The Covid-era grants in developed nations have enriched their citizens at the expense of the people of poorer nations
Populist monetary policies allow the fortunate recipients of new money to front-run the rest of the global marketAnnual consumer inflation reached 7% in February. This is likely to increase when Eskom’s controversial 12.74% price increase is applied in April and trickles down into a cost-of-everything price increase for citizens.
The reasons for SA’s well-publicised economic malaise are well documented. The country’s self-inflicted economic wounds have been written about at length. They include own-goals such as Tourism SA’s widely condemned leaked plans to sign on to a billion-rand sponsorship deal with Tottenham Hotspur at a time when service delivery for citizens is falling apart at every level.
Populist monetary policies sold as progressive measures in their domestic markets can and do have regressive consequences for the citizens of foreign markets, particularly those living in weak and developing economies in the global South. In particular here we can look to the global price effects of record-breaking Covid-era quantitative easing and other similar loose monetary policy choices. Money, being fungible, is wont to find its way into global markets.
A good example here can be seen in the increases in foreign purchases of SA real estate, which increased dramatically, both in terms of volume and value . This pattern reduces supply and increases domestic rentals, pricing local citizens out of the property market in a nation where 13.9% of households are still living in informal dwellings.
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