SA weathered the recession - Motlanthe

Wednesday, March 31, 2010

Pretoria - South Africa has come through the recession reasonably unscathed, says Deputy President Kgalema Motlanthe.

"We have come through the sharpest recession in many decades with all our institutions intact," Motlanthe told delegates at an economics conference in Johannesburg on Tuesday.

"We did not escape damage many thousands of families are still suffering the effects of the recession. But we can offer them real hope because we know that our basic economic institutions are sound and strong, and ready to move forward with confidence," he said.

This after the economy crawled out of its first recession in 17 years in the third quarter of last year. The deputy president said South Africa, unlike other countries, did not have unmanageable excesses of credit and neither did it overindulge in international borrowing.

"We did not have a debt crisis and we did not have a banking crisis," he added.
Motlanthe however said the crisis exposed weaknesses in South Africa in that more jobs were lost at a faster pace than what was expected.

"Certainly, the crisis exposed some weaknesses in South Africa: we lost many more jobs and faster than we expected; we did not have in place enough mechanisms to counteract the impact of the fall in demand on our companies; and we understood better than ever that an employment boom must be built on a more diverse economy," he said.

He said an economy which merely exports raw materials and provides services to local consumers is not diverse enough to underwrite long term growth and insulation from crises.