Toscafund’s chief economist sees South Africa blowing up worse than Libya within 15 years, according to an interview he gave Reuters this week.”It’s socially, politically and demographically flawed. It will malfunction within 15 years. It will go the way of MENA (the Middle East and North Africa) but the blow-up will be much more serious,” Savvas Savouri told Reuters in an interview last week.
“Professional whites and blacks are leaving in hordes — the human capital is decaying,” he said.
How will a South African blow up affect markets?
A “malfunction” in South Africa, which is the world’s biggest producer of platinum and a major producer of palladium alongside Russia, would push commodity prices higher, benefiting rival commodity-rich countries.
“Clearly Russia and Australia will win out. The surge in commodity prices will benefit them,” said Savouri.
Savvas Savouri has been researching South Africa, Africa’s biggest economy, for ~4 billion Toscafund, a London-based asset manager. He believes its lack of centralized leadership will ultimately lead to the country’s failure.