TIPS - Janet Wilhelm - Results from #770

Matters of international trade are increasingly widely recognised as major shapers of global politics. News bulletins are giving more and more coverage to matters like the so-called “trade wars” between the United States and China. These are, indeed, increasingly defining relations between the two largest economies in the world and could well underpin a multi-dimensional rivalry that could be a central feature of international relations for many years to come. Brexit is dominating and indeed re-shaping politics in the United Kingdom. By definition a rejection of a regional integration arrangement, Brexit has also revealed under-currents profoundly shaped by the outcome of a broader trade-driven process called “globalisation”. Just as regional integration is weakening in Europe, African countries have taken decisions that could lead to the most profound and ambitious step forward in African regional integration – the establishment of an African Continental Free Trade Area (AfCFTA). This study seeks to present an analysis of the political economy of trade negotiations over the past quarter century on two main fronts: the multi-lateral and those pertaining to regional integration on the African continent.

*Rob Davies is former South African Minister of Trade and Industry.

Published in Books

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Sunday, 08 March 2020

The Real Economy Bulletin - Fourth Quarter 2019

Main Bulletin: The Real Economy Bulletin - Fourth Quarter 2019

Data sheer: Data Second Quarter

In this edition

Trends in GDP growth: GDP growth in 2019, at 0.2%, was the lowest since the global financial crisis in 2008/9. The economy reportedly contracted in the last two quarters of the year as well as the first quarter. The slowdown reflects a combination of demand-side factors, resulting from slower global growth and a pro-cyclical (although far short of austerity) fiscal and monetary stance, combined with the supply-side drag of Eskom loadshedding and increasingly harsh and frequent droughts as the climate crisis intensifies. Read more.

Employment: Construction employment continued its downward trend, with the loss of 130 000 jobs, or 9% of its total workforce, in the year to the fourth quarter of 2019. Manufacturing also saw net job losses in this period. In contrast, agriculture gained 36 000 jobs. The rest of the economy reportedly created half a million new employment opportunities. Read more.

International trade: From the third to the fourth quarter of 2019, South Africa’s exports and imports fell in both constant rand and US dollar terms. The balance of trade improved because of the relatively sharp fall in imports, largely due to slower economic growth. Read more.

Investment and profitability: Investment was generally depressed in 2019, mostly as a result of the decline in public investment. Private investment fell in the final quarter, although it increased over the year. Profitability continued to fall in manufacturing and dropped in construction. Mining saw some improvement, mostly because the value of its assets fell even faster than its profits. Read more.

Foreign direct investment projects: The TIPS FDI Tracker tracks foreign direct investment projects on a quarterly basis, using published information. The total investment value captured this quarter was R52.4 billion. Read more.

Briefing note: Coronavirus - impact of an economic slowdown in China on the South African economy: The global economy is facing an economic slowdown as a result of the coronavirus disease (COVID-19) that began in China and had spread to at least 50 other countries by late February. China is now the world’s second biggest economy, and South Africa’s largest single trading export destination as well as its largest export market. With the situation changing rapidly, it is important that South Africa keep track of the developments and undertake contingency planning to prepare for the impacts on the economy and on jobs. Read the briefing note online: Coronavirus - impact of an economic slowdown in China on the South African economy.

Briefing note: Budget 2020 and funding for industrial policy: With a depressed economy, the 2020 budget was bound to be a delicate balancing act. Entitled Consolidation, Reform and Growth, it acknowledges a weak economic outlook, low growth, tax revenue shortages, higher debt service costs and concerns with public finances and fiscal deterioration. Read the briefing note online: Budget 2020 and funding for industrial policy.

Published in Quarterly Bulletin

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Tuesday, 03 March 2020

Coronavirus: impact of an economic slowdown in China on the South African economy

This policy brief attempts to identify potential risks for South Africa as a result of the COVID-19 epidemic. To that end, it first provides a brief overview of the developments since the first cases of COVID-19 were reported in China. It then focuses on trade, identifying South Africa’s top exports to and imports from China. On that basis, it outlines the potential impact on major exports and on the supply of intermediate inputs as well as consumer goods.

Published in Policy Briefs

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