INDIAN INSTITUTE OFPLANTATION MANAGEMENT BOTTOM OF PYRAMID IN SOUTH AFRICA PRESENTED BYBIDHU,ANUDEEP,AMIT,CYRIAC,YOGESH GROUP 4
FIRST, THE GOOD NEWS The South African economy is now the 23rd largest in the world, compared to 35th in 2002. Its growing at a rate of over 3% a year. Inflation was running at 14% in 1994. Its now below 5% and falling. Interest rates dropped from 16% to under 9% in the first ten years of the ANC Government. This is good news for businesses wanting to borrow and could mean more jobs are created. The budget deficit, which was 8% in 1997, fell to 1.5% in 2004. South Africa is balancing its books. 25% of goods produced in South Africa are for export, up from 10% in 1994. Black South Africans are spending ten times as much on cars as they were in 1994
THE NOT SO-GOOD NEWS•The economy is growing but not fast enough. It needs to grow by6% a year if its to make any dent in the official unemployment rateof 31%.•A lack of skills, particularly in IT, is holding back job creation.•South Africa seems to have “jobless economic growth”. Companiesare benefiting from new technology and foreign investment but theyare not creating jobs for the vast army of unemployed.•48% of the population is living below the poverty line, earning lessthan 530 rand (£53) a month.•GEAR has kept wages down among low paid workers, particularlyin the public sector. This has seriously damaged relations betweenthe ANC Government and the trade unions.•Since 1994, Company Directors salaries have risen by 29% a year,workers salaries have risen by just 6%.•In the ten years since the ANC took power, 2 million jobs have beenlost( African National Congress)
From BRIC to BRICSBRIC, to be known as BRICS now that SouthAfrica has become a member, is a powerfulbloc of emerging economies which,according to the International MonetaryFund, will account for as much as 61% ofglobal growth in three years time. SouthAfrica brought into BRICS "not only SouthAfrica but a larger African market of a billionpeople,"
“the role of emerging economies in advancing the restructuring of the global political, economic and financial architecture into one that is more equitable, balanced and rests on the important pillar of multilateralism” SOUTH AFRICAMillions of poor South Africans want better wages, more jobprotection, pensions and higher taxes to improve public services.Many are getting restless, resulting in public sector strikes andgrowing land occupations. South Africa has been compared to adouble-decker bus travelling with the rich on top and the poor at thebottom; however, the bus has no stair
Analysis of the Brics members Profile of Brics countries Brazil Russia India China South AfricaArea (km) 8 514 877 17 098 242 3 287 263 9 596 961 1 219 090Populatio 203 429 138 739 1 189 172 1 336 718 49 004 031n 773 892 906 015Popu 1.134% -0.47% 1.344% 0.493% 1.1%growthrateUN HDI -I 73 65 119 89 110Unemploy 7% 7.6% 10.8% 4.3% 24%ment rateNo of 75.98- 40.85- 61.85- 389-million 4.42-internet million million million millionusersNo of 173.86- 230.5- 670-million 747-million 46.44-
The Brics’ global significance REST OFOF WORLD REST BRICSBRICS Population 56.95% WORLD 43.05% GDP(PPP) 74.32% 26.68% Export volume 84.82% 15.17% Here we can say that the importance of the Brics bloc in the global context. Brics countries account for close to half of the world’s population, a sizeable proportion of global GDP and hold a majority of the world’s foreign capital. Brics countries also command 15.17% of the global export volume, which is indicative of the growing economic and political importance of the bloc. China itself makes up 12% of the world’s export volume.
BATTOM OF PYRAMID PROBLEMS IN SOUTH AFRICA Recession, tariff barriers, poor infrastructure Racial Problem, HIV/ AIDS ,Crime Problem weak supply chains, economies often reliant on natural resources Government performance/service delivery Electricity concerns, poverty ,unemployment Militant unions and more social unrest Foreign nerves Water contamination and flooding The year of measurement Supply chain continuity The cloud computing silver bullet Global climate change
What can bring change(GEAR) Ensuring consistency in government’s rural development strategy whereby access to economic activities is expanded in order to reduce poverty Investing in human right and social justice to improve living conditions Developing partnerships with civil society organisations Addressing gender inequalities Promoting well being and healthy life styles Investing in infrastructure and human capital, building skills and knowledge beyond agriculture. Making state institutions responsive to poor people Monitoring and evaluating key indicators of socio- economic activity
The way forwardSouth Africa’s role in the newly formed Brics bloc isuntried and untested. The dynamic that the Africancountry will play within the grouping is yet to evolve. Itis, however, widely speculated that the country has beenincluded owing to its “gateway” status to the Africancontinent, and also because of its political stature in theinternational community.A key test of the Brics bloc is whether it will be ableto promote intra-trade between the Brics countries. ForSouth Africa this means that the country will have totackle a number of structural issues regarding its internaltrade capacity to become more competitive in globalmarket.
CONCLUSION South Africa, therefore, needs to bring new policies, invest in its own, and the regional infrastructure, as well as reduce intra-African trade barriers for the country to provide any meaningful contribution to Brics and enhance its competitiveness on the international stage by providing entitlement ,developing capabilities and working on action plan to prove that it deserves its place in BRICS.