1. The debate on weather Brazilians can legally carry weapons is again all alive In 2005, more than 63% of the Brazilians voted against a law which would prohibit weapons to be sold and carried.
    I would have voted for the law (to abolish free carriage of weapons) in 2005. Today, I would vote against it. There is a rational for allowing people to carry guns, that is registered guns. Almost all murders and kidnappings in Brazil are done by illegal guns.  Actually, in the Southern Brazilian states, where there is the highest number of legal guns per citizens, only 59% of all murders were caused by firearms in contrast to 70% in the Northeast where there is the lowest number of legal firearms per citizen.

    Just look at South African Farmitracker to understand why you would want to carry a gun nin South Africa.
    attacks on white south africans

    The core discussion should not be focused on posession of guns, rather the sales and traficing of illegal weapons.
    Yesterday the South African National Conventional Arms Control Committee (NCACC) announced that South Africa sold R 70 million of arms to Libya in 2010.  The South African government approved in 2010 the sale of a whopping R 35 billion of military hardware to 78 of the world's most repressive regimes; exports included: Algeria (R 158,3 million), Azerbaijan (R 119,1 million), Burundi (R 119,1 million), Equatorial Guinea (R 5,8 million), Pakistan (R 34,6 million), China (R60,5 million) and Saudi Arabia (R 68,2 million).The production capacity of South Africa in the illegal arms dealing within Africa is just absolutely mindblowing. The map below says it all: why don't the US and Europe stop all export of weapons and ask other countries to do the same? A worldwide ruling that handguns and rifles cannot be exported by any country. Each state can produce their weapons themselves.

    weapons









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  2. The term BRICwas invented by Jim O'Neill of Goldman Sachs in 2003 to identify countries with the fastest growing economies with a bulging middle class and promising internal markets that were likely to overtake the G7 (the US, United Kingdom, France, Italy, Canada, Germany and Japan) as the biggest economies by 2040.
    It's important to remember the the term (it was merely a name) was invented to identify the countries which would lead the ranks of biggest economies by 2040. Since then some variations have surged: BRICK (K for South Korea), BRIMC (M for Mexico), BRICA (Arab countries: Saudi Arabia, Kuwait, Bahrain, Oman, United Arab Emirates) and BRICET (including Eastern Europe and Turkey).

    In 2009, the BRIC forum was founded in Yekaterinburg, Russia. It's a very informal platform to share views on globalization. President Zuma of South Africa, always eager for status rather then internal policies, was not happy with the fact that he was not invited to the BRIC forum. Ever since then South Africa has sought to gain recignition as part of the BRIC formation. A redicilous quest in itself. On August 25th, in Beijing, Zuma drafted an official letter(read: Financial Times):>Dear Sir/Madam,
    I would like to apply, on behalf of my country, to be the firth Bric member. I think my country would be suitable for the role -providing an economy we hope wil grow at 7% per year, rich in natural resources and a base for exploring other emerging markets in the region...

    We are also benefiting from recently hosting a major international sporting event. We thi,k that makes us a good fit with China (Olympics 2008), Indian (Commonwealth Games 2010), Russia (Winter Olympics 2014) and Brazil (World Cup 2014, Olympics 2016).

    Although not a barrier to entry, we are also a democracy with freely exchangeable currency, widespread use of English and a diverse population. Plus we could provide the wine for all meetings.

    I do hope you will consider us for entry into your club.

    Many thanks,
    Jacob Zuma,President of South AfricaThe Chinese must have laughed and seen there occasion...
    Last week, Beijing gave an OK for Zuma to attend a summit of BRIC leaders in April.
    As Marvin Zonis of University of Chicago puts it:
    "This is something that China sees in its own interest with its aim of understanding the future of Africa and becoming an even bigger presence there. It is really smart on the part of China to do this.
    O'Neill, the economist who have birth to the term BRIC says radically that South Africa should not be included,read this excellent piece in the Financial Times on the matter.
    Also many African journalists are critical, as one can read in the SA Times and this excellent piece fromFrancis Kornegay.The reality of course is that nothing fundamental will change. Zuma can bring his wine to the next BRIC forum in April 2011, China will use every chance to abuse South Africa in every way it can, and the letterword will remain BRIC.

    Just look to the top 10 companies in the world by market capitalization, all of them are based in BRIC countries: Russia: Gazprom, Lukoil and Surgutneftgaz
    China: China Mobile, China Construction Bank
    Brazil: Petrobras and Rio Vale Doce
    India: Oil and National Gas Corp

    No South African company to be seen from far.

