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Financing Cities in the Global Economy
Module 1. Location and Geographical Economics (LGE)
First presentation Simulation for LGE
Group 3
Galina Kirillova
Juan Granados
Mitiku Beyene
Vlastimil Huba
May 4/2005
Content
Geographical location (country of study)
General diagnosis
Main cities interconnected
International trade flows
Basic criteria to select the country
Geographical Location – South Africa
Area:
Population:
1.2 million sq. km.
46.6 million (2004)
Geographical Location – South Africa
6 Border countries:
Botswana
Lesotho
Mozambique
Namibia
Swaziland
Zimbabwe
Coastline: 2,798 km
Administrative subdivisions:
Nine provinces
General diagnosis
++ points
•Middle-income, emerging market with an abundant supply of
natural resources
•Well-developed financial, legal, communications, energy, and
transport sectors
•A stock exchange that ranks among the 20 largest in the world
•A modern infrastructure supporting an efficient distribution of
goods to major urban centers throughout the region
General diagnosis
- - points
•Growth has not been strong enough (volatility)
•High unemployment rate (27% in 2004)
•Daunting economic problems remain from the apartheid era,
especially poverty and lack of economic empowerment among
the disadvantaged groups
•Infant mortality, HIV and low life expectancy (50 years)
•South African economic policy is fiscally conservative, focusing
on targeting inflation and liberalizing trade as means to
increase job growth and household income.
General diagnosis
•GDP average: 3%
•GDP composition (2003): Agriculture and mining (primary sector)--11%;
industry (secondary sector)--24%; services (tertiary sector)--65%
•South Africa's GDP is expected to increase gradually to 4.3%.
•GDP (2004): $213 billion.
•GDP per capita (2004): $3,480
Main cities interconnected
•Six major cities contribute 55% of GDP
•Represent 31% of total population
CITY
Population
2001
% Contribution
to SA GDP in.
2000
Johannesburg
Cape Town
Durban
Pretoria
East Rand
Port Elizabeth
2,962,759
2,858,743
2,981,237
1,454,290
2,054,133
1,015,334
14.98%
14.01%
7.77%
8.55%
7.78%
2.46%
13,326,496
55.6%
Total %
Taken from Willem Naude and Waldo Krugell, (2002) `An Inquiry into Cities and Their Role in Subnational Economic Growth in South Africa’, Potchefstroom University (Source of data: STATSSA,
Main cities interconnected
•Six major cities contribute 55%
of GDP
•Six secondary cities
population over 1 million
have
•East London
•Umtata
•Pietersburg
•Thohoyandou
•Middelburg
•Rustenburg
.
Taken from Willem Naude and Waldo Krugell, (2002) `An Inquiry into Cities and Their Role in Subnational Economic Growth in South Africa’, Potchefstroom University (Source of data: STATSSA,
Main cities interconnected
South Africa's transportation
infrastructure is well-developed
supporting both domestic and regional
needs
•7 commercial ports and harbors:
Cape Town, Durban, East London,
Mossel Bay, Port Elizabeth, Richards
Bay, Saldanha (115 million ton per annum)
•Johannesburg International Airport
serves as a hub (10 airports over 3,047 m)
•34,000 km Railways and 57,568 km
highways paved
•The domestic telecommunications
infrastructure provides modern and
efficient service to urban areas,
International Trade - Flows
Major destinations -U.K., U.S., Germany, Italy, Japan, East Asia, Sub-Saharan Africa.
Major suppliers--Germany, U.S., Japan, U.K., Italy.
International Trade - Flows
•South Africa is the world's largest producer and exporter of gold
and platinum and also exports a significant amount of coal.
•The value-added processing of minerals to produce ferroalloys,
stainless steels, and similar products is a major industry and an
important growth area.
•South Africa has made great progress in dismantling its old
economic system:
–Reduce the government's role in the economy and to promote private sector
investment and competition
–It has significantly reduced tariffs and export subsidies
–Loosened exchange controls
–Cut the secondary tax on corporate dividends, and improved enforcement of
intellectual property laws
Basic criteria to select the country
•Developing country
•Modern infrastructure supporting an efficient distribution of goods
to major urban centers throughout the region
•12 cities over 1 million inhabitants
•The Government of South Africa has been applying policy to
open markets, privatization, and a favourable investment climate
with its release of the crucial Growth, Employment and
Redistribution
Financing Cities in the Global Economy
Module 1. Location and Geographical Economics (LGE)
First presentation Simulation for LGE
Thank you!