Andre Cillie Jordaan

The challenges of globalisation for development in southern Africa

The world is currently engaged in a process of globalisation, as is reflected in the growth of world trade, unification of capital markets, internationalisation of production, distribution networks and the mega-revolution in information, communications and technology. Globalisation presents both opportunities and challenges for developing countries, especially the southern African region. It also demands that the region becomes competitive in attracting investment, applying new technology, and producing goods and services that can compete efficiently on the global market. The main purpose of this article is therefore to consider whether southern Africa is likely to enter a global community successfully, and be prosperous in the process.

Regional integration in Africa versus higher levels of intra-Africa trade

Regional integration arrangements have mushroomed worldwide, both on intra-regional and extra-regional levels. On an intra-regional level, Africa faces a complicated grid of multiple and overlapping membership of several regional integration organisations, aiming to increase intra-regional trade and cooperation. In this study, a comparative analysis will be executed, based on an intra-regional breakdown of trade, using the United Nations Economic Commission for Africa classification of countries according to geographical region. The level of intra-regional trade will be determined, whereafter the level of inter-regional trade will be established and, lastly, trade with the rest of the world. It seems that despite the high level of regional integration within Africa, it does not necessarily stimulate intra-Africa trade to expected levels as proposed by literature. A regional integration strategy that would cause deeper integration is crucial if the continent is to play a rightful role in the global arena.

Determinants of South Africa’s Exports of Leather Products

ABSTRACT This article analyses the determinants of South African exports of raw hides and skins (other than fur skins) and leather (H41) using annual data covering the period 1999 to 2008 for 32 main trading partners. The results show that the importers gross domestic product (GDP), South Africas GDP, the importers infrastructure, the real effective exchange rate and some regional trade agreements are the main determinants of raw hides and skins (other than fur skins) and leather exports. The article then investigates if there is unexploited trade potential. The investigation reveals that among the sample countries – namely; Australia, France, India, Indonesia, Italy, Japan, Mexico, Singapore, South Korea, Turkey, the United Arab Emirates (UAE), the United Kingdom (UK) and the United States of America (US) have unexploited export potential. It is important from a policy perspective to focus on the unexploited trade potential (in the above-mentioned trading partners) to accelerate growth and alleviate poverty in South Africa.

Trade Patterns in the Automobile Industry: Some Evidence from South Africa

In this article the authors analyze trade patterns in the South African automobile industry using disaggregated harmonized system product-level data. The significance of intraindustry trade is estimated and separated into patterns of horizontally differentiated (by variety) intraindustry trade and vertically differentiated (by quality) intraindustry trade. The results indicate the presence of significant levels of intraindustry trade in automotive trade flows between South Africa and bilateral trading partners. In accordance with theoretical expectations, the empirical investigation reveals that intraindustry trade in South Africas automobile industry is dominated by vertical intraindustry trade. Moreover, in recent years the analysis reveals some evidence that, within vertical intraindustry trade, South Africas automobile industry produces and exports high-quality automotive products aligned with international fragmentation-based production and trade.

The impact of trade facilitation factors on South Africa's exports to a selection of African countries

Economic growth can be enhanced through increased trade among countries, provided the correct institutional structures are in place. A countrys trade is dependent not only on its own trade facilitation reforms but also on those of the trading partners. This paper, using an augmented gravity model, examines trade facilitation factors that impact on South Africas exports to other selected African countries. The results of the estimation reveal the following. An improvement in the customs environment within the importing country provides the largest gain in terms of increasing trade flows, followed by the regulatory environment and domestic infrastructure. Furthermore, adjacency and common language impact positively on South African exports, while distance between countries impacts negatively on it. Being part of the Southern African Development Community is also enhancing exports from South Africa, compared with being part of the East African Community.

Factors influencing bilateral intra-industry trade in the auto industry: the case of South Africa

This study investigates factors influencing bilateral intra-industry trade (IIT) between South Africa and main trading partners in the auto industry, crucial to managers and policy-makers within this industry. The econometric results of the gravity model of IIT are statistically and economically significant in the context of the fixed effects method of estimation. Thus, the econometric investigation reveals that IIT is positively influenced by difference in economic size, trade openness and foreign direct investment, while it is negatively affected by geographical distance, economies of scale and automotive assistance. The findings of this study propose advancing trade liberalisation and deregulation of the South African auto industry to enhance IIT levels.

When Second-Best Becomes the First-Best Option: The Education Dilemma

Education is a public good that should be utilized to help build an educated workforce that can contribute to economic growth and prosperity. A relationship exists between industry, secondary and tertiary education as role players in contributing to an effective workforce. This relationship seems to be linear in nature and therefore, when an imbalance in any of these environments occurs it can potentially have an effect on the overall economic wellbeing of the specific country.

Choice of Exchange Rate Regime in a Selection of African Countries

Abstract An exchange rate regime has an important impact on macroeconomic policies within developing countries and therefore essential in macroeconomic policy formation. The main research question is to determine how the variety of determinants would influence the exchange rate regime choice for a selection of 19 African developing countries. A distinction is made between three groups of variables, namely economic fundamentals, economic stabilization aspects and currency crises factors, all affecting a country’s exchange regime choice. The probability of these determinants is then estimated to establish whether the selected countries would choose a fixed, an intermediate or a flexible exchange regime.

A second-best solution to higher education challenges

Higher education educators are experiencing challenges and increasing pressure to ensure that graduates are employable. Some speculate that the lack of the right employment skills could contribute even more to the increase in unemployment, than does the global recession. There is a belief that a relationship exists between secondary education, tertiary education and industry, as role-players in providing the necessary skills-training for employment. This relationship seems to be linear, and when an imbalance in any of these environments occurs, it could potentially have an effect on the overall economic well-being of the specific country. This article explores the challenges experienced by higher education educators with regard to student employability. The theory of second best (Lipsey and Lancaster 1956) is introduced, as a possible solution to address the educational challenges. Intervention strategies are proposed, specifically from a marketing educator’s perspective.

The big Mac hamburger: Is it used to communicate a distorted media message?

Abstract For more than a decade the Big Mac index has served as a guide to the layman as to whether currencies are at their ‘correct’ exchange rate level. This article compares the postal rate of a standard letter in South Africa, relative to other selected countries, based on the Big Mac purchasing‐power parity. It provides a theoretical overview of the Big Mac Index, its application and shortcomings. The findings indicate that government, private companies and labor unions should be very cautious when using only the Big Mac Index for comparison purposes. It may be concluded that when the Big Mac hamburger is used to compare and determine the relative value of postal rates between South Africa and the rest of the world, a distorted message is communicated.