This article was first published by News24 / CityPress on 8 February 2026
The WEF (World Economic Forum) meeting in Davos is usually nothing more than an excuse for governments to socialise with wealthy people and for all of them to get a ski trip vacation included in the bargain. Perhaps that is too harsh – the presence of busy CEO’s indicates that it has some value to them – and they get an opportunity to let governments know which reforms are required to unlock investment from their companies into those countries. Whether these governments listen is another matter altogether.
This year was different; it was more than a networking session between government and business leaders. The more important, emergent underlying theme was the decline of US power, the growth of multilateralism and the rise of a world order based on great power competition rather than what has been the case since WWII: A world order based on the rules set and enforced by a hegemon, the US.
This was most clearly articulated by Mark Carney, the Prime Minister of Canada. Since Canada is the closest US ally by any measure you can think of, his remarks are the first thing that makes this a notable WEF. Not only are their two economies tightly interlinked, but they also both belong to Nato, share intelligence via the five eyes intelligence alliance of Anglosphere countries, share airspace defense via NORAD, and of course they share the longest international border between any two countries. Not to mention a shared culture, language (the English part of Canada), and history.
Secondly, Carney is the perfect caricature of an arch-globalist; he has led both Canadian and British central banks. He believes in free trade. He was in some sense parachuted into the top levels of Canadian politics having been a technocrat all his life, yet here is saying the things that some American allies are unwilling to say and that some South African politicians and thinkers are seemingly unaware of.
The entire speech is worth reading. The most important thing he said is that it should be the top priority of every government to build a strong economy at this moment. This is a lesson that South African policymakers are not learning quickly enough. At the monetary level, we should increase the share of foreign reserves allocated to gold and away from fiat currencies like the Euro and the US dollar. We should also be pursuing an interest rate policy that encourages savings. Savings not only act to increase capital formation over time (the only sustainable way to do this, and to do it in a way that enhances sovereignty), they also build resilience from external shocks in an economy.
A high-interest rate policy recognises the simple fact that production must come before consumption; low interest rate policies are an attempt to generate consumption without bothering about supply. This is surely one of those pleasant fictions that Carney was speaking about. It could seemingly work for a while because we lived in a fiat currency era, but history tells us that these don’t last, and when they end, they often do so catastrophically. The rapid increase in the price of gold and other monetary commodities tells a worrying story, even as it helps the pockets of gold bugs like me.
We must welcome the change in the domestic monetary regime from an inflation target range of 3-6%, to an inflation ceiling of 3%. This comes on the back of two years of a primary budget surplus for National Treasury, so it also shows that central banks serve the interests of the government, not those of the people. The SARB (South African Reserve Bank) was willing to tolerate higher inflation as long as it made it easier for the government to manage its debt, even if this harmed the economy. The introduction of the inflation ceiling now tells us that it was probably always a good idea, but the SARB would not have done it if it forced the government to default on its debt.
While some commentators welcome the SARB’s policy change, and any direction towards less inflation should be welcome, it is also a troubling indicator. What would the inflation target be if the government had no debt and lived wholly within its means? Most likely the SARB would tolerate no inflation, savings would be encouraged, interest rates would fall naturally (remember, rates are the price of money so increase the supply via savings, and the price falls naturally) and the economy would boom as the increased savings and the lower price for the savings lead to a boom in capital formation.
The other policy levers are deregulation and lower taxes. These would reduce the government-imposed costs of doing business. A growing economy would then allow investments in things like the military – the state of the South African National Defence Force (SANDF) is a mark of great shame against the government and it means we are one of the countries least prepared for this new world of great power conflict. Our military should be at the level of Australia’s military; keep in mind, Australia has roughly half our population and an economy that is 4-6 times larger.
However, our military does not compare to Egypt, Morocco or Algeria, and our infantry fares badly compared to the Rwandan infantry. This is not because we have less capable soldiers – we have some of the most capable soldiers on Earth and that is why the SANDF still has some respect – but politicians have consistently underfunded the SANDF and used it for cadre deployment which has unfortunately degraded the quality of the officer class. The government is now paying for this with the SANDF ignoring orders from the President to not allow Iran to engage in naval exercises that South Africa recently hosted. There has also been a series of public criticisms of government policy by SANDF top leadership.
Even if this criticism is accurate, it should not be coming from the active leadership of SANDF; retire and then criticise the government. This lack of discipline is very bad for the force, and what does it signal to the lower ranks? Civilian control of the military, no matter the quality of the civilian leadership, is a constitutionally enshrined principle. It should be respected because SANDF respects the constitution and its members swore to defend it, even if the civilians controlling the SANDF leave much to be desired.
Finally, there is the local debate on geopolitics which is still stuck in the Cold War era, on all the major sides of the debate. It is the very opposite of the reality outlined by Carney. On one side, you have the ANC which believes in uncritically supporting its Cold-War allies because it believes they share the same agenda of undermining the “capitalist USA.” Meanwhile both China and Russia understand that capitalism is necessary for prosperity, which is not to say these governments believe in maximally free markets (which government does?) But they’re not committed to the socialist or communist cause, as they once were.
This is the source of much of what is wrong with our foreign policy. Our Israeli policy makes no sense because we see the Palestinians as a victim of global capital as implemented by a capitalist proxy in the form of Israel. The same South Africa that was willing to host Omar Al Bashir and Vladimir Putin after the credible accusations against both of genocide and war crimes respectably is unwilling to maintain diplomatic relations with Israel because of the war in Gaza. Israeli actions in Gaza have been excessive and even genocidal, sane people around the world have all said so, but sane people around the world also said Omar Al Bashir was presiding over a genocide, Putin launched a war of aggression against Ukraine, Iran is ruthlessly killing protestors, North Korea is violating the human rights of their people as a matter of course etc.
Yet South Africa did not act as strongly against any of these countries, as it is doing against Israel. It is this incoherence that has South Africa losing out to Morocco in African politics. We have been supporting the Algerian-backed Western Sahara independence movement because these were the ANC’s Cold War allies, but Morocco has been quietly building alliances over the continent and was finally able to rejoin the AU in 2017 after a 33 year absence, despite South Africa’s objections.
On the other side, we have people who believe in the West beyond all reason. The ones who are suspiciously silent when America unilaterally violates the rules-based order, while claiming to support it when America finds it convenient to uphold those rules against its enemies. The ones who advocate capitulation to US demands and abandoning China, even as the closest US allies, like Canada, seek closer relations with China to diversify their alliances.
Each side claims to represent the majority of South Africans, but these claims should be treated with skepticism. Most South Africans, if they think about geopolitics at all, want relationships that create jobs and promote security here at home. They do not have the ideological preferences that dominate both sides of our public debate. Both sides are also hypocritical and inconsistent as a matter of course, and would do well to stop claiming principle and admit that they just like certain countries, and dislike others. Their ideas would be disastrous for this country if adopted. Rather learn from countries like Canada, the UK and most importantly India: make alliances that suit you and be willing to change when the facts change.
