12 Dec 2018

Fourth Newsletter: Part Three, December 2018

“The Goal” Growth in the Economy…and the rule of 70

News that enlightens

1. Patricia de Lille’s, new party “’Good” “It is a rallying call to good South Africans to resuscitate the project of optimism and reconciliation” To quote de Lille      

Values include, Trust, Equity, Solidary and Service

Themes for “Good”: Spatial Justice
Social Justice
Economic Justice
Environmental Justice

Wow! What a shake up for “coalition politics” and King Pins. Compare these words to what we are hearing from the EFF recently. We have a great deal to put right, it needs optimism and generosity, in contrast to fear and insults.

2. The Rule of 70…a focus on the economy …. Numbers are back

All of us must get behind growing our economy, by growing existing businesses and growing more businesses. No Zero-Sum games, splitting the cake verses more cakes and bigger cakes.

Gross domestic product is the best way to measure a country’s economy. GDP is the total value of everything produced by all the people and companies in the country. … If they are located within the country’s boundaries, the government counts their production as GDP.

GDP must grow to four times our present size from $3500 billion to $14,000 billion per annum. This to achieve a per person GDP per year of $20,000 income (present GDP per person is $7562). This is the minimum requirement to eliminate poverty and achieve a decent quality of life for all our citizens. At $30,000, we would start to look at joining the developed world.

The rule of 70 is a useful guide to determine the number of years it will take for us to achieve the $20,000 and the $30,000 per capita per year.

The rule of 70 states: The number of years it takes for the economy to double in size (GDP) is calculated by dividing 70 by the GDP % growth per year.

For our calculation based on the magical 6% GDP annual growth and doubling $7562 GDP per capita per year to $15124.

The years to achieve the above is calculated by dividing 70 by the 6% GDP growth. This equals 11.66 years.

To double it again to +/- $30,000 GDP per capita per year it takes another 11.66 years equals 23.32 years. So, to $20,000.00, it could take +/-16 years to achieve the first hurdle.

Let’s get started….at an exchange rate R14.00 to the $1, in Rand terms $20,000 equals R280,000 per annum or R23,000.00 per month. $30,000.00 equals R420,000.00 or R35,000.00 per month.

Note these are average figures and over the years inflation, fluctuations in exchange rates and population growth are factors. The formula for the rule of 70 is complex

So how do we get there?  In fact, I wrote a book on this “One Race, The Human Race, Now”. But I only found the rule of 70 recently.

My Fourth News Letter inspired by the Archbishop was a follow up to my book, giving more detail and a record of these times….it was all too much for a newsletter, I admit. I will, early next year add my contribution to Wright publishing’s Blog.

A quote for the times and for Christmas

”By liberalism I don’t mean the creed of any party or any century. I mean a generosity of spirit, a tolerance of others, an attempt to comprehend otherness, a commitment to the rule of law, a high ideal of the worth and dignity of man, a repugnance of authoritarianism and a love of freedom.’

Alan Paton on Liberalism author of “Cry the Beloved Country”.

Best wishes for Christmas and for 2019, no going back let us make it a good year. It is all about attitude.

Neil Wright

Merry Christmas and a Happy New Year