[LISTEN] 'We cannot blame the current situation on the global financial crisis'

How bad is the South African economy?

Are we in a dire situation economically?

Statistics SA released the GDP figures and said this is the second drop, following a decrease of 2.6% in the first quarter of the year.

Gross domestic product fell by 0.7% in the second quarter of 2018 placing South African in a technical recession.

Eusebius McKaiser engaged founding director at the Centre for Economic Development and Transformation Duma Gqubule and Director at Political economy Southern Africa Siya Biniza to look at the statistics, why the GDP is dropping and what should be done.

I talk about the last decade that we had as South Africa in terms of economic development. I look at the period from 2009 to 2017 and our economy just grew by 1.6% per year and our GPD per capita by 0.3% per year.

Duma Gqubule, founding director at the Centre for Economic Development and Transformation

In economic terms, that is the equivalent of standing still. That is a desperate situation we are in as a country at this moment.

Duma Gqubule, founding director at the Centre for Economic Development and Transformation

We cannot blame the current situation on the global financial crisis as our politicians want to do. We are the most unequal country in the world.

Duma Gqubule, founding director at the Centre for Economic Development and Transformation

This is time for desperate measures.

Duma Gqubule, founding director at the Centre for Economic Development and Transformation

However, Director at Political economy Southern Africa Siya Biniza says we must not be alarmist about the state of the economy.

What's important is to remember the historical legacy of where we come from and why we are here.

Siya Biniza, Director at Political economy Southern Africa

For me, it's primarily just an issue of inequality that's stuck us where we are.

Siya Biniza, Director at Political economy Southern Africa

In SA we have an overly formalised economy that doesn't allow people to engage in an informal level and at the same time, the formal sector has been caught up in a lot of collusions which is blocking out new entries and creating very high barriers for new entry.

Siya Biniza, Director at Political economy Southern Africa

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