If it wasn't for the low rates we'd be ****ed
It's more of a reflection of how the budget is spent and how much they DON'T spend on infrastructure that affects it even more. Electricity. Water. Hospitals. Police. Petrol (etolls) etc. I had quite a nice raise this year, but with tax I only get R110 out, and that doesn't even cover how much petrol went up. So I'm actually going backward instead of forward
The Rand is very stable if our economy and growth is stable. But the party animals in government spending money willy-nilly are starting to reap what they sow, and it directly affects millions of people. So when the USD takes a wobble or strengthens, we directly feel it's affects, whereas previously we weren't AS affected. That's why the recession in 2008 didn't have as big an impact as it did worldwide.
You can only milk a dry cow for THAT long before it peels over and dies
Government spending doesn't help, but it's not the biggest problem.
By far, this ****hole's biggest problem is simple: We haven't got anything to offer. We export a few minerals, but the value of those is shockingly low, and everything is in it's raw state. We export no ideas, because government policies chased away our best people. We export a few cars, but those factories are heavily subsidised by tax incentives. We export very little industrial equipment, because government's policies make it unattractive to produce anything here. In short we have nothing to offer.
Even when we look at our stock exchange, which is filled companies with great foreign earnings, we still can't keep the money in the country since those companies have huge foreign shareholders.
And yet "we demund" all the west has to offer. We buy TVs and machines and planes, all produced abroad, and all paid for in forex. Government has convinced the dumb peasants that they all deserve free BMWs and champagne and caviar dinners, even if they're only capable of digging holes or picking millies.
This isn't rocket science, it's basic supply and demand, and what it comes down to is that we live in a banana republic.
It's not going to get any better either. Government's policy of keeping the masses uneducated and loyal to the ANC, means that our economy will never expand or evolve. Without our mineral exports, the country will earn no forex, and those are declining fast. That deficit is coming soon to bite us in the arse.
We're ****ed, with no hope of recovery, just as you'd expect when the majority of the population has an IQ around 75. R 11 to the dollar is just the beginning.
Oh, and also there is much USD strength at the moment. (Because the US produces **** that people want to buy.)
