http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.20Change: -0.02
R/$ = 10.69Change: -0.05
Au 1274.90 $/ozChange: -18.24
Pt 1420.50 $/ozChange: -7.50
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Jun 22, 2012

Upstream firms seek trade protection, but downstream firms dither

Back
Africa|Education|Standard & Poor|System|Africa|South Africa|Automotive
Africa|Education|System|Africa||Automotive
africa-company|education-company|standard-poor|system|africa|south-africa|automotive
More Insight
© Reuse this

I recently read an article which dealt with South Africa’s widening current account deficit, our worrying levels of unemployment and how the clever chaps at Standard & Poor’s (S&P’s) believe that both of these matters represent “key challenges” facing South Africa.

Nothing new, but maybe this is just another confirmation that our most basic challenges are not going to disappear soon, and certainly not without significant intervention.

Broadly speaking, a growing current account deficit simply means that we are importing more than we are exporting and this difference can’t keep growing indefinitely. This difference is largely funded at present through foreign direct investment and foreign investment in our stock market. Without question, this is not a sustainable situation, especially when the whole world appears to be in a growing crisis and we may soon find that capital inflows start drying up.

Addressing unemployment and correcting the current account deficit boils down to the key focus of developing and protecting local industry. The long-term fix is to create an environment where our manufacturers are more competitive and can sell our manufactured goods locally (replacing imports) and abroad (growing exports).

Addressing skills shortages is the topic of discussion at many forums and the importance of addressing enormous structural concerns in our education system is known. What is clear is that the solution will be a long-term one. A more immediate intervention is required to deal with existing unemployment levels.

Getting beyond this realisation is proving to be easier said than done. Government has gone to great lengths to outline policies and initiatives to assist, but our skills situation and growing input costs are not addressed over night.

Focused interventions to become globally competitive and part of global supply chains, like the support provided for the automotive sector, require medium to long-term programmes.

The only other logical alternative is to slow imports entering the market, which can be done by increasing the duties on imported goods. This is now happening at a rate not seen for at least 20 years. Strangely enough, we are not seeing the number of antidumping applica- tions that we antici- pated for 2012, but there is still time and we may see the activity pick up later this year.

Against this backdrop, we are seeing government taking a more interventionist stance in the trade arena and begin- ning to increase levels of protectionism through increased import duties in support of local industry and, in a broader sense, discouraging increasing levels of imports where practically possible.

It would appear that companies that are producing locally are now in the best position vis-à-vis duty protection that they will be for a very long time and certain industries are taking advantage of the protective stance taken by government. Yet, many industries are still not exploring this avenue and are merely struggling along, probably largely out of ignorance.

It’s quite ironic actually that the industries that are pushing hard for duty increases are the very big, often primary, industries. Duty increases this far upstream actually push up prices all the way downstream and then make the downstream industries even less competi- tive.

The industries that are further downstream seem to struggle to coordinate their efforts and, as a result, find it very difficult to effectively apply for the very protection government appears to be eager to provide. The opportunity is simply passing them by.

Edited by: Creamer Media Reporter
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Pieter du Plessis & Donald Mackay News
I have uncapped Internet access at home. Or so I though until recently. Suddenly, it turned out that my 'uncapped' MWeb Internet access was subject to a 'reasonable usage' policy, despite my paying for uncapped Internet access every month.
The International Trade Administration Commission (Itac) may request the commissioner of the South African Revenue Service (Sars) to impose provisional antidumping duties to prevent further material injury being caused to a domestic industry during the time it takes...
Fair trade, as well as what it entails, is proving to be an increasingly subjective concept. World Trade Organisation (WTO) agreements appear to be more 'open to interpretation' than ever before and, in some cases, trade remedy actions appear to defy all logic. Two...
More
 
 
Latest News
Updated 2 hours 46 minutes ago Construction, mining, development and engineering group Basil Read on Thursday announced that it expected a loss a share for the six months ended June 30, of between 131.18c and 160.33c, compared with the 198.28c earnings a share in the prior corresponding period....
Updated 2 hours 47 minutes ago JSE-listed Group Five on Thursday said it had secured a three-year R4-billion engineering, procurement and construction contract for the design and build of a 350 MW gas- and oil-fired combined cycle power plant in Ghana. Ghana-based Cenpower Generation would issue...
Phumulo Masualle and Naledi Pandor
Updated 3 hours ago The East London industrial development zone (Elidz) on Thursday afternoon officially launched its Science and Technology Park (STP), which is aimed at speeding up the pace of economic development in the Eastern Cape. The STP’s location within the Elidz was expected...
More
 
 
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
 
 
 
 
 
This Week's Magazine
The Built Environment unit at the Council for Scientific and Industrial Research (CSIR) has developed a cost-competitive ultrathin concrete pavement surface that, for the upgrading of unpaved roads to paved roads, is more durable than many other pavement alternatives...
The Southern African Large Telescope (SALT), based at Sutherland in the Karoo region in the Northern Cape province, is promising to become an important instrument for research into dark matter. "SALT is shaping up to be very important for answering questions about...
HENK SNYMAN TDM supports broader industrial activity that has a multiplier-effect on the potential to beneficiate raw materials in many industries
The South African tool, die and mouldmaking (TDM) industry is being revitalised to locally produce the tools, dies, moulds and fixtures required by the manufacturing sector. Local TDM capability is key to enable the manufacturing industry to remain competitive, says...
Misfortune often finds its roots in the smallest of things. Such as a centimetre or two. Or is that in inch? Perhaps a foot? Swedish or Dutch? The French had reason to blush in May as it became apparent that national rail operator SNCF had ordered 2 000 trains that...
The repositioning of the Fibre Processing & Manufacturing Sector Education and Training Authority (FP&M Seta) and its business processes will ensure improved performance in reaching strategic targets and in providing customer service.
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks