Welcome to the Country Economic Report with

Ernest

What is National Economy?

The Sum of all the revenue that is generated in the country (by industry, tax income, exports, etc.) minus the expenses of running the country, i.e. imports, payable interests, etc.

Simply put,

Σ All Generated Revenue – Country’s Operational Expenses

The Minister of Finance is tasked with reporting to the Nation, the budget drawn in which total government spending is announced each year.

The positive and negative growth of the economy affects each individual, and thus it becomes a necessity to know how adversely an individual is affected.

Factors effecting the National Economy

Exchange Rates Fluctuation

Investments

Interest Rate

Eskom power outages

Inflation

Student Protests

Taxes

Strike actions

Amount of government spending

Intense Drought

Increase or decrease in money supply

Retrenchment Policies

Platinum Mine Debacle: Marikana Strike action

Etc.

What happens when RSA’s economy dwindles?

Inflation

Investments

End

Exchange Rates

Fluctuate

Retrenchment

policies

Increased

unemployment

Strike

Actions

GDP

Decreases

South Africa: Economy Overview

The World Economic Forum ranked South Africa 49th in its Global Competitiveness Index out of 140 economies, up from 56th in the previous reporting period.

It ranked the country first for strength of auditing and reporting standards as well as financing through local equity market.

South Africa was also ranked 12th for financial market development; it ranked 29th for market size, 33rd for business sophistication and 38th for innovation, out of 140.

The World Economic Forum ranked South Africa second in the world for the accountability of its private institutions, and third for its financial market development, “indicating high confidence in South Africa’s financial markets at a time when trust is returning only slowly in many other parts of the world”.

The country's securities exchange, the JSE, is ranked among the top 20 in the world in terms of size.

In the current environment, developing countries need to brace for possible shocks by building resilience to risks to growth.

Where they are able to boost government spending or lower interest rates, they can provide support to economic activity.

They can further encourage investor confidence with reforms to governance, labour market functioning, and business environments.

Measures to absorb young workers or to increase workforce participation will relieve demographic pressures in many countries

How are we Implicated?

Juxtaposition of where the Rich live and the reality of where the minority live

Welcome to the Global Conversation with

Ernest

What is Global Economy?

The study of international markets’ economic performance and the policies that govern their respective governments.

Simply put,

The comparison of global budgets in relation to earned revenues and incurred expenses due to respectable factors such as exchange rates and Foreign Stock Exchange.

Recent Factors effecting the Global Economy

Ebola virus outrage

Change in China’s economic climate

Panama Papers

In the aid to curb Ebola, many countries pitched in to contribute funds for the virus’ response

Change in China’s economic climate

In China, policies are aimed at putting growth on a more sustainable footing and reducing leverage in heavily indebted sectors (World Bank 2015b). In 2015, growth eased slightly more than expected to below 7 percent, reflecting soft exports and a slowdown in investment.

The deceleration was especially pronounced in the real estate and manufacturing sectors during the first half of the year. Policy support, including an easing of financial regulations, helped stabilize the property sector in the second half.

Regional integration and spill-overs: East Asia and Pacific

Countries in East Asia and Pacific (EAP) are deeply integrated with the global economy and with each other. China has become the largest trading partner and source of FDI for the region, although Japan remains one of the largest sources of FDI for several economies.

Reflecting this integration, a growth slowdown in China could result in sizeable spill overs to a large number of countries, while a slowdown in Japan would primarily affect Malaysia, Thailand, and Indonesia.

Slowdowns in major advanced economies outside the region could also have sizeable spill overs.

Panama Papers..

It’s hard to know where to start in tallying up the explosive revelations in the Panama Papers, an analysis of leaked documents from global law firm Mossack Fonseca revealed by the International Consortium of Investigative Journalists (ICIJ).

The size of the leak is unprecedented, but the tricks Mossack Fonseca has allegedly used for its clients are neither new nor surprising. Anonymous shell companies and the failure of governments to require lawyers, corporate service companies, or banks to collect beneficial ownership information on clients leave the door wide open for dirty money to flow around the globe virtually unhindered

The Panama Papers have implicated the above shown and more of holding offshore bank accounts and tax evasion.

The Panama Papers highlighted a key aspect of why the system isn’t working–because globalization has allowed the capital and assets of the 1 % (be they individuals or corporations) to travel freely, while those of the 99 % cannot. Globalization is supposed to be about the free movement of people, goods, and capital. But in fact, the system is set up to enable that mobility mainly for the rich (or for large corporations).

How this directly affects me

This picture depicts the reality of how Morals are quickly ignored for financial gain.

Banks and Governments alike are happy to break the law at the expense of ordinary low-and middle- class citizens.

Those who suffer are forced to watch helplessly and in destitute.