Perspectives on globalisation, competitiveness

1
Perspectives on globalisation, competitiveness
transformation in South Africa
Dr Roelof Botha
2
Key themes relevant to tourism industry
stakeholders

• Theme 1
• Global economic environment
• Theme 2
• The rise of emerging markets
• Theme 3
• Tourism as a sunrise industry
• Theme 4
• Institutional reform in South Africa the
  advantages of transformation
• Theme 5
• A macro-economic balance sheet

3
Oil price trends
per barrel
4
Oil production consumption trends Asia
pacific
M barrels/day
Consumption
Production
5
Oil production consumption trends Africa
M barrels/day
Production
Consumption
6
Metal mineral commodity price change 2004 to
2006

7
Commodity price declines between 2008 high
August 2008

8
SP top-500 companies cash balances
USbn
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World growth forecasts - 2008

10
The World Economic League the gap continues to
narrow
1st Division 26 High Income Countries
2nd Division 25 Emerging Market Economies
3rd Division Potential Emerging Markets
4th Division (a) Small Economies (b) No-hopers
Recommended route of progress
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The worlds top ten economies- 2006
US trillion
12
The Worlds 2nd top-ten economies - 2006
billion
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The Worlds 3rd top-ten economies - 2006
billion
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The worlds top ten growth performers - 2000 to
2006

15
The Worlds 2nd top-ten growth performers 2000
to 2006

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The Worlds 3rd top-ten growth performers 2000
to 2006

17
Largest emerging market populations- 2002
Million
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Growth in international tourist arrivals - 2007

19
Composition of international tourist arrivals
(total 900 million)
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Tourism arrivals in South Africa
Million
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Total passenger arrivals at airports in South
Africa
Million
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Average annual growth in passenger arrivals at SA
airports 2002- 2007

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Global anxieties

• Cultural liberalisation in Southern Europe (via
  Africa)
• Food shortages
• Water shortages
• Skills shortages
• High commodity prices (especially oil)
• Implicit pension debt of high-income countries
• Civil wars
• American military activities
• Terrorism (especially emanating from the Middle
  East)

24
Institutionalised society in South Africa pre-1994

• Exclusive
• Adversarial
• Labour vs capital
• International isolation
• Patronising
• Neglect of the common place
• Hierarchial
• Subordination of law to state
• Violation of human rights

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Institutionalised society in South Africa post
1994 ( denotes qualified success)

• Inclusive
• Co-operative
• Labour plus capital
• International assistance
• Empowering/enabling
• Illumination of the common place
• Networking
• Law above the state
• Manifestation of human rights

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Advantages of transformation in tourism

• Public sector procurement
• Enhanced attractiveness for foreign visitors
  (showcasing the kaleidoscope of SA cultures)
• Enhanced social cohesion
• Larger entrepreneurial base
• Consolidation of free enterprise as guiding
  principle of macroeconomic policies
• Reduction of income inequality
• Increased productivity

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Socio-economic liabilities

• High crime rate
• High HIV prevalence
• Low public sector capital expenditure
• Unruly neighbours (DR Congo Zimbabwe)
• Small regional market
• Labour unrest (high propensity to strike)
• Uncompetitive corporate tax rate
• Undue reliance on company tax
• High cost of capital
• Perceived threat of interventionism

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Socio-economic liabilities (continued)

• Inefficiencies in the public service
• High unemployment rates
• Unreliable electricity supply
• Infrastructure deficiencies
• Emigration of people with high skills levels
• Skills shortages (in general)
• High wage rates
• Reversal of food security
• Rigid labour legislation
• Over-regulation

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Composition of revenue (R billion)
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International money market rates September 2008

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Capital expenditure by Government as of GDP

32
Effective corporate tax rates SA key trading
partners

33
Trends in income wealth taxes/household income
ratio

34
Real growth in household disposable income

35
Capital expenditure by the private sector as of
GDP

36
Progress with meeting basic needs

• 2.5 million houses
• 1000 new health clinics
• Access to clean water for 10 million people
• New sanitation facilities for 7 million people
• 4.5 million new electricity connections
• Free education
• Redistribution of 3 million hectares of land
• Primary School Nutrition Programme for 5 million
  children
• 11 million new social grant beneficiaries (BIG?)

37
Exchange rate of the rand
/Euro per rand
US dollar
Euro
38
Public debt/GDP ratio

39
South Africas gross gold foreign exchange
assets
Rb
40
Real GDP growth

41
Formal non-agricultural employment
Million