Page 31 - IRMSA Risk Report 2023

DERESH LAWANGEE

Simultaneously, the local economy and society still suffer a legacy of problems that require
ongoing attention. Professor Mohale, laments: “A risk we need to own is our inability,
our unwillingness, our lack of know-how to implement structural economic reforms. South
Africa now holds the world records for all the wrong reasons. We are the world’s most
unequal society, taken over from Brazil with the Gini coefficient of ,63. We now have the
highest unemployment rate in the world, with an expanded definition – we’re talking about
almost 40%. We have the highest SME failure rate in the world and the highest gender-
based violence rate in the world. We are second only to Russia in terms of suicide.”

Palm reinforces this point, while demonstrating the interdependence of various drivers:
“The key trends that we need to address are energy security, poverty and inequality. We
need to look at job creation, particularly for the unemployed youth. We also need to
look at the environment, with Eskom arguably South Africa’s biggest polluter. One must
consider the 297-billion litres of water that we consume every year in an arid country, just
to produce electricitty. There’s the very high likelihood of a mega-drought hitting South
Africa, impacting on the Vaal River system over the next 5 to 10 years. This considered, I
think we need to start worrying about the environment, in particular the resilience of the
South African environment to climate change. We need to do what is necessary to make
that work.”

Mohale continues this point: “One problem… is the high levels of unemployment, so that
our people can have their self-respect and, indeed, their self-worth. We need to take this
notion of education seriously. We have an injection of about 380,000 young graduates that
enter the job market, often with inappropriate skills. If we don’t address this, my submission
is that the two weeks in July of a failed insurrection is going to happen again and again and
again… because, at the heart of it, is the infrastructure collapse.”

Deresh Lawangee, Chief Executive Officer of Rise Investments, raises a specific concern
around pension funds. He suggests that the National Treasury is increasingly looking at the
retirement-fund industry to solve funding and address infrastructure problems.

“Do we use pension-fund assets to compensate for government failings?” he asks. “Is it the
patriotic thing to do, and how do we do that in a very low or even no-trust environment?”

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