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17 November 2014

G-20 commits to growth

• Countries pledge policy changes • Aim is $2-trillion boost by 2018

17 November 2014

This was the headlines in today’s Business Day and I must say it was like music to my ears.

The group of 20 nations submitted close to a thousand individual policy changes which they believed would lift growth and said they would hold each other to account to ensure these were implemented.

We may ask why only now? Why do 1st world countries allow their economies and eventually the global economy to stagnate? Why didn’t the 1st world countries allow the economies to start to grow 6 years ago?

It is unfortunately so that it requires a balancing act to stimulate an economy to sustainable growth. Growth in a free market, other than in a socialistic or a communistic regime goes hand in hand with inflation and if given free rein can easily get out of hand like in Zimbabwe were inflation escalated within a few months to more than a 100%, which eventually totally wrecked their currency, as well as their economy and it may take now decades for that economy to get back to normal again. There are many other issues that hampers and disturb sustainable growth of which one prominent issue is politics. If the majority of the South African policy makers for instance would decide to give the economists a free hand to change the labour relation act to international standards, a huge stumbling block in SA path to sustainable growth would have been removed.

The commitments at the G-20 summit give us hope that our strategy change, form moderate to moderate-aggressive for all our Funds of Funds a few months ago, may benefit, at least until 2018.

Friendly Greetings

Andre Delport

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