The Economist notes that Brazil’s economy grew by a better-than-expected 0.6% in the three months to the end of September, but that unemployment remains high … at 11.6%.

The brief report on Brazil says the South American country is still recovering from a severe recession in 2015-16, its worst since the 1930s, and that economists expect growth for the year to be stuck at around 1%.

Immediately below that piece The Economist records that, in contrast, South Africa’s economy contracted in the third quarter, with GDP falling by an annualised rate of 0.6% in the three months to the end of September. Economists had expected growth of 0.1%. It highlights delays in the reorganisation of near-bankrupt state-owned companies and infighting within the government as factors that have sapped business confidence in Africa’s second-biggest economy.

The Economist doesn’t mention South Africa’s unemployment rate of 29%, or, by the expanded definition, 38.5%.

If the business magazine regards Brazil’s unemployment rate as ‘high’ at 11.6%, IRR analysts wonder, how would it describe South Africa’s?


  1. IRR analysts should rather also ponder that this gives us some indication of what it would take to liberalise South Africa that shares similar tradition of strong (including public sector) labor unions, left-wing activism, embedded left-wing policies, massive structural inequalities, bloated / ineffective civil service, parliament / senate corruption / patronage / paralysis, distrust of criminal justice system and suspicion of “right-wing” reformers based on past history. Like South Africa, Brazil has tremendous potential, but somehow cannot unlock it outside resource-booms because of much of the above.

    You should invite the Mises guys from Brazil – they might have some interesting things to say about the war of ideas and liberal-reform fight in Brazil that will resonate with South Africa. It is easy to diagnose and even prescribe, it is difficult to get a patient that doesn’t want to be healed because he is addicted / convinced of a certain mental state 🙂


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