Don’t blame Moody’s for ‘kick in the teeth’ downgrade

Predictably, politicians have jumped in to pillory international ratings agency Moody’s for downgrading South Africa’s investment status to junk.

The agency has been characterised as heartless and cruel by announcing the downgrade as South Africa went into a national 21-day lockdown to slow down the spread of the coronavirus.

There certainly is some merit in those accusations. It seems cynical to kick a country when it is down (or on the way down) because of a global catastrophe, which is entirely not of its making.

It is also hurtful to see this sort of thing happening at a time when the strong nations of the world – those who support institutions like Moody’s in the global economic machine – are preparing to spend trillions of dollars to support their own people, who will lose their jobs, and their companies, which will face hardships because of the coronavirus-sparked economic meltdown.

As much as times will be tough in those countries, they are financially much stronger than us. We are already on a downward spiral, with zero or even negative growth having been predicted before the pandemic swept over us. Yet, we all need a dose of reality.

The world markets do not operate on sentiment or sympathy, especially not if you’re an emerging market nation which includes loud-mouthed politicians who frequently attack the very system – capitalism – which organisations like Moody’s (and the investors they advise) represent.

Let’s not blame the international financial institutions – this time anyway – for our imploding economy.

Ten years of relentless state capture and weapons-grade corruption, accompanied by scarcely believable levels of government incompetence, have crippled South Africa and left us defenceless against both the virus and its monetary consequences.

Once we have recovered from this disaster, we must look at our own failings, not the judgments of others.

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