    Let's just look to the list of countries with their respective nominal GDP in 2050:
    All the 4 BRIC countries are in the top 6, if one includes Mexico (which be a much more evident fifth member than South Africa), the BRIMC countries would be the absolute top 5 countries by GDP, except for the United States.
    This is what BRIC is about. South Africa even doesn't appear in the top 22 list. Countries by GDP in 2050 This brings us to the core of the matter: South Africa not only has amuch smaller economy and very limited market, it also lacks national commercial champions like Vale, Petrobras, Gazprom, China Mobile,... to command the same strengths as the BRIC countries. South Africa doesn't have and will never have these hard resource and infrastructure powers. South Africa champions in its normatively grounded and progressive foreign policy, tackling poverty, climate change. South Africa was strong the last decade in conformity to international law, consistency in policies of the African region and issues related to human rights and commitment to multilateralism.

    Furthermore, South Africa was the pioneer of IBSA (India, Brazil, South Africa). They discuss matters like strengthening multilateralism, the reform of the United Nations Security Council, the Bretton Woods Institutions, democracy and a people-oriented approach, human rights and sustainable development.

    This raises the question: why would South Africa seek to participate in the BRIC forum? And as a consequence diluting its normative character and a unique role it plays as a bridge builder between the North and the South? South Africa already has a resource overstretch participating in groups and forums of all kinds? Will this entry signal the end of IBSA? And what about South Korea entering (place 13 in nominal GDP by 2050), or even Nigeria (place 11 in nominal GDP by 2050)?

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  3. As was expected by most analysts, South Africa's GDP shrank in the second quarter of this year at an annualized rate of 3% over the first quarter as compared to the 6.4% rate seen in the first three months of the year. This is one of the steepest contractions seen worldwide. Especially agriculture was a serious disappointment, with a 17% drop in Q1.

    The unemployment now raised to a total of 29,7% (28,4% in 2009). Also worrying is that retail sales decreased in June by an annual 6,7% following by a drop of 4,4% in May. The mix of people being worried about job security, high levels of household debt and still high inflation is is a deadly one. What is wost worrying is the inflation which remains extremely high.



    The year-on-year CPI inflation rate was 8. 1 per cent in January 2009. It then rose to 8.6 per cent in February before declining marginally to 8.5 per cent in March Inflation in the first quarter of the year was driven mainly by increases in food prices, alcoholic beverages, household maintenance and repair, electricity, and in financial services. Since that time the inflation rate has fallen back slightly - from 8.0 per cent in May 2009 to 6.9 per cent in June - but given the extended recession and the low levels of capacity utilization this rate is still noteworthy for its size. Electricity prices in South Africa went up by 28,6%. Inflation of 6,9% is a headache for the SA Central Bank. The bank already lowered its repurchase to 7 percent. Governor Tito Mboweni said in a televised statement after the monetary policy meeting that the decision to reduce rates had been a “very closely debated one”, and it seems unlikely that further rate cuts will follow rapidly. The South Africa rand has climbed 21% this year against the dollar. This is mainly due to the inflow of so called carry traders from Europe and the US. But is this impressive performance of the ZAR supported by the underlying macro fundamentals?

    Negative growth, depressed confidence and steadily rising unemployment certainly do not make it look like it is. “We are deeply concerned about a permanent decline in productive capacity as factories close rather than simply reduce output,” Patel said to the South African Parliament, "Manufacturing output has been declining since mid-last year. It has now reached levels last seen some five years ago.” All of which naturally enough feeds directly through to the pretty substantial current account deficit.



    The growing pressure on the fiscal side will be enormous. South Africa’s borrowing needs are likely to double the government’s projection according to estimates from JPMorgan Chase & Co. Government borrowing may surge to 183 billion rand (22,4 billion US$) in the 2009-10 fiscal year to cover spending, compared to the budgeted 90,37 billion budget. This would increase the budget deficit to 7,4% of GDP, compared to the forecasted 3,8%.

    Read the full report here.

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  4. The Brazilian articles have moved to a new section which you can find here: Brazil economy updates.

    Meanwhile in South Africa things are deteriorating.
    This weekend The Times reported on recent water tests in Durban where more than half of the tests did not meet health standards.
    “It shows this water is not protected and organisms are growing at a hell of a rate.”

