Week 9 South Africa

                                          

South Africa located at the southern tip of Africa and has 2798 kilometres of coastline along with south Atlantic ocean and Indian ocean.  Their GDP of 2012 is 578,640 billion; it is the greatest economies in Africa and has great impact to other nations. Also in 2012, South Africa joined to the BRIC organization to increase international trade between Russia, Brazil, India and China.

Mining, Producing, Agricultural, and Serve industry are South Africa’s four economy pillars. Even thought South Africa has abundant resources, they have a high rate of poverty and unemployment with low GDP per capita.

According to the Council on Foreign Relation website, “South Africa’s foreign direct investment (FDI) inflows have dropped by 43.6% in the first half of 2012. The decline is the largest among all developing countries.” What factors cause this decline? Some analysts conclude the following several factors, the first factor is the South Africa’s under-performing education system that is an obstacle to improve their education performance, and investors will scruple the employees’ qualifications. Second factor is South Africa is already a well mature investment country compared with its neighboring countries; therefore it is hard to find a mispriced probability investment. The third factor is their major industries are facing saturation condition, for example, the mining industry, they have to rise the cost because of the increasing labor cost, but they just can get limit profit.