Class XVI international seminar trip Reports February 15-27, 2014

.

"World DataBank." The World Bank DataBank. Web. 09 Dec. 2013. .

 "USDA ERS - State Fact Sheets." USDA ERS - State Fact Sheets. Web. 11 Dec. 2013. .

 "GOV.UK." South Africa Travel Advice. Web. 11 Dec. 2013. .

 "Cost of Living." Cost of Living. Web. 11 Dec. 2013. .

"South Africa: Tipping & Etiquette." - TripAdvisor. Web. 11 Dec. 2013. .

South African Economics

Justin Whitmore
South Africa’s has the largest economy in Africa with a nominal GDP of 375.9 billion. South Africa has the highest per capita GDP in Sub-Saharan of $11,750. Despite this they still deal with wide spread poverty and unemployment. South Africa has a diverse economy some of its main sectors are mining, agriculture, manufacturing, and tourism. There are many positives to South Africa’s economy including large reserves of natural resources including diamonds discovered in 1867 and gold and many other minerals which account for a majority of South Africa’s exports. The agricultural sector in South Africa is also strong accounting for about 10 percent of employment. While South Africa does not have an overly strong manufacturing industry due to relatively high labor cost it is still an important part of the economy with about 13 percent of employment. Tourism is also a very important part of the economy guest come to South Africa for the culture, game reserves and excellent local wines. Despite all these positive indications just like much of Africa, South Africa still has deep economic problems including poverty, unemployment, economic inequity and crime. These issues must be address before South Africa will be able to bring their economy and population into the 21^st century. South Africa’s unemployment rate is over 25 percent with a real unemployment rate of 35 percent when accounting for people who have stopped looking for a job. A large portion of their population lives on less than $1.25 a day. Along with poverty and unemployment many South African see crime as a major hindrance to economic growth slowing private investment. Violent crime including murder, rape, and hijackings are a major problem. Fraud is also a major contributor to the affect that crime has had on the economy. The police and government officials have tried to improve the problem but corruption and general ineffectiveness have hampered efforts to improve the situation.

Mining

South Africa has long depended on the mining industry as a driver for economic growth since the discovery of diamonds in 1867 and the discovery of gold a few years later marking the beginning of a large and diverse mining industry. South Africa mining industry accounts for only 18 percent of GDP but accounts for more than 60 percent of exports and employees almost 600,000 people. South Africa’s mining industry accounts for 77 percent of the world’s platinum production and the world’s third largest coal exporter. South Africa also produces large quantities of kyanite (used in ceramic products) and other materials, chromium, palladium (mostly used in catalytic converters), vermiculite (used for parts in aluminum smelting because its ability to standup to high temps), vanadium (mostly used as a steel additive), zirconium (mainly used in the production of opacifier’s), manganese (mainly used in stainless steel production), rutile (used in coloring paints and pigments), ilmenite (used in coloring paints and pigments), gold, and fluorspar (used as a flux for smelting).

Agriculture

Agriculture is a major part of the South African economy accounting for about 10 percent of employment and 2.6 percent of GDP. However, agriculture accounts for less of South Africa’s economy than other Africa nations. This is substantial considering that only 13 percent of South Africa’s land area is considered arable. The main constraint on the agricultural industry in South Africa is a lack of water. South Africa has a very diverse agricultural industry ranging from high intensive crop production in areas with abundant rain fall and sheep herding in arid regions. Corn is the number one crop but South Africa produces many other agricultural commodities including poultry, beef cattle, wheat, milk, fruit, vegetables, and sugar cane. With this wide variety of agricultural production South Africa is not self-sufficient in the production of most staple crops. However, South Africa exports many crops, such as pineapple, and is able to export more crops then it needs to import. One aspect of agriculture that is sometimes overlooked, but South Africa is uniquely suited for, is game farming. South Africa has a wider variety of game species than many countries. Another growing agricultural industry in South Africa is aquaculture. Some of the species grown are mussels, trout, tilapia, catfish, oysters, and waterblommetjies (which is a flowering watering plant). South Africa also leads the world in ostrich products with 65% of world sales including leather, meat and feathers. Farmers in South Africa take advantage of a large number of agricultural cooperatives to help improve competiveness.

Manufacturing

South Africa manufacturing industry is a major contributor to the South African economy providing 13 percent of the jobs and 15 percent of GDP. The manufacturing industry has an advantage in the fact that labor costs are low but not as low as other comparable markets. The cost for transportation and general living also negatively impacts South Africa’s ability to compete in the global manufacturing industry. One of South Africa’s most important manufacturing sectors is the automotive assembly. The automotive industry accounts for about 10 percent of South Africa’s manufacturing exports. South Africa’s automotive manufacturing assembles vehicles and parts for local markets and other important markets in Africa. Despite their distance from major markets they are able to produce quality products that are price competitive with other assembly centers. South Africa is working to grow their automotive vehicle and part assemble sector. They already have production plants for BMW, Ford, Volkswagen, Daimler-Chrysler and Toyota along with many vehicle parts manufactures. The South African automotive industry produces about half a million vehicles annually and employees over 30,000 people. South Africa other major manufacturing industry are agri-processing, chemical manufacturing, ICT and electronics, metals, textiles clothing, and footwear.

