LATEST ECONOMIC BRIEFINGS
EMIRATES: DUBAI | 30.07.2010
Dubai’s capital markets appear to be in for significant change with plans unveiled to establish a second-tier stock exchange coming hot on the heels of Dubai Financial Market (DFM) – the government-administered domestic bourse – and the DIFC-based NASDAQ Dubai’s move to formally link their trading platforms. All of this is happening as speculation of a merger between the bourses of Dubai and Abu Dhabi mounts.
ALGERIE | 30.07.2010
Les efforts importants déployés par l’Algérie pour augmenter la production céréalière commencent à porter leurs fruits, dans la mesure où les récoltes record de l’année dernière et les rendements importants de 2010 aideront à réduire les coûts d’importation et à créer des emplois sûrs dans les zones rurales. Cependant, l’objectif de l’autonomie alimentaire fixé par le pays reste encore bien éloigné.
SENEGAL | 30.07.2010
Le Sénégal est en train de devenir un leader en matière de développement de l’énergie solaire comme énergie de l’avenir, et ce, à la fois à l’échelle nationale et continentale. Pour y parvenir, le pays veut augmenter l’utilisation des énergies renouvelables afin de surmonter ses propres manques et promouvoir un grand programme international ayant pour but de mettre fin à la dépendance de l’Afrique de l’Ouest à l’égard des combustibles fossiles.
BULGARIA | 30.07.2010
Though Bulgaria’s economy is likely to remain in the slow lane for the rest of this year, the country’s banking sector continues to show resilience in the face of global economic contraction. There are concerns, however, that increasing levels of bad loans carried by some lenders could add to pressures on the sector.
OMAN | 28.07.2010
A raft of new agreements recently signed by the Ministry of Transport and Communications will see a significant round of investment in Oman’s transport infrastructure. The 15 agreements, signed earlier in July, cover projects in land, sea and air infrastructure and are worth a total of OR136.9m ($355.9m).
COUNTRY COVERAGE
Putting a Lid on Unemployment
South Africa, Volume 112
04.11.2008
04.11.2008
South Africa's government is responding to stubbornly high unemployment figures by announcing a major boost in project spending, though there are warnings the international credit crisis could hamper efforts to create new jobs.
Figures released by Statistics SA on October 28 show 4.12m people, or 23.2% of the workforce, were unemployed in the third quarter of this year - up from 23.1% the previous quarter - while the informal sector of the economy shed 165,000 jobs in the quarter. These results point to harder times for small businesses and make the government's aim of reducing the jobless rate to 14% by 2014 looking somewhat at risk.
Some of the hardest hit sectors were those once seen as driving forces in the South African economy. Employment in the mining industry fell by 9.2% to 314,000, while there was a 3.3% drop in the number of workers in the finance sector, and a 3.2% decline in positions in construction.
"We need to disabuse people of the notion that we will have a mighty developmental state capable of planning and creating all manner of employment," Finance Minister Trevor Manuel told Financial Times the same day the jobless figures were announced.
The Congress of South Africa Trade Unions, the country's labour organisation, echoed these concerns, stating, "Although small, this rise rings alarm bells for workers, as it reverses a succession of small reductions in unemployment."
Though efforts to increase employment appear to have come up against an ill wind from outside - with the jobless rate stubbornly staying above 23%, - the government has already moved to counter the expected effects of the global economic slowdown.
In a bid to boost spending, the government has pledged to inject an additional $15.7bn into the South African economy over the next three years, with a special focus on infrastructure projects.
Announcing the funding increase, which will take state spending from 27.5% of Gross Domestic Product (GDP) to 29%, Manuel said it will push the budget into deficit next year - the shortfall being around 1.6% of GDP. The mid-term budget statement, released on October 21, also revealed that growth forecasts have been reduced to 3%.
The minister was reported as saying that more needed to be done to overcome the shortage of semi-skilled workers. "While it is understandable to have a skills shortage in highly skilled professions, a shortage of artisans is a failure of the country to develop basic skills and constrains economic growth," he said.
