The emerging-market world is growing faster than the developed world, and South Africa is also showing regional dominance like Brazil, Russia, India and China (Brics), says T-Sec chief economist Mike Schussler.
He says South Africa has three cities in the Mastercard Worldwide Emerging Markets Index, released on Wednesday, which is a better representation than any other non-Bric nation.
“Brics – including South Africa – dominate their regions,” says Schussler. He adds that China has 15 cities ranked in the top 30 in the index. The survey was conducted among 65 leading cities driving growth within more 30 emerging markets.
“Johannesburg, Cape Town and Durban do dominate the continent,” said Schussler. “This is something we can use to sell the country with.”
“South Africa is an island of wealth in a sea of poverty on a per capita income basis,” he says.
“We can use this nicely to get more trade out of Africa, for example African stocks list here in Johannesburg and we try to make use of that.”
Schussler says for the first time the emerging market world has become bigger than the developed world, and this will “play out” during the current financial crisis.
“Growth is quicker than in the developed world,” however, “even emerging markets are feeling the heat of the global slowdown”, he adds.
“Chinese manufacturing was growing at more than 20% a year in terms of manufacturing output, then it went down to 16% a year ago or so and is now down to 8,3%.
“So the world is slowing down, but within that, emerging markets are playing a more important role.”
Schussler points out that the JSE is the 22nd most traded stock exchange in the world and has more trades than Singapore.
He says one of the highlights of the survey is that Johannesburg achieved first place in terms of the business environment category, adding that South Africa has more than two million close corporations and companies – about half are active – and that the growth rate in small businesses and companies has been “phenomenal”.
“This has been made possible through things like the ease of registering property,” he explains.
“Our financial market is one of our strengths – our ease of banking – and it is something we can build on.”
Schussler points out that despite the criticism, many micro loans have helped small businesses.
“There is the sophistication of financial markets and ease of getting credit, and the protection of investors. Our legal system adds to our strength and that is something we have to go out and sell as a country.”
“Today, cities rule the world – power today in the economic sphere lies in cities, not rural areas.”
“The important lesson is that cities are interdependent with the countries in this index. Money in rural areas does not have the same return as money spent in city areas.”