Tourism

South Africa’s tourism sector consists of several key areas of adventure and exploration, culture and heritage, safari and nature, entertainment and lifestyle, and relaxation. South Africa has over 860,000 visitors monthly of which 210,000 are from outside Africa. Tourism is a major contributor to the South African economy supporting 10 percent of jobs and adding $102 billion to the economy. In South Africa, the tourist industry is targeted as one of the key industry to help to drive the economy for the next two decades. In the past, the majority of businesses catering to tourism were owned by the white minority. In recent years, the government has started to support programs that support and promote the growth of black owned tourism enterprises. Their main efforts have been aimed at growing these businesses on the small scale.

Exchanging Money

The exchange rate to Rands, the South African currency, is about 10 rand or zar to the dollar. It is very easy to exchange money. Exchanges can be done at the airport and in most of the larger cities in South Africa. However, the best way to make the exchange is to do it at your local bank to receive the best rate of exchange. Money should only be exchange with reputable vendors. Exchanging money on the street in most cases is illegal and not worth the risk of getting robbed. It is also a good idea to contact you credit card company to inform them that you will be traveling to South Africa. This will insure that they do not stop payment making your card unusable in an effort to stop fraud. Visa and Master Card are the most accepted cards; however, credit cards should not be solely relied upon because they may not be excepted everywhere. There will also be opportunities to use ATMs in the large cities for a fee that will vary depending on the bank. Traveler checks in US Dollars are accepted in Africa and can be replaced if stolen but to cash them you have to find a bank that is willing to take them. Cash should always be carried and US Dollars may be accepted in some places. However, some places that take US dollars they will only accept ones printed after 2003 because they are harder to counterfeit. Money belts are the safest way to carry money but also a bag or wallet is useful for carrying money you will spend that day and are easily given up if robbed.

Sources:

Economic overview

http://en.wikipedia.org/wiki/South_Africa#Economy

http://en.wikipedia.org/wiki/Economy_of_South_Africa

http://www.southafrica.info/business/economy/sectors/agricultural-sector.htm#.UrjehjOx7I

http://www.southafrica.net/country/us/en/

http://www.arc.agric.za/Pages/Home.aspx

http://goafrica.about.com/od/africatraveltips/a/money.htm

Non Internet

GeoJouranl. Transforming the South African tourism industry

South African Economic

Karen Eifert Jones
South Africa is a developing country with many economic problems and unique business operations. I will first discuss a few of the unique characteristics. Then, I selected two areas to discuss in detail in this paper: land redistribution and obstacles to development. These are two areas that I feel we must be aware of to fully understand the businesses that we will visit on our tour.
WORKFORCE AND CULTURE

There are a few key pieces of information we should grasp before looking at the two specific areas. The current government, known as the African National Congress (ANC), is generally understood to represent the Black majority. Agricultural activities range from intensive crop production, fruit production and mixed farming to cattle-ranching and sheep-farming. Only about 12 percent of the surface area of the country can be used for crop production. In 2012 the population was 51 million and GDP was $384.3 billion with a growth in GDP of 2.5 percent. GDP is still recovering from the crash in 2009. Inflation was 5.4 percent in 2012 compared to one percent in the US.

The African culture is very hospitable (I am told if they invite you come for a visit, they really mean for you to visit) but there are differences from our culture. To successfully conduct business, one must understand these so I thought we should look at a few of them. There can be a number of ethnic and racial divisions in the South African workplace. There are not just white South Africans but rather English or Afrikaans. There are not just black South Africans, but Zulu or Xhosa. They have 21 recognized languages. People from different groups do not automatically work well together. We must keep this in mind as we visit people from these different groups so as not to offend.
Business meetings might flow differently than we are accustomed to. Final decisions are usually made by one person but the decision making process often incorporates everyone and will typically take longer than ours would. In conducting business, we might push for decisions but pressing for an answer can be insulting and counterproductive. Deadlines are remarkably fluid in South Africa, often seen as more of a guideline than a set time. (I think I may have this South African trait!)
LAND REDISTRIBUTION

One of the most controversial issues within the country, especially with farmers, is that of land redistribution. The apartheid system began about 100 years ago. Apartheid by definition is a “segregated political system.” It was in place from 1948 through 1994. With the passage of the Native Land Act in June 1913, atrocities against South Africa’s native population were legalized. In the land reserved for blacks, various tribal groups were forcibly settled in a segregated area. Many times they were used as labor with little or no pay. It was similar to the share cropping experience of Black Americans just after slaves were freed.