According to Efficient Group economist Dawie Roodt, South Africa's existing labour laws, which he says make it difficult to dismiss underperforming workers, make employers reluctant to take on staff unless there is a serious need. He reckons that instead of promoting schemes to create jobs, the government should take steps to support new and small businesses. "The right strategy would be to develop more entrepreneurs and create more wealth by lowering company taxes and improving company registration procedures," he told the Business Times on October 29.
There was some small relief for small businesses on October 29, when Statistics SA announced there had been a fall in the consumer price index for the first time in two years. Inflation in September declined to 13%, down from 13.6% the previous month, mainly thanks to a fall in international fuel prices.
This could ease pressure on the central bank to further raise interest rates, having hiked the cost of borrowing 10 times since mid-2006.
If inflation continues to go down, as has been predicted by Reserve Bank Governor Tito Mboweni, and the state injects capital into the economy, there could be a reversal of the rise in unemployment. That said, businesses are likely to be cautious for the time being, putting off any expansion plans or new hirings until the fallout from the global economic crisis is fully assessed.
Figures released by Statistics SA on October 28 show 4.12m people, or 23.2% of the workforce, were unemployed in the third quarter of this year - up from 23.1% the previous quarter - while the informal sector of the economy shed 165,000 jobs in the quarter. These results point to harder times for small businesses and make the government's aim of reducing the jobless rate to 14% by 2014 looking somewhat at risk.
Some of the hardest hit sectors were those once seen as driving forces in the South African economy. Employment in the mining industry fell by 9.2% to 314,000, while there was a 3.3% drop in the number of workers in the finance sector, and a 3.2% decline in positions in construction.
"We need to disabuse people of the notion that we will have a mighty developmental state capable of planning and creating all manner of employment," Finance Minister Trevor Manuel told Financial Times the same day the jobless figures were announced.
The Congress of South Africa Trade Unions, the country's labour organisation, echoed these concerns, stating, "Although small, this rise rings alarm bells for workers, as it reverses a succession of small reductions in unemployment."
Though efforts to increase employment appear to have come up against an ill wind from outside - with the jobless rate stubbornly staying above 23%, - the government has already moved to counter the expected effects of the global economic slowdown.
In a bid to boost spending, the government has pledged to inject an additional $15.7bn into the South African economy over the next three years, with a special focus on infrastructure projects.
Announcing the funding increase, which will take state spending from 27.5% of Gross Domestic Product (GDP) to 29%, Manuel said it will push the budget into deficit next year - the shortfall being around 1.6% of GDP. The mid-term budget statement, released on October 21, also revealed that growth forecasts have been reduced to 3%.
The minister was reported as saying that more needed to be done to overcome the shortage of semi-skilled workers. "While it is understandable to have a skills shortage in highly skilled professions, a shortage of artisans is a failure of the country to develop basic skills and constrains economic growth," he said.
According to Efficient Group economist Dawie Roodt, South Africa's existing labour laws, which he says make it difficult to dismiss underperforming workers, make employers reluctant to take on staff unless there is a serious need. He reckons that instead of promoting schemes to create jobs, the government should take steps to support new and small businesses. "The right strategy would be to develop more entrepreneurs and create more wealth by lowering company taxes and improving company registration procedures," he told the Business Times on October 29.
There was some small relief for small businesses on October 29, when Statistics SA announced there had been a fall in the consumer price index for the first time in two years. Inflation in September declined to 13%, down from 13.6% the previous month, mainly thanks to a fall in international fuel prices.
This could ease pressure on the central bank to further raise interest rates, having hiked the cost of borrowing 10 times since mid-2006.
If inflation continues to go down, as has been predicted by Reserve Bank Governor Tito Mboweni, and the state injects capital into the economy, there could be a reversal of the rise in unemployment. That said, businesses are likely to be cautious for the time being, putting off any expansion plans or new hirings until the fallout from the global economic crisis is fully assessed.
