INDIAN INSTITUTE OF PLANTATION MANAGEMENT

BOTTOM OF PYRAMID IN SOUTH AFRICA

PRESENTED BYBIDHU,ANUDEEP,AMIT,CYRIAC,YOGESH

GROUP 4

The South African economy is now the 23rd largest in the world, compared to 35th in 2002. It's growing at a rate of over 3% a year.

Inflation was running at 14% in 1994. It's 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

FIRST, THE GOOD NEWS

•The economy is growing but not fast enough. It needs to grow by 6% a year if it's to make any dent in the official unemployment rate of 31%.•A lack of skills, particularly in IT, is holding back job creation.•South Africa seems to have “jobless economic growth”. Companies are benefiting from new technology and foreign investment but they are not creating jobs for the vast army of unemployed.•48% of the population is living below the poverty line, earning less than 530 rand (£53) a month.•GEAR has kept wages down among low paid workers, particularly in the public sector. This has seriously damaged relations between the 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 been lost( African National Congress)

THE NOT SO-GOOD NEWS

From BRIC to BRICS

BRIC, to be known as BRICS now that South Africa has become a member, is a powerful bloc of emerging economies which, according to the International Monetary Fund, will account for as much as 61% of global growth in three years' time. South Africa brought into BRICS "not only South Africa but a larger African market of a billion people,"

“the role ofemerging economies in advancing the restructuring ofthe global political, economic and financial architectureinto one that is more equitable, balanced and rests onthe important pillar of multilateralism”SOUTH AFRICA

Millions of poor South Africans want better wages, more job protection, pensions and higher taxes to improve public services. Many are getting restless, resulting in public sector strikes and growing land occupations. South Africa has been compared to a double-decker bus travelling with the rich on top and the poor at the bottom; however, the bus has no stair

Brazil Russia India China South Africa

Area (km) 8 514 877 17 098 242

3 287 263 9 596 961 1 219 090

Population

203 429 773

138 739 892

1 189 172 906

1 336 718 015

49 004 031

Popu growth rate

1.134% -0.47% 1.344% 0.493% 1.1%

UN HDI -I 73 65 119 89 110

Unemployment rate

7% 7.6% 10.8% 4.3% 24%

No of internet users

75.98-million

40.85-million

61.85-million

389-million

4.42-million

No of mobile phone users

173.86-million

230.5-million

670-million

747-million

46.44-million

Analysis of the Brics members

Profile of Brics countries

The Brics’ global significance

REST OF WORLD

BRICSREST OF WORLD

BRICS

Population 56.95% 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 inthe global context. Brics countries account for closeto half of the world’s population, a sizeable proportionof global GDP and hold a majority of the world’s foreigncapital. Brics countries also command 15.17% of theglobal export volume, which is indicative of the growingeconomic and political importance of the bloc. Chinaitself 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

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 inequalitiesPromoting well being and healthy life styles Investing in infrastructure and human capital, building

skills and knowledge beyond agriculture.Making state institutions responsive to poor peopleMonitoring and evaluating key indicators of socio-

economic activity

What can bring change(GEAR)

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.

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.

CONCLUSION

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