President Jacob Zuma spoke on the 100^th anniversary of the Native Land Act on June 19, 2013. He said, “a great wrong was done that needs to be followed up with a great right. The pain of being driven off of one’s land is worse than anything one can imagine.” This is a view broadly shared by Blacks in South Africa. Many White South African farm laborers have passed through our area in the past few years. There is also a significant population of former South African farmers in the panhandle area. Sadly, they say the same thing about the land redistribution program that is going on now. The original change of land ownership had begun in 1913, just six years after Oklahoma was granted statehood. How would we feel if the government came to us now and said, “a great wrong was done when the land was taken from the Native Americans and it needs to be followed up with a great right, so you must give up your farmland and homes.”? An attempt to undo something wrong that was done so long ago, doesn’t always feel right to everyone.
The process of redistribution has seemed to be settling large groups of relatively poor and inexperienced people on large commercial farms and expecting them to manage those farms effectively. This has clearly failed. There is a feeling that less emphasis should be placed on production for the market and more on meeting household food needs. However, this will have a significant negative overall impact on the economy of the country and its ability to feed the masses. It would be like taking 160 acres of my productive farmland and converting it into large gardens to feed four families. They might find themselves better off but the state and country would have less ability to feed everyone or have commodities for trade.
The South African constitution allows for expropriating property even in cases where the owners of that property are unwilling to part with the property if the expropriation is aimed at redistribution and to address the effects of widespread colonial and apartheid-era land dispossession. (According to Pierre de Vos, Professor of Law, University of Cape Town) This succession of property rights should frighten us and it is something we should guard against in our own country. The South African ruling government feels that “inherited inequalities in access to resources, especially land, is a continuing injustice.” This reminds me of something Franklin Delano Roosevelt or Barrack Obama might have said.
There are many misconceptions floating around about what has or has not been done since 1994. For example, 25 percent of all land is owned by the government so only 75 percent is privately owned. When figures about land ownership are referenced, the publicly owned land is sometimes calculated as Black owned and sometimes as White owned. Also, restitution has been paid out in cash to claimants who chose to accept cash rather than having land returned to them. This is often not taken into consideration when the stagnant progress is reviewed. Rarely does anyone take time to look at the relative value and/or productivity of the land that was distributed.
It is crucial to the economic stability of the country that the farmland remains as productive as possible, regardless of who owns or operates it. In the past 15 years, the number of farmers has dropped by half and conversely the farm size has increased. This indicates farmers have found it necessary to expand their operations considerably in order to benefit from economies of scale that allow them to remain productive. At the same time, markets in urban areas have been expanding. In 2010, 62 percent of South Africans lived in urban areas. The government aims to transfer 30 percent of the 82 million hectares.
OBSTACLES TO DEVELOPMENT

South Africa has long been characterized as an economy that has built a comparative advantage in resource based products. While South Africa has significant cost advantages in many products, they are generally also characterized by large scale economies which mean high levels of concentration and market power. This is especially true given their transportation costs and lack of regional competition. This is not a bad thing, although it is often characterized that way.

The ANC government is viewed as rather ineffective when it comes to true change. They can identify the problem and often even the solution but are ineffective at implementing that solution. As growing leaders, I think we should shudder at this reality. In any business or government, that is the beginning of the wreck. It is like knowing we need to apply the brakes when a train is crossing the tracks but being unable to do so.
CONCLUSION

To get the most from our visit, we must understand the cultural differences and how they impact the workforce. Because agriculture is disproportionately land based, we must understand land redistribution in order to see the potential impact. And finally, we must see the obstacles to development. As I researched this paper I found that we will be visiting an incredibly interesting country with a corrupt and crime laden government.

Sources:
Personal Interview – Nick Vos, Native of Menses, South Africa

Now US Citizen farming in SW Kansas

Personal Interview – Mathew Johnson, Seaboard Farms

Frequent South African Travel and Business

Rebranding the Democratic Alliance, Mail and Guardian, Series 2, April 23, 2013,

2013/2014 Budget Speech, President Jacob Zum




Transportation, Communications and Infrastructure
Jamie Doyal

Steve Alspach

Casey Sharber


South Africa

Transportation, Communications, and Infrastructure

Steve Alspach, Jamie Doyal, Casey Sharber
Transport Infrastructure of South Africa

This report will focus on the infrastructure in place throughout South Africa that is used to transport the diverse agricultural commodities produced in the country. It will focus on 4 primary modes of transport 1) Rail, 2) Roads, 3) Shipping and 4) Air transport.

