The value of a country’s currency tells what the rest the world thinks of it. Therefore, according to the ever-increasing number of rands you can get for a US dollar, the rest of the world doesn’t think much of us. However, there is a faint glimmer of hope that the rest of the world will start taking a more positive view of us in the very near future.
Last week’s news carrying shots of expatriates casting their votes overseas that reminded me of a similar queue Ben and I was part of, 20-years ago in Amsterdam, when the exchange rate was around $1/R3,6. Then we knew that change was inevitable; now many voters are beseeching change.
Happy with the results of that first election, full of enthusiasm for the future of South Africa, Ben and I returned the following year. Then the road contained plenty of potholes but many people were optimistic about the future and enthusiastic about the change. Now, rather than having been filled, the potholes have multiplied, pessimism abounds and the vital call for change falls of deaf ears.
South Africa is falling behind much of the rest of the world’s technological progress and the slow service delivery continues. But, as the future of any country rests with its children, and many of our children are robbed of decent educations by poorly run, poorly policed, poorly administered education system, there seems no end in sight. How can Eskom and the like deliver essential services if its workforce lacks the necessary basic skills? Teaching used to be a vocation, what has changed?
Presently we are watching our long-time economic mainstay, mining, crumble before our eyes. As the rest of the world swiftly moves out of a long recession, so needing the kind of raw materials we produce, the infighting continues allowing our rivals gleefully to take over this erstwhile lucrative industry.
Since that first election two major crashes, have contributed to the rand’s 190% loss against the dollar. But, it is the 59% loss over the past three years that reveals the world’s current opinion of us. In May 2011, after three years of gain, the rand changed direction. Since then, as blow after blow struck our country, our currency has slithered. However, the blows hitting us from outside, in particular the downgrading by the rating agencies, were less severe than the blows administered from within.
Raising their hands in horror at Nkandla and the like, thinking South Africans have long lists of justifiable gripes, which set me searching for something to salve our hurts. For we investors there is new stock market high, and for the rest I perceive a faint glimmer of hope for the rand.