Chairperson, I will have a slightly different stance in this debate. The question is not whether the situation in Europe will or has affected us. The real question is how bad it's going to be and what we can do about it. In 2008 South African exports plummeted by 35%, constituting a lag in GDP growth, and resulting in a shedding of jobs, and businesses closing their doors. We are still battling today to recover from that recession in Europe in 2009 and suddenly Europe stumbles again. So, unfortunately, if Europe falters, we are in trouble.
The European Union is no longer our largest trading partner - China is - but the EU remains an important one. They still buy more than 30% of all South African manufactured exports, so their downturn is being felt on our local shores. The Reserve Bank announced this afternoon that the South African current account recorded its largest deficit in four years because exports fell because of subdued external demand.
So what should we do? Look North? West? No, East, says Abdullah Varachia, when he recommends in The Sunday Independent on Sunday that South Africa should look no further than Singapore. Singapore could hold clues for us as a nation on how to overcome challenges unexpectedly dumped on us. Central to this is, how do you manage your education system, and how do you treat the best and brightest students you have? You spot them early and then you nurture them. Singapore has empowered them to study at the best universities all over the world. When they come back at the age of 26 or 27, they must first work in the private sector for six years and only then can they progress to the civil service and parastatals. After an investment of about 12 years, you get the best-run civil service in the world.
One important ingredient for all nations, if they want to excel, is to make sure that their various institutions function well. We have seen a failure of major institutions in the performance of their functions at the Marikana tragedy. The Reserve Bank also warned today that labour unrest in the mining sector might cause a further slump in economic growth. So, what can we do? Laws and institutions cannot be used to entrench the interests of the few, so what we must do is ensure that we run institutions properly, look after our professional and young people and then they will look after the jobless and the poor.