South Africa, with its’ land mass of 471,443 square miles, is approximately the size of the states of Texas, California and Pennsylvania combined. This report will compare and contrast the amounts and types of transport facilities between South Africa and those 3 states.

South Africa is populated by approximately 51.2 million people (approx. 110/sq. mi.) while the states of Texas, California and Pennsylvania have approximately 77 million people (approx.. 160/sq. mi.).

The United States is the 2^nd largest export country in the world based on dollar value while South Africa ranks between 35^th and 40^th in the world.
The Rail System

The first rail line in South Africa was completed in 1860 so the rail industry there lagged behind the industry in the United States by about 30 years. There are approximately 12,000 miles of track in the South African rail system. Tracks stretch over nearly the entire country but the highest concentration of lines are around the Johannesburg and Pretoria area found in the northeastern part of the country. The transport system is government owned and is operated by a government owned corporation called Transnet. The rail system is operated by a division of Transnet called Transnet Freight Rail. Freight shipping on the rail system is somewhat limited by the fact that the majority of the rail lines are constructed of narrow gauge track. Narrow gauge track is 14.5 inches narrower than standard gauge which reduces its’ usefulness for hauling freight. The current capacity for rail freight is approximately 200 million tons per year. This accounts for approximately 12 percent of the freight moved in South Africa. In 2012, South African President Zuma announced a major capital investment plan designed to increase the freight rail capacity to 350 million tons per year. The plan is designed to reduce the cost of doing business within the country and to create jobs. Commuter traffic is a very large portion of the rail system in South Africa. Approximately 2.2 million people per day travel by rail within its’ borders. There is only one high speed train, the Gautrain, servicing Johannesburg, Pretoria and Tambo International Airport. Approximately 40,000 people use this service daily.

By contrast, the states of Texas, California and Pennsylvania have approximately 20,000 miles of track and in 2011 transported a combined volume of 727 million tons of freight. In the United States approximately 40 percent of all freight is moved by rail, according to the Federal Railroad Administration. Commuter rail traffic in these three states numbers about 240,000 passengers per day, roughly 10 percent of the daily traffic in South Africa.
The Road System

South Africa has the most extensive road network of any country on the African continent with approximately 464,000 miles of maintained roads. The most highly developed roads are called ‘national roads’ and are similar to the interstate highway system found in the US. There are roughly 10,000 miles of national roads in South Africa and they are maintained by the South African National Roads Agency (Sanral). According to Transport World Africa a whopping 88 percent of all freight in South Africa is moved by truck making the road network there a very important resource.

By contrast, the states of Texas, California and Pennsylvania have approximately 2,718,000 miles of maintained roads and approximately 7,600 miles of interstate highways. In the US, trucking accounts for approximately 60 percent of all freight movement and for approximately 12 percent of all exports being moved out of the country.
Seaports

Eight major commercial seaports are located in South Africa. Richards Bay and Durban in KwaZulu-Natal; East London, Port Elizabeth and the Port of Ngqura in the Eastern Cape; and Mossel Bay, Cape Town and Saldanha in the Western Cape are operated by Transnet National Ports Authority (NPA) and handle approximately 96% of all exports leaving from the country.

Texas and California boast several large seaports while the United States is one of the largest importer/exporter countries in the world. The state of Texas alone has the ports of Beaumont, Brownsville, Corpus Christi, Freeport, Galveston, Houston, Orange, Port Arthur and Texas City. The port of Houston is the 2^nd busiest port in the US and is 12^th busiest in the world. California has 11 public ports. Los Angeles, Long Beach and Oakland are considered megaports and handle over one quarter of all container cargo in the US. California also has 8 smaller ports located along its’ coastline.
To contrast the percentage of export cargo leaving the United States via shipping ports is approximately 73 percent. The United States is roughly 8 times the size of South Africa in landmass but exports about 15 times the amount of cargo than South Africa, in terms of value.
Airports

South Africa boasts seven international airports and several smaller domestic airports. OR Tambo International Airport (Johannesburg), Cape Town International Airport and King Shaka International Airport underwent 20 billion rand upgrade before the 2010 World Cup. All airports are managed by the Airports Company of South Africa (ACSA). According to ACSA, the airports they manage handle more than 200,000 aircraft landings and approximately 18.6 million passengers total annually. OR Tambo International Airport in Johannesburg is by far the busiest airport in South Africa handling more than twice the number of flights and passengers than any other airport in the country. Approximately 4 percent of South African exports are flown out of the country. Much of the air freight is fresh produce that is sent to China.

Texas has 13 international and 12 smaller regional airports. California has 9 international and 20 smaller regional airports. Pennsylvania has 5 international and 10 smaller regional airports. These 3 states combined have nearly 4 times the number of international airports as South Africa.
Federal Aviation Administration numbers of the 100 