UK long-term growth seen at 1%; Signing out in South Africa; India's subsidies for golf and grain

1 UK long-term growth seen at 1% (Katie Allen in The Guardian) Britain's economic growth will be limited to just 1% in the longer term as higher government spending, dwindling North Sea oil stocks and an ageing population all take their toll on the country's potential output, a group of economists has warned.

Tempering the recent spate of upbeat news on the UK and chancellor George Osborne’s assertion that the economy has “turned a corner”, a new paper predicts a post-crisis era of sluggish growth. The long-term, sustainable growth rate in the UK may be only 1%, compared with the 2.5% that the Treasury thought standard from the 1980s to the 2000s, according to a discussion paper for free-market thinktank the Institute of Economic Affairs.

"Until 2008 the UK had got used to our economy doubling in size every 25 years: unless action is taken it will now only double in size every 70 years," says the group of economists, which includes former Treasury adviser and UK Independence Party candidate Tim Congdon, and Andrew Lilico, the managing director of Europe Economics, an economics consultancy. They highlight the weakest recovery in "industrial history" and blame a lack of growth for the government's deficit reduction plan being off target.

Predicting sluggish growth rates, the IEA authors blame higher government spending and tax as a proportion of GDP, more regulation of energy and financial services, the depletion of North Sea oil, higher debt levels for government, business and households relative to GDP. The paper advocates "bold" reforms if the UK wants to get back to sustainable growth rates of around 2% or more over the long run, including: the rolling back of government activity and influence; the regeneration of affordable credit channels to unencumbered households and businesses; and the implementation of radical supply-side measures.

2 Signing out in South Africa (Justice Malala in Johannesburg Times) Countries become basket cases when good men and women check out of the system. Think of what happened in 2008 when the electricity outages ravaged large parts of the country. The economy lost billions of rands. We had a spike in generator sales then as people decided that they did not have confidence in the country's power supply system. They were saying goodbye to Eskom and to South Africa. They were checking out. They had given up on the system.

Think about what the same people who are opting out of the electricity grid have opted out of already. They no longer trust the police, so they are already paying security companies to look after them while they live behind electric fences and high walls. They do not trust the water supply, so they have sunk wells in their yards. They do not trust state education, so they send their children to private schools.

And they no longer comment on, or follow the country's politics because they feel powerless as monstrosities such as Nkandla are built while the Guptas land their jets at Waterkloof Air Force base with impunity. They keep their heads down and make money. This is the moment which is most brilliantly described by Dele Olojede, the Pulitzer Prize-winning journalist. Speaking of his native Nigeria in 2005, he said: "We live in a Hobbesian jungle, where every man is for himself and the concept of the common good has become totally alien.

Think of all the countries you know in which the elite has signed out of the system. There is a collective name for them: banana republics. We must avoid being counted among them.

3 India’s subsidies for golf and grain (Amit Baruah in Dawn) The Delhi Golf Club in the heart of New Delhi is a superb piece of real estate. It’s also a hangout of the rich and the powerful, a cosy bunch using these 179 acres of prime, prime land in the heart of India’s capital. The tightly-controlled club pays Rs 582,000 as annual rent to the government. A Right to Information reply published in the Hindustan Times newspaper last week valued the land at Rs 467.72 billion. So, this club actually pays a rent of Rs 48,500 per month for a piece of land, whose per acre value is just over Rs 2.60 billion.

Me, even with my limited arithmetic, knows that the value of the land and the rent being paid don’t match up. The rent should be much, much more. Say, a minimum of Rs 5 billion per year? A new rent would also mean increased membership fees. It’s highly unlikely given the cosy nexus that operates that the annual rent will go up. To think otherwise would be naive.

Now, let’s shift the scene to another part of Delhi – Tughlakabad. The whole of last week thousands of people thronged the local Sub-Divisional Magistrate’s office looking for “forms”. So, what was all the fuss about? The Delhi Government had begun implementing the National Food Safety Bill that allows millets, wheat and rice @ Rs 1, 2 & 3 per kilo to every member of an eligible household under a new and expanded public distribution system. And, the crowds wanted to register for the new scheme.

The scheme will cover 813 million Indians, a massively ambitious exercise whose merits and demerits have been much debated. Sixty-seven per cent of India – 75 per cent rural and 50 per cent urban – is to be covered by this scheme. The scene at the SDM’s office in Tughlakabad, which unfortunately didn’t make it to the newspaper editions or television screens, is a powerful reminder that India’s electorate wants food grain at a subsidised rate. Between the subsidy for golf and grain, no prizes for guessing where my sympathies lie.