Grietjie Verhoef

Regulation, deregulation, and internationalisation in South African and New Zealand banking

The banking industries of New Zealand and South Africa were among the most tightly regulated in the western world in the early 1980s. Restrictions on foreign banks were particularly acute, especially in South Africa. From a position of considerable isolation, first New Zealand then South Africa implemented programmes of financial liberalisation. We show that the outcome of liberalisation was different in these two countries. South African banks were able to establish a strong presence in external markets, but the New Zealand banking system was mopped up by its Australian neighbour. These divergent outcomes reflect the origins, geographical position, and unequal capabilities of the New Zealand and South African banking industries.

The Globalisation of South African Conglomerates, 1990–2009

ABSTRACT China, Brazil, India, Russia, Malaysia, Turkey and South Africa have added significantly to the growth of outward developing country foreign direct investment (OFDI) in recent years. These trends reveal emerging capabilities in companies from outside the developed world and they have prompted several questions: How do developing countries’ firms succeed in entering global markets? Do these firms improve their competitiveness through OFDI? This article investigates the OFDI phenomenon in South Africa. It starts by exploring some theoretical considerations, then provides an overview of internationalisation trends, and finally sets out revealing case studies of the most successful South African firms. The article shows that, although no single homogeneous internationalisation strategy emerged for all successful South African conglomerates, the common denominator was excellent entrepreneurial and management capacity.

Nationalism, social capital and economic empowerment: SANLAM and the economic upliftment of the Afrikaner people, 1918–1960

At the beginning of the twentieth century the Cape-based Afrikaner elite used their social networks to establish an insurance company to address their business aspirations as well as wider economic empowerment needs of poor Afrikaners. This contribution explores the operating dynamics of social capital of an elite portion of society to benefit the wider Afrikaner community, thereby establishing new networks among Afrikaners. By the second half of the twentieth century the South African Life Assurance Company (Sanlam) developed from a local Cape-based enterprise to a strong diversified corporation extending social capital from the limited elite group to Afrikaners in the wider context of South Africa. The networks among Afrikaners were the key to the successful development of Sanlam and associated companies.

Savings for life to build the economy for the people the emergence of Afrikaner corporate conglomerates in South Africa 1918–2000

This article explores the establishment and growth of Sanlam, the South African life assurance company. Although its formation was primarily motivated by Afrikaner nationalist concerns, it was organised along sound business principles. As the initial social responsibility goals were achieved, its strategy was adjusted to compete in the growing modern South African and later global markets. The empowerment strategy of Afrikaners since the early decades of the twentieth century is also analysed. This strategy depended on the mobilisation of own resources, in this case savings in life assurance policies. Sanlam acted as the vehicle to strategise, plan and implement empowerment opportunities. Once this objective had been achieved, Sanlam started to promote Black economic empowerment. The article focuses on three broad developments: 1. the establishment and formative phase of Sanlam; 2. the expansion, diversification and acquisition of business interests; and 3. the return to core business once the initial aims were achieved.

The state and scope of the economic history of developing regions

ABSTRACT This paper examines the state and scope of the study of economic history of developing regions, underlining the importance of knowledge of history for economic development. While the quality of the existing research on developing countries is impressive, the proportion of published research focusing on these regions is low. The dominance of economic history research on the North American and Western European success stories suggests the need for a forum for future research that contributes to our understanding of how institutions, path dependency, technological change and evolutionary processes shape economic growth in the developing parts of the world. Many valuable data sets and historical episodes relating to developing regions remain unexplored, and many interesting questions unanswered. This is exciting. Economic historians and other academics interested in the economic past have an opportunity to work to begin to unlock the complex reasons for differences in development, the factors behind economic disasters and the dynamics driving emerging success stories.

