Gordhan and his predecessor, Trevor Manuel and their closest advisors deserve our congratulations.

Boring is to be preferred to maybe falling victim of the old Chinese saying: “If you want to curse a man, you wish him to live in interesting times.”

And, as is also reflected in some of the articles in this edition of Bulletin, there are many factors  at play on the global scene that create plenty of uncertainties, which could yet make for some very interesting times.

For one, on a fundamental structural level, the financial crisis of 2008 has left the market-driven capitalist system under pressure.

On another front there is increasing movement towards a replacement of the dollar-anchored currency system as we got to know its since World War II and it is also unlikely that a shake-up of the world of banks and other financial institutions is quite behind us yet.

On the eve of the budget speech a revolutionary tsunami hit North Africa and the Middle East, the epicentre of the world’s oil supply. The most immediate implications, among others, are the possibility that soaring oil prices could trip up the still stuttering recovery of the global economy and impact negatively on the economies of large emerging nations like China – on which so much hope is pinned to pull and push the world economy into a new growth phase.

At this point it is not possible to predict the full ramifications of the upheavals in that part of the world, but it is clear that few if any corners of the world will be left untouched.

For South Africa for instance it seems certain to bring higher fuel prices in the short to medium term, with the inflationary pressures that will go with that.

It might also impact considerably on geo-political power relationships and stability. In short the world has become quite a bit less predictable than it was a short few weeks ago.

There just might be some real interesting times ahead.

Presenting a prudent, boring budget is one thing, but the real test will lie in  hands-on management in the months ahead as the macro environment seems about to present even more stormy uncharted waters.

Piet Coetzer