DURING the closing months of his 15-year period as this country’s finance minister, Trevor Manuel repeatedly insisted that South Africa was not in recession. Defensively, he defined economic recession only in the technical sense as the outcome of two successive quarters of negative growth. Business people and consumers generally, meanwhile, have known the impact of recession in practical terms for almost a year. Now the technical version has also arrived with the announcement by Statistics SA that the gross domestic product (GDP) fell by a shocking 6,4% during the first quarter of this year.

Two successive quarters of negative growth have now occurred and at least one more is in the offing. Well-informed commentators are predicting that, even if there is some improvement in the second half of the year, zero growth is what this country can expect for 2009. This will be a far cry from the government’s longstanding target of an annual growth rate of three percent to six percent. There was great hope that South Africa would escape the worst effects of global recession, largely because of sound economic policy in recent years and legislative restraints on banks. These factors have caused a delayed impact but the bubble of optimism has now well and truly burst, and the implications for increasing job losses and other recessionary trends are alarming.

This sobering news comes in the very week when President Jacob Zuma and his cabinet are meeting in seclusion for several days to craft policies and to prepare for his State of the Nation address in Parliament next week. The challenge is huge, especially for a party which made job creation and a reduction of poverty the major features of its electioneering platform. Much wisdom will be required in finding a balance between admirable ideals and a disciplined realism. With recession and its dark implications now an indisputable reality, the people’s psychological mood will not be good. Zuma will need the statesmanship of a Barack Obama to carry the country forward. This is not the time for populism or for guile.