South Africa’s junk credit rating was avoided, but at the cost of junk analysis

Published on ZNet, by Patrick Bond, Dec 8, 2016.

Standard&Poors (S&P) gave South Africa a fearful few hours of anticipation last Friday, just after dust from the political windstorm of the prior week settled. The agency downgraded the government’s securities that are denominated in the local currency (the rand) although refrained from the feared junk status on international securities. It was a moment for the ruling business and political party elites’ introspection, but in heaving a sigh of relief they are not looking far enough … //

… Again rated just shy of junk: … //

… This week the main question to ponder is why, given utterly zany politics and the stagnant economy, was South Africa not downgraded all the way to junk? S&P lowered the risk rating of local state securities, but not the sovereign (foreign) debt grade. The main reasons S&P gave are telling:

“the ratings on South Africa reflect our view of the country’s large and active local currency fixed-income market, as well as the authorities’ commitment to gradual fiscal consolidation. We also note that South Africa’s institutions, such as the judiciary, remain strong while the South Africa Reserve Bank (SARB) maintains an independent monetary policy.”


  • “the country’s large and active local currency fixed-income market” = pension and insurance funds keep buying government bonds because residual exchange controls force 75% of such funds to stay inside SA and create a large artificial demand for state securities;
  • “the authorities’ commitment to gradual fiscal consolidation” = Gordhan promised that the budget deficit will fall from this year’s 3.4% to 2.5% by 2019, even though this requires cuts into the very marrow of already tokenistic social grants. It will result in recent increases for 17 million recipients falling below the inflation rate faced by poor people;
  • “South Africa’s institutions, such as the judiciary, remain strong” = not only do the courts regularly smack down Zuma’s excesses, but more importantly they also religiously uphold property rights, which in South Africa are ranked 24th most secure out of 140 countries surveyed by the Davos-based World Economic Forum; and
  • “the SARB maintains an independent monetary policy” = in spite of incredibly high consumer debt loads (nearly half the country’s active borrowers are ‘credit impaired,’ according to the National Credit Regulator, having missed three repayments), the SARB has raised interest rates six times since 2014, to levels amongst the world’s highest.

Another reason S&P is optimistic is supposedly that “The trade deficit is declining on the lower price of oil (which constitutes about one-fifth of South Africa’s imports),” but in reality, the trade deficit just exploded. South Africa had a $1.4 billion trade surplus in May, but this became to a $330 million deficit in October. Meanwhile over the past month, the oil price soared 21%, from $43 to $52 per barrel, and last Friday, OPEC’s latest collusion to cut output aims to push it past $60 in coming weeks. (And the stronger rand witnessed over the course of 2016 did not offset that rise: over the last month, the rand fell from 13.2/$ to 13.8/$; its last peak was R6.3/$ five years ago.)

Revealing silences: … //

… It still strikes me that like the Gupta and (Stellenbosch-based Afrikaner tycoon) Rupert families, the three ratings agencies will continue attracting the accusation of “state capture!” insofar as the public policy this neoliberal foreign family dictates is also characterised by short-term self-interest, occasional serious oversights and national economic self-destruction. The only reasonable solution is progressive delinking from the circuits of world finance through which these agencies accumulate their unjustified power.

(full text).

(Patrick Bond teaches political economy and political ecology at the University of the Witwatersrand, Wits School of Governance:


Obama grants waiver for military support of foreign fighters in Syria – White House (VIDEO. 3.31 min), on RT, Dec 8, 2016;

2017 NDAA (National Defense Authorization Act) ups aid to Ukraine, gives arms to Syrian rebels & lets Trump sanction the world, on RT, Dec 8, 2016;

Economic Update: Economics of Women Voting Trump, 55.04 min, uploaded by Democracy At Work, Dec 8, 2016;

Why is a banned pesticide that harms bees actually being used more? on The Guardian, by Patrick Barkham, Dec 5, 2016: Goulson says: the “plausible deniability” he encounters from neonicotinoid makers is rather similar to what the tobacco industry did for 50 years; (with a Video: Bumblebees Their Ecology and Conservation, 59.26 min; also on YouTube;

  • (explanations on en.wikipedia): Plausible deniability is the ability for persons (typically senior officials in a formal or informal chain of command) to deny knowledge of or responsibility for any damnable actions committed by others (usually subordinates in an organizational hierarchy) because of a lack of evidence that can confirm their participation, even if they were personally involved in or at least willfully ignorant of the actions. In the case that illegal or otherwise disreputable and unpopular activities become public, high-ranking officials may deny any awareness of such act in order to insulate themselves and shift blame onto the agents who carried out the acts, confident that their doubters will be unable to prove otherwise … (full text);

We must choose between Assad and Islamists in Syria – Marion Le Pen, on RT, Dec 2, 2016;

… et encore ceci – concernant notre santé:

Thyroïdine, la substance interdite (en France) qui régule les hormones, dans INTERET POUR TOUS, par Sananda, le 8 déc 2016; aussi: dans le NEWSLETTRE de l’Institut pour la Protection de la Santé Naturelle IPSN, par Augustin de Livois, le 8 déc 2016); et encore dans Google Web-search. D’autres activités:

  • La THMPD: L’Institut pour la Protection de la Santé Naturelle a lancé le 16 mars dernier une pétition contre la directive 24/2004/CE (ou THMPD). Plus d’1,4 million de citoyens européens ont signé ce texte en France, en Belgique, en Allemagne au Royaume Uni et en Espagne. Une autre pétition reprise par Avaaz a réuni quant à elle plus de 850 000 signatures dans toute l’Europe. L’ampleur de la mobilisation témoigne de l’attachement des citoyens européens à un de leurs droits les plus fondamentaux : la liberté de choisir leur médecine …;
  • Actions - Périmètres d’intervention de l’IPSN: entouré d’un comité d’experts tant juridiques que scientifiques et médicaux, l’Institut pour la Protection de la Santé Naturelle concentrera son action autour, notamment, de cinq thèmes: 1) La nutrithérapie : micro-nutrition, moyen préventif et parfois curatif des maladies comme du ralentissement du vieillissement; 2) La phytothérapie : la médication par la plante (vs molécules chimiques); 3) L’endothérapie : la médecine holistique; 4) L’homéopathie et la micro-immunothérapie; 5) Les médecines du monde ayant fait leur preuve …;
  • IPSNaturelle est channel sur YouTube:
  • 1 million de signatures pour la pétition – Conférence IPSN, 7.19 min, mise en ligne par IPSNaturelle;

… and this

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