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

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Financing Cities in the Global Economy Module
1. Location and Geographical Economics
(LGE)First presentation Simulation for
LGEGroup 3Galina KirillovaJuan Granados
Mitiku BeyeneVlastimil Huba May 4/2005
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Content

• Geographical location (country of study)
• General diagnosis
• Main cities interconnected
• International trade flows
• Basic criteria to select the country

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Geographical Location South Africa

• Area 1.2 million sq. km.Population 46.6
  million (2004)

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Geographical Location South Africa

• 6 Border countries
• Botswana
• Lesotho
• Mozambique
• Namibia
• Swaziland
• Zimbabwe
• Coastline 2,798 km
• Administrative subdivisions
• Nine provinces

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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

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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.

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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

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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
Total 13,326,496 55.6
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, 2001 PIMSS, 2001) .
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Main cities interconnected

• Six major cities contribute 55 of GDP
• Six secondary cities have population over 1
  million
• 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, 2001 PIMSS, 2001) .
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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,

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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.
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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

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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

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Financing Cities in the Global Economy Module
1. Location and Geographical Economics
(LGE)First presentation Simulation for
LGEThank you!