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SOUTH AFRICA'S DUAL ECONOMY: DEVELOPED AND DEVELOPING

By Siviwe Shongwe & Ilana Erasmus, Directors at Fusion Consulting
An INAC Global Executive Search Partner

South Africa's dual economy – the best of both worlds

South Africa, one of Africa's most developed economies, remains an exciting place to do business. Africa's "Rainbow Nation" continues to defy the expected with its mix of developed and developing economy challenges and unique opportunities.

South Africa retains its status as the gateway to Africa with the strongest transport links into the wider African continent to complement well established routes to market into Europe, America and increasingly Asia. South Africa's 2010 inclusion in BRICS (Brazil, Russia, India, China and South Africa) membership should see these links grow further and increase the opportunities available.

Infrastructure challenges and progress
Like any emerging market, South Africa has its challenges. Chief among themis electricity supply constraints, particularly during the winterseason. Power cuts, locally referred to as "load shedding," are generally predictable and manageable, however.

Whereas South Africa once had a connectivity challenge separating urban and rural areas, high mobile telephony and digital penetration has seen South Africa leapfrog into the digital world, thus overcoming a potential growth impediment. South Africa is also the leading player in connecting the African continent with growing activity in the Middle East and other developing markets.

Sustained political and financial stability
South Africa enjoys healthy democratic political debate, largely predictable electoral outcomes and a stable macro-economic policy, a far cry from South Africa's dark past.

South Africa's high in-flow of portfolio investment is testament to the country's success in building its financial and capital markets, which resulted in its emergence from the 2009 financial crisis largely unscathed. The Johannesburg Stock Exchange continues to provide attractive yield with little real emerging market risk, as even fixed capital investment remains well ahead of other emerging growth markets on the African continent. South Africa is also well-positioned to be an export gate to developed markets for the highly competitive motor manufacturing and component manufacturing sectors, which are linked to South Africa's robust, if at times complex and challenging, mineral and mining sector.

A young and healthier population
South Africa has a growing, young and demographically diverse population that presents growth opportunities for all business sectors. The unique nature of South Africa's population offers interesting market test grounds, as well.

In keeping with its dual nature, South Africa has a world class and well-funded private health care system with local players innovating in first world markets such as the Americas and Europe. On the other hand, it has a strained public health care system which faces challenges in terms of consistent service delivery, but does undoubtedly provide universal access and care. The most vulnerable sectors of the population have seen improved protection through old age pensions and child grants which, while not matching first world standards,provide vital shock absorbers to increasingly unpredictable economic cycles as the global economy struggles to find its equilibrium.

International appeal
Not only is South Africa a gateway to Africa, but it is also the most preferred African state for diplomatic ties with the rest of the world, having one of the highest number of foreign missions. Diplomats often buy second homes in South Africa's buoyant real estate market. This internationalism also makes it an attractive work destination for expats, whose skills are necessary for Africa's continued growth and development. A comfortable year-round climate further adds to the appeal and quality of life that expats and locals alikeenjoy in South Africa.

Siviwe Shongwe and Ilana Erasmus are directors at Fusion Consulting, a majority black- and female-owned executive search firm based in Johannesburg, South Africa, focused on mid-level and executive placements. Fusion Consulting is part of the INAC Global executive search networkorganization.

About INAC:
INAC is a global retained executive search organization, with more than 20 years of experience in fulfilling clients' top talent acquisition objectives. Its more than 80 offices across 45 countries are staffed with seasoned recruitment executives, specialized in diverse fields, who offer exceptional local know-how and highly personalized services. Visit www.inac-global.com or email marketing@inac-global.com for more information on INAC services and its partner offices around the world.

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