http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.09Change: -0.35
R/$ = 11.59Change: -0.15
Au 1281.14 $/ozChange: 2.33
Pt 1259.50 $/ozChange: 11.00
 
 
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 Letters 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|Environment|Standard & Poor|Sustainable|System|Africa|South Africa|Automotive
Africa|Education|Environment|Sustainable|System|Africa||Automotive
africa-company|education-company|environment|standard-poor|sustainable|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
Thabo Kgogo
Updated 3 hours ago Dual-listed oil and gas company SacOil has completed Phase 1 of the field development operations at the Lagia oilfield in Sinai, Egypt. The South African-based independent company, through its subsidiary Mena International Petroleum Company, also completed hydraulic...
Updated 3 hours ago The City of Johannesburg, whose environmental policy innovations include an integrated waste management plan that covers all relevant environmental legislation, has been named the country’s most environment-friendly metropolitan municipality in the Department of...
Updated 3 hours ago The South African Renewable Energy Council (Sarec) has welcomed the conclusions of the Council of Scientific and Industrial Research’s (CSIR’s) ‘Financial benefits of renewables in South Africa in 2014’ report, published on January 21. “The results of this study...
More
 
 
Recent Research Reports
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
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 road...
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.
 
 
 
 
 
This Week's Magazine
BRUCE BRADFORD The 3D printers have a clear upgrade path to eventually print in wood, ceramics and metal-alloys
Three-dimensional (3D) printers being sold in South Africa by electronics distributor Rectron currently print in two types of plastic, but have a clear upgrade path over the next five years to eventually print in wood, ceramics and metal-alloy materials, says Rectron...
The world’s two dominant commercial aircraft manufacturers, Airbus of Europe and Boeing of the US, both recently announced that they had made record aircraft deliveries in 2014. Boeing set a global record for the industry with 723 commercial aircraft delivered, while...
The Western Cape is shifting further into the renewable-energy space with the official opening of a factory specialising in solar inverters, a key component of solar photovoltaic (PV) plants. The investment in the manufacturing facility in Cape Town aims to boost the...
Business Leadership South Africa (BLSA) last month welcomed Cabinet’s establishment of a technical team war room to undertake various interventions to improve electricity supply security over the short- and medium-term, but added that the private sector also had a...
Despite a rapid rise in mobile connections and the economic and social benefits of such connectivity, more than half of the world ended 2014 unconnected. For this reason, industry commentators believe the biggest impact of mobile technology is still to come –...
 
 
 
 
 
 
 
 
 
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