Concentration and competition: The changing landscape of the banking sector in South Africa 1970–2007

The banking sector in South Africa has been dominated by British-owned banks since the second half of the nineteenth century, both in nature and size. In the Cape Colony privately incorporated banks were only permitted after 1823. By the early 1830s 28 local banks thrived in the agricultural prosperity of the colony. In 1860 The London & South Africa Bank was the first of the Imperial banks to open its doors, followed by Standard Bank in 1862. Four successive bank crises in the Cape Colony in 1865, 1876, 1881 and 1890 practically wiped out the local independent banks, leaving only two British banks, Standard Bank and Bank of Africa, established in 1880 out of remnants of the Oriental Banking Corporation. By 1890 only seven banks remained active in the Cape Colony.

SLOW GROWTH, SUPPLY SHOCKS AND STRUCTURAL CHANGE: THE GDP OF THE CAPE COLONY IN THE LATE NINETEENTH CENTURY

ABSTRACT The trajectory of South African economic development starts in the colonial economies. No systematic data exists on the Gross Domestic Product of the territories that formed the Union of South Africa in 1910. A comprehensive project to reconstruct nineteenth-century Gross Domestic Project (GDP) for the different territories can now report for the first time on actual Cape Colony GDP data. This paper presents the findings of reconstructed Cape Colony GDP according to the SNA. It confirms earlier estimates, refines very tentative projections of Cape Colony GDP during the nineteenth century and offers new insights into the nature and direction of the settler economy in the nineteenth century. It also pioneers data on the Cape Colony GDP and is the first in a series outlining nineteenth-century GDP of the territories that formed the Union of South Africa in 1910.

Reluctant ally: The development of statutory regulation of the accountancy profession in South Africa, 1904–1951

Accountants in South Africa established professional organizations to protect and promote the profession in the rapidly growing business environment after the discovery of diamonds and gold in the last quarter of the nineteenth century. This article investigates the development of the statutory regulatory environment of the accounting profession, which gradually emerged alongside the profession’s own structures. The growth of the South African economy created a rising demand for professional accountants, and large numbers of accountants from Britain emigrated to South Africa (or to the former colonies under British control, which later formed the Union of South Africa in 1910). Professional regulation remained a professional concern until the 1951 Act which established the Public Accountants and Auditors Board. The article extends the existing literature on the state–profession nexus by explaining the circumstances leading to proactive intervention of the state and the intersection of the state’s public interest responsibility and the closure attempts of the profession.

Globalisation of knowledge but not opportunity: Closure strategies in the making of the South African accounting market, 1890s to 1958

The global expansion of knowledge is one manifestation of the multi-dimensional phenomenon called globalisation. The “globalisation paradox” was recently used in an analysis of the impact of globalisation on the transfer of professional qualifications (Annisette and Trivedi, 2013). Here it is argued that earlier manifestations could be observed in the accounting realm. The globalisation of accounting knowledge led to intra-professional rivalry and the implementation of closure strategies in the periphery of the British Empire. Earlier literature explains such professionalisation activities in South Africa as the responses by non-British inhabitants. Further literature on post-independence states alludes to local challenges to the settlement and control of the accountancy market by British accountants. This article shows how, in the emerging “South African” market for accounting knowledge, rivalry between accountants from different British accounting bodies shaped the professionalization project in the local context. New archival material is used to reveal how the global expansion of accounting knowledge generated strategies to monopolise market access.

Pressures for Change in the Australian and South African Insurance Markets: A Comparison of Two Companies

Since the 1980s a wave of demutualizations has occurred across the financial services sector from stock exchanges to building societies, savings and loans associations and insurers. In both Australia and South Africa, this has had a marked effect on the life insurance markets that had been dominated by mutual life insurers for 150 years. This article adopts a case study approach to analyse the key drivers of organizational change. It examines the experiences of the Australian Mutual Provident (Australias oldest and largest life insurance mutual) and Sanlam (the second-largest mutual life office in South Africa) as they proceeded down the path to demutualization. Firm-specific, market-specific and country-specific forces are identified as placing pressure on existing mutual structures.