gill marcus : south africa ’ s challenges at a difficult time for the global and domestic economy address by ms gill marcus, governor of the south african reserve bank, at the noah gala fund - raising dinner, sandton, 21 august 2012. * * * distinguished guests, thank you for the invitation to address you this evening. the work that noah does with orphans in our disadvantaged communities is admirable, and it is heartening to see the support that the organisation receives from the private sector at a very difficult time for our economy. it is estimated that the hiv / aids pandemic will leave more than 5 million children orphaned by 2015, which will add to the demands on the public sector and private sector organisations such as noah. helping to ensure a positive present and future for these children is not just a question of money. to achieve the aims and vision of noah requires dedication and commitment to train and build capacity to foster stronger communities capable of caring and providing for children, whether these children have been orphaned by aids or any other cause. noah ’ s basic message is that every child must be allowed the possibility to dream and you provide that hope for the children and their communities. it was stated in the noah annual report 2012 “ looking ahead ” that “ the key to success lies in a collective effort ”. that “ government … has laid a foundation for change ( through ) grants and payments for caregivers that make the noah approach sustainable ” and that “ getting to all needy children is the problem ”. while there is much negative comment about government policies, it is important to recognise that at the core of health care there has been a critical shift that holds the potential to improve collaboration across all sectors involved in primary care, and to reach the adults and children who are presently underserved or excluded. when considering community oriented primary care i am aware that the ideas are very familiar to many of you in your practice. what is exciting is that they are now being integrated through the national department of health into the health care system. i will return to this in some detail later on. noah is undertaking this work at an extremely difficult time for the global and domestic economy. let me first deal with the advanced economies, particularly the eurozone and the united states. the crisis in the advanced economies persists, despite the temporary breather that global financial markets appear to be taking in the past few days. however, on the ground, growth outcomes and prospects have been deteriorating. growth in the eurozone was

negative in the second quarter, having contracted by 0, 4 per cent, and eight of the 17 members experienced negative growth. the engine of growth of the region, germany, barely managed to register positive growth, and the short term indicators are not promising. the uk remains in recession, growth in japan declined sharply to 0, 3 per cent in the second quarter, and the prospect of a sharp fiscal cutback in the us early next year remains a dark cloud over the already slowing economy. to illustrate the depth of the very complex problems faced, greece, which is at the forefront of the unfolding tragedy, is expected to have negative growth of some 6 per cent for 2012, with its gdp expected to have shrunk by around 20 per cent over the three - year period 2010 – 2012. growth in the larger systemically important economies, notably china, india and brazil, is also moderating under the strain of declining exports, illustrating the interdependent nature of the global economy. behind the growth numbers are the millions of people who have lost their jobs and their dreams. the unemployment rate in the eurozone has now risen to 11, 2 per cent, and youth unemployment to 22, 4 per cent. this places enormous stress on the fabric of society which not only struggles to provide for those such as aids orphans, but now needs to deal with the demands of a growing number of people around the world who previously had jobs and bis central bankers ’ speeches aspirations, many of them with skills and education, and who now find themselves in a situation where the chance of finding employment diminishes by the day. the demands on governments multiply under such circumstances, at a time when excessive fiscal austerity is the order of the day in the advanced economies, with large cutbacks in government spending and provision of basic social services. unless governments can get growth going again, social and political disaffection is likely to spread, as we have already seen in a number of countries in europe. but not all of the challenges facing us are man - made. while growth in the developing economies is more positive, the global economy and developing economies in particular are facing new danger, and that is the sudden emergence of a possible food crisis which can only exacerbate the fragile social situation in many countries. the past few weeks have seen significant increases in several agricultural commodity futures prices, including grains, soya beans and cattle. since the beginning of june, futures prices of maize and wheat