INDIAN INSTITUTE OF PLANTATION MANAGEMENT

BOTTOM OF PYRAMID IN SOUTH AFRICA

PRESENTED BY BIDHU,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. 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

THE NOT SO-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)

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 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 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

Analysis of the Brics members Profile of Brics countries Brazil Russia India China South Africa 1 219 090 49 004 031

Area (km) Populatio n

8 514 877 203 429 773

17 098 242 3 287 263 138 739 892 1 189 172 906

9 596 961 1 336 718 015

Popu growth rate

UN HDI -I

1.134%

-0.47%

1.344%

0.493%

1.1%

73

65

119

89

110

Unemploy 7% ment rate

No of internet users No of 75.98million 173.86-

7.6%
40.85million 230.5-

10.8%
61.85million

4.3%

24%

389-million 4.42million

670-million 747-million 46.44-

The Brics global significance

REST REST OFOF WORLD BRICSBRICS 56.95% 43.05% WORLD 74.32% 84.82% 26.68% 15.17%

Population GDP(PPP) Export volume

Here we can say that the importance of the Brics bloc in the global context. Brics countries account for close to half of the worlds population, a sizeable proportion of global GDP and hold a majority of the worlds 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 worlds 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 governments 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 socioeconomic activity

The way forward

South Africas role in the newly formed Brics bloc is untried and untested. The dynamic that the African country will play within the grouping is yet to evolve. It is, however, widely speculated that the country has been included owing to its gateway status to the African continent, and also because of its political stature in the international community.

A key test of the Brics bloc is whether it will be able to promote intra-trade between the Brics countries. For South Africa this means that the country will have to tackle a number of structural issues regarding its internal trade capacity to become more competitive in global market.

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.

THANK YOU

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