Perhaps coincidentally, in a week in which SA was experiencing a devastating wave of violence and looting, the International Monetary Fund (IMF) published a blog on its latest research which examines the macroeconomic impact of social unrest.
Without getting too econometric about it, the bottom line is that episodes of unrest negatively impact economic activity not just immediately but more persistently - and an unrest "event" is associated with a one percentage point reduction in GDP six decades after the event.
Given SA's struggle to sustain growth of even 1% in recent, pre-pandemic years, that's a bleak prospect. But it matters to the outcome how strong a country's institutions are, the IMF's economists find, and how much policy space it has.
As SA starts to count the devastating economic and social cost of a week of violence, looting and arson, it will matter a great deal to the outcome what's done now and in coming weeks and months to contain the damage.
The immediate impact on economic growth will be felt from the looting and destruction of shops and other businesses, the attacks on infrastructure and production facilities, and - perhaps most significant at macroeconomic level - the closure for almost a week of SA's N3 toll road lifeline, along with the Durban port and the rail line. Economists have likened it to last year's level 5 lockdown and are factoring the supply chain disruptions and production losses, along with the loss of retail business, into lower growth forecasts for this year and next.
It's not just the direct hit to businesses and livelihoods in affected regions but the hit to consumer and business confidence that will dampen economic activity. Restocking and rebuilding could counter the impact to some extent. But with order not yet restored and key facilities such as the N3 only just reopened, it's too soon to see how this will play out. It didn't help that the government seemed oblivious to the seriousness of the risk to the economy - though business and Nedlac seem finally to have got the message through. When the government released a joint statement with business on Friday, following a meeting with 34 CEOs that agreed on a series of concrete actions, it was surely a first, and at least a start. But whatever the immediate impact, the medium to longer-term damage to the economy could be deep, and in at least two areas. The first is the damage done to SA's investibility.
It's not the financial market investors we should be worrying about but the real economy investors in businesses that generate jobs and goods and services and exports and taxes - foreign direct investors as well as local ones, and not even those we know about but those we don't, the potential investors who come and look at a new project or acquisition in SA but decide they'd rather take their money elsewhere.
Violence and disruption and the prospect of more political instability tend to deter foreign real economy investors and undermine the confidence of domestic investors who might have been contemplating expansions or new projects. Even if this week's violence subsides quickly, it could have a long tail in that sense.
It will surely have a long tail too because of the way it revealed the profound weakness of SA's security, intelligence and policing institutions. As Total's disaster with the rebels in Mozambique showed, investors need to know they can rely on the state to enforce the rule of law to ensure the viability of the enterprises they invest in. A country in which the state cannot be relied on to secure the N3 or a petrol refinery from attacks by politically inspired thugs is not one that offers an attractive environment for fixed investment. Nor does the approach to doing business of the kind of rent-seeking Zuma supporters who helped to spark the violence do much to make SA, and particularly KwaZulu-Natal, investible.
But a second aspect of the deep damage done is the destruction of thousands of small businesses that don't have insurance and won't be able to restart. SA has too few small and informal entrepreneurs as it is - a World Bank study this week estimates SA's self-employed at only 10% of the workforce compared to 30% in comparable middle-income economies. It can't afford to lose any. Speedy relief for the small businesses hit hardest by the violence has to be a priority in the very short term. Restoring order and enabling critical facilities to reopen has to be top of the immediate priority list. But it will require too that key institutions be bolstered - and that the government push ahead urgently with reforms without pandering to the rent-seekers. After this week's crisis, there can be no better time to do so.
• Joffe is contributing editor
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