Chief economist at First National Bank Cees Bruggemans said that the apparent large-scale escalation in emigration intentions among talented professionals and managers is a major threat to the economy, especially when combined with the impact of the electricity crisis.
Along with output losses due to electricity, it could severely strain the spending and output growth outlook over the next few years. Instead of 6%, think 3%, he notes.
"Economic growth comes about through capital formation, labour absorption and technological progress. We are raising our investment-to-GDP-ratio to over 25% by 2010, we enjoy technological progress even when sourced overseas, but our main weakness is limited availability of skilled, educated, talented, experienced people," explains Bruggemans.
He points out that instead of gearing for faster growth, as heralded by every state document, commission and speech, the country seems determined to undermine its growth potential by frightening away its most precious national resource, often by breathtaking "own goals" seemingly played from as far away as midfield (even in soccer a feat equalled by few).
"People from all walks of life are daily deciding to uproot and go elsewhere. That doesn't happen without good reason. Every 30 000 highly skilled individuals who make this step probably reduce South Africa's GDP by 1% or more, starving it of critical support, thereby undermining ongoing employment of double their number," he says.
"And many more than that seem of late to be jumping ship. Wild tales of record car auctions and property market flooding abound. If everybody knows somebody preparing to emigrate, the condition is presumably dire," points out Bruggemans.
"Could it lead to early fiscal and monetary easing? The budget may favour the poor. A June or August rate cut by the South African Reserve Bank is feasible, provided inflation descends as rapidly as expected after the [first quarter of 2008] peaking," concludes Bruggemans.