THE GLOBAL BUSINESS ENVIRONMENT PBA4802 MAY/JUNE 2019 PORTFOLIO EXAMINATION Question You have just completed a PGD module “The Global BusinessEnvironment” at the SBL. You have read an article that appeared inan international newspaper about South Africa titled “South Africamust Beware of Falling Behind” (see article below) and you noticedthat there are some assumptions made in the article that you do notagree with. You have decided to write a critical review to theeditor of the international newspaper where you question theaccuracy of the assumptions made in the article. Your will be assessed on the following criteria: • Following instructions (5 marks). If you default on any oneinstruction you will get zero marks. • Structure (identification of the main incorrect assumptionsmade in the article), communication skills and a clear story line(15 marks). • The extent to which you applied the learning outcomes of themodule in a practical setting, the strength of your analysis andyour ability to think critically (80 marks). Start the article as follows: Dear Editor, With reference to your article “South Africa must Beware ofFalling Behind”, published on 30 October 2019, I find some of theassumptions made in the article incorrect and misleading. [maximumfour] The article assumes . South Africa must Beware of Falling Behind South Africa’s performance in the 2017-2018 World Economic ForumGlobal Competitiveness Index (WEF GCI) slipped 14 positions fromthe 2016-2017 WEF GCI results, leaving the country ranking 61 outof 137 economies assessed in the annual survey. The 2017- 2018 WEFGCI also noted that South Africa’s economy is nearly at astandstill, with GDP growth forecast at just 1.0 percent in 2017and 1.2 percent in 2018—hit by persistently low internationaldemand for its commodities, while its unemployment rate iscurrently estimated above 25 percent and rising. One of the most disconcerting aspects of South Africa’s currentposition is its lack of international competitiveness compared toMauritius. The 2018 World Competitiveness Report rated Mauritius45th and South Africa 61th. The good news however is, apart fromMauritius, South Africa is more competitive that most other Africancountries with Botswana rated 63 and Namibia 90. Perhaps one should first look at the precise meaning of theconcept of country competitiveness. Let us now take a verysimplified example: Suppose a motor dealer in Singapore wishes toimport motor cars. The South African supplier wants R500 000 pervehicle (landed), while an Argentinean supplier is asking, for thesame vehicle, only R400 000 per vehicle (landed). The Argentineanmodel may be cheaper for several reasons, the most likely beinglower wages, fewer strikes, higher productivity and so on. Thiswould therefore indicate that Argentina is more competitive thanSouth Africa. South Africa’s lack of competitiveness should be seen againstthe background of an indomitable principle – globalisation of theworld – shrinking space, shrinking time and the disappearance ofborders. In simple terms this means that because of decliningimpediments to trade, technological advances, reduces transportcosts, the internet; money, labour and goods can move more freelyacross political boundaries than in the past, thus nationaleconomies are ascending into one global village. Globalisationstimulates international trade when it is free and fair, whichmeans that it should have a positive effect on economic growth. But”it’s a jungle out there” and any country who cannot hold his ownwill simply go under. A country – or a company or whatever economic unit can, however,only just hold its own, if it is competitive, if it is able toprovide better and cheaper products than its competitors, orpossibly as good and as cheap as them, but definitely not of apoorer quality and more expensive. In the past, South Africa hasbeen able to artificially benefit its own diesel engine industrywith heavy subsidies and high tariffs for imported engines – butstill could not made it in the international competitive stage.Ultimately, South Africa’s lack of competitiveness may have severalnegative results. It discourages investments that create jobs, andso the vicious circle of poverty, the shortage of government fundsto provide basic services, fight crime, low growth, and thus evengreater poverty, goes on. Attached