Thursday, September 09, 2010

How well does South Africa fare in the world markets?

Please read the report that is posted on the below link.

I think it is very informative, especially if you read some of the indicators that are not mentioned in the below write-up.

Despite the positive spin in the article below, South Africa is slipping, and it will take years to recover.

Sub-Saharan Africa

Africa has experienced impressive growth over the past decade, and has weathered the recent global economic turmoil relatively well. Indeed, coming out of the crisis, the IMF predicts GDP growth of 4.7 percent in 2010 and well above 5 percent for the next few years for sub-Saharan Africa.

Yet an assessment of the competitiveness of African economies raises questions about how sustainable this growth will be over the longer term and highlights areas in need of urgent attention to allow Africa to achieve its full economic potential.

However, despite such concerns, some African countries continue to fare quite well. South Africa and Mauritius remain in the top half of the rankings, and there have been measurable improvements across specific areas in a number of other African countries.

On the other hand, there have been some significant declines registered in countries that were previously making strides ahead. More generally, sub-Saharan Africa as a whole lags behind the rest of the world in competitiveness, requiring efforts across many areas to place the region on a firmly sustainable growth and development path going forward.

South Africa, at 54th overall, remains the highest ranked country in sub-Saharan Africa. While it has dropped somewhat in rank since last year, its performance has in fact remained stable and the decline reflects improvements in other countries.

South Africa still benefits from the large size of its economy, particularly by regional standards (it is ranked 25th in the market size pillar).

It also does well on measures of the quality of institutions and factor allocation, such as intellectual property protection (27th), property rights (29th), the accountability of private institutions (3rd), and goods market efficiency (40th).

Particularly impressive is the country’s financial market development (ranked 9th), indicating high confidence in South Africa’s financial markets at a time when trust has been eroded in many other parts of the world.

South Africa also does reasonably well in more complex areas such as business sophistication (38th) and innovation (44th), benefiting from good scientific research institutions (ranked 29th) and strong collaboration between universities and the business sector in innovation (ranked 24th).

While a number of attributes therefore make South Africa the most competitive economy in the region, in order to further enhance its competitiveness it will need to address some weaknesses.

The country ranks 97th in labor market efficiency, with inflexible hiring and firing practices (135th), a lack of flexibility in wage determination by companies (131st), and poor labor-employer relations (132nd).

Efforts must also be made to increase the university enrollment rate of only 15 percent, which places the country 99th overall, in order to better develop the country’s innovation potential. In addition,

South Africa’s infrastructure, although good by regional standards, requires upgrading (ranked 63rd) beyond what has been achieved in the preparations for the 2010 World Cup.

The poor security situation remains another important obstacle to doing business in South Africa. The business costs of crime and violence (137th) and the sense that the police are unable to provide protection from crime (104th) do not contribute to an environment that fosters competitiveness.

Another major concern remains the health of the workforce, ranked 127th out of 139 countries, the result of high rates of communicable diseases and poor health indicators more generally. Improvements in these areas will enhance South Africa’s productivity and competitiveness

1 Opinion(s):

White meddem said...

IMHO the next president of SA could turn out to be Zwelinzima Vavi. He's hell bent on getting Zuma out of office and flattening Foolius Malema. The strikes were largely a political move to reinforce the perception among the workers, not the indigent, that he means business. Vavi is due to retire from Cosatu in 2012 and has aspirations towards government. If Zuma is pushed out sooner rather than later, he might retire earlier from Cosatu or have Motlanthe keep the presidential seat warm for the next two years. However, he may not have reason to trust Motlanthe. Look forward to more shake ups. I'm not sure we should like Vavi all that much despite his anti corruption stance as he wants to tax the rich more heavily to subsidise the poor, he is a socialist after all. On the other hand, if, and that's a big if, he gets a handle on corruption, it may not be necessary to bleed the middle classes dry.