http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.93Change: 0.00
R/$ = 12.67Change: -0.01
Au 1095.49 $/ozChange: 0.31
Pt 984.00 $/ozChange: 2.00
 
 
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 21, 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
Embattled South African steel producer ArcelorMittal South Africa (AMSA) has offered insight into the “fair pricing model” it has tabled before government in return for tariff protection and a government stipulation that locally manufactured steel be designated for...
Telecommunications group Telkom on Friday said it had posted a 1.7% uptick in net revenue for the three months to June 30, on the back of a strong performance by mobile on data revenue and higher fixed-line subscription revenue. Mobile net revenue for the first three...
Dangote Cement revised its 2015 spending plans to $1-billion from the $700-million estimated nine months ago after it commissioned two new African plants this June, Nigeria's biggest listed company said on Friday. The company, majority owned by billionaire Aliko...
More
 
 
Recent Research Reports
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Construction 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Electricity 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Road and Rail 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
 
 
 
 
 
This Week's Magazine
Daimler truck test engineer Dirk Stranz pushes one button, and then retracts his hands from the steering wheel of the Mercedes-Benz Future Truck 2025. “And now the truck is driving itself.”
The statutory body responsible for skills development and support in the banking sector, BANKSETA, was investing R68-million in the capacity building project of the University of Venda (UniVen), announced Bankseta company secretary Caroline King at a media event in...
LIONEL MOYAL Cloud services providers must compete against other cloud services providers for business by providing up-to-date systems and services
Legacy information technology (IT) systems are becoming increasingly obsolete because of the maturity, efficiencies and cost effectiveness of cloud-based IT services, says information and communication technology major T-Systems subsidiary Intervate head Lionel...
ARMANDÉ KRUGER Balancing the collection and processing of data must be aligned to strategy
Many complementary services enable companies to derive broad value from data inside and outside them. The complexity of data management means that companies’ strategies determine the various data systems and functions they will use, says PBT Group regional sales...
The South African Civil Aviation Authority (SACAA) has announced that it had awarded the country’s first remotely piloted aircraft systems (RPAS) pilot’s licence. It was issued on Friday, July 10, to SACAA employee and qualified commercial pilot Nicole Swart,...
 
 
 
 
 
 
 
 
 
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
Subscribe Now for $96 Close
Subscribe Now for $96