    Meanwhile a business man offered Zuma 1 billion Rand to buy satellite equipment, computers and helicopters for regular patrols - they would be available to police all over this country. The business man sees crime as the biggest threat to South Africa and right he is. But a "donation"? There's nothing like "Cash in the table"..or should I say, "There's never a thing called Free Lunch". What's the catch? Surely a man cannot just wake up and think about donating R1 billion to the state...the devil is in the details.
    Readers wonder who'll be able to operate this tech material, the army already doesn't have people to operate or maintain new boats, U-boats and planes.

    Also, let's not forget that last February Zuma and the ANC abolished the Scorpions, South Africa's elite corps who was investigating the ANC.

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  5. I'm sceptical on South Africa's short and mid-term future, that's no secret. The whole African continent is facing an enormous economical backlash. There will be a public deficit of 5,4% in 2009 compared to a surplus of 2,8% in 2009. The commercial balance is dropping from a surplus of 2,7% in 2008 to a deficit of 4,3% in 2009. Already today the South African public health system, on which 90% of the South Africans depend is falling apart.
    But the real big issue of South Africa will be the influx of immigrants.

    South Africa is unlike Brazil not a multicultural country. Different ethinic groups live next to each other and not with each other. When I address a black chief of staff of South African Airlines in Joburg and I stand on my rights without insulting the woman, she immediately threatens me not to be racist. The effect of "reverse racism" is absolutely stunning these days in the country.

    And now there's an absolute blockbuster movie which will appear later this year which is taking place in South Africa and uses a metaphor to dig up the whole issue of racial seggregation, apartheid and intolerance in South Africa: District 9.
    Neil Blomkamp is the director. He is a South AFrican born, Vancouver based director. I got know him in 2005 through these shortmovies: "Alive in Johannesburg".

    For District 9 (which will be released on August 14th in South Africa and North America, later this year in Europe), Neil Blomkamp teamed up with Peter Jackson through and Jackson's production company, WingNut Films. Sony Pictures Entertainment picked up the North American distribution rights for District 9 which will mark Blomkamp's feature film directorial debut. Peter Jackson is the producer of the Lord of the Rings, Crossing the Line,... so expect District 9 to become a blockbuster.

    The setting is South Africa and the metaphor both producers use in District 9 is as suble as a brick to the head: "Look: South Africa ! Apartheid ! Racial Segregation and intelorance !"

    Below two trailers: the first one is the edited one for Apple Trailers, the second one is the unedited one with the translation of the answers of the aliens (messsage: just like the Zimbabwen immigrants, the Aliens they have no bad intentions).

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  6. South Africa is flooded by poor economic data. First, South Africa’s purchasing managers index plummeted to a record low of 39.2 points in February 2009.
    Secondly, a disastrous month for the motor manufacturing industry as February new passenger vehicle sales plummet further. The industry is on the brink of collapse and is hoping for R10bn from government to keep it going.
    And the thirdly – a disappointing January 2009 trade deficit has sent the rand into freefall against the Euro and dollar. This is in sharp contrast with Brazil posting a trade surplus in February.
    This means inflation will go up again in South Africa, which will firther weaken the Rand. I have been warning for more than a year now how South Africa's trade deficit is a serious problem. Customs and Excise reported the January 2009 number at R17.380bn – the weakest on record – and a fair margin worse than the previous R14.7bn ‘low’ recorded in October 2007.

    With this new inflationary pressure, you can expect that there will be no immediate further rate cuts in South Africa. The South African prime rate is still 14,00% !! Meanwhile in Brazil, the comparable SELIC rate which is at 12,75% will highly probable be dropped to 11,75% this week. More importantly is that in Brazil the spread charged by the banks is also going down; I'll write on this later this week.

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  7. Only yesterday did I publish this article stating my scepticism on South Africa; one of my arguments is the complete lack of private saving rate in South Africa; something where the government cannot easily act upon. Still South Africans believe they can spend themselves out of trouble and the economic prospects that finance minister Manuel Trevor announced last week are called "heroic" (an ephemism for 'naive').

    And just today did I discover this new report which the IMF just published on South Africa, titled: "Why Isn’t South Africa Growing Faster? A Comparative Approach", 25 pages long and a must-read.
    Bear with me for the conclusions:

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  8. After last weeks update on the South African economy and real estate market, the figures of the Plettenberg Bay Property market show a further drop of 4,8% in the real estate prices for January only. The 2009 South African real estate prospects are a further decline until early 2010.

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  9. Remember the civili violence in South Africa during the month of May 2008? 20.000 foreigners had to be displaced and 60 were killed, mostly in Gauteng, where the violence started.
    A report from Johannesburg University of Witwatersrand now warns that such violence will rise again. The report warns that civil violence will soon rise again and that neither government nor civil society is ready to provide effective protection.

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