Johannes Wessels
@johannesEOSA1
Just as a heavy punch on the side of a boxer’s head can disrupt his brain’s neurovascular coupling processes causing him to fall like a log, the lockdown blow had disrupted the intricate flow of funds in the economy. BankServAfrica’s figures for Black Friday confirmed consumers are still on the canvas: turnover declined by a whopping 52% and there was a 30% decline in the number of in-store card transactions.
The pockets of the majority of individuals and a substantial share of businesses now resemble those of the state-owned enterprises.
People are hesitant to spend with unemployment dramatically higher than before lockdown, due to the government turning off the income tap for most enterprises for at least 3 months, declaring them non-essential (in the case of the hospitality sector almost 8 months). The government has thus achieved not only the lengthening of the jobless queues but also driving the rest of the population closer to poverty.
It was a cruel knock-out blow by the government
The religion of the developmental saviour
The subconscious neurovascular coupling process ensures oxygen supply in nano-seconds through blood flow to the brain segments most active at that split second. A boxer can recover from a knock-out if there was no rupture of arteries and quick restoration of normal flow of blood in the brain. If not, there can be permanent brain damage, even death.
Our thought processes depend on continuous uninterrupted subconscious processes. Likewise, an economy depends on the continuous uninterrupted flow of funds that is totally unregulated in the sense that no entity controls or directs the trillions of individual transactions by billions of consumers (both individuals and enterprises) buying their daily requirements and selling their products and services, either worldwide, or at a lower scale in different countries.
The Bleak Friday data indicates the government’s lockdown punch caused chronically reduced demand.
Continue reading “Elastoplast for the knocked-out economy”
Because of high unemployment and poverty levels, all South African municipalities have been tasked to promote local economic development (LED) as part of their integrated development plans (IDPs). Various central and provincial government departments, organizations such as SALGA as well as consultants provide LED guidance and support to the municipalities. And academics do research on LED and small towns in South Africa and publish their results in scientific journals. Yet, given the above, there is an aspect that really puzzles us.
Orderliness in enterprise development in South African towns has been observed as statistically significant correlations between different characteristics of South African towns. One of the first correlations noted was a statistically significant positive relationship between the population of South African towns and the number of their enterprises. This was observed in the Free State, the Northern Cape, the Western Cape (see graph) and the Gouritz Cluster Biosphere Reserve. In fact, towns in the Eastern Cape Karoo exhibited such relationships over a period of a century. One can conclude the relationship is ubiquitous in South Africa. 
EOSA 