The current recession is affecting consumer spending, and it shows. During a recent Sunday visit to the Waterfront in Cape Town, it was obvious that visitor numbers are not what they used to be. The parking garage was less than half full. The restaurants, a major attraction at the centre, were doing well. However, the more expensive one’s seem to have experienced reduced volumes. Today, on a visit to Canal Walk in Century City, the situation was very much the same. There was plenty of parking, and the restaurants in one of the sections of the Centre were almost deserted. Admittedly, the weather wasn’t great today, and it was 16.00. It is obvious that people are very careful, how they spend their money. Special offers in retail shops and restaurants are everywhere to be seen, and those with spare cash in their pockets can get some real bargains. The winter tourism from Europe and the Far East must also be way down, and the swine flu doesn’t help either. Let’s hope things will start to turn around sooner than later. WL
South Africa , it seems, has dodged the economic meltdown the developed world is currently experiencing. According to Reserve Bank Governor Tito Mboweni, South Africa is tied to the economies of China and India, which both continue to show economic growth, despite the meltdown further north. With world economies so intermingled, there seems to be a possibility that developing nations, spared the madness of the unregulated markets, will emerge as potential winners in this mess. As trade contracts worldwide, Southern Hemisphere countries continue to show growth, and their trade is ever more dependent on their Southern Hemisphere partners. This will lead trade flows away from the developed world, which will further increase pressure on export-oriented countries in the North. The current economic situation in the world is dire, to say the least, but there hope in the South. This might lead to a separate trade development in the South, which might leave the North in the cold. Already developing nations are buying up valuable companies in the developed world big time, taking control of basic commodities, car industries and other valuable assets.
What does all this mean for South Africa? With the elections 2009 behind us, the markets have seemed to endorse the electoral results. The Rand has appreciated tremendously and that trend should continue for the short term. Zuma’s recent statement in Port Elizabeth during a rally that “friends will not be in government by default”, was liked by the markets, but not the cronies in the Youth League, COSATU and the SACP. With the world-class industries we have, South Africa will be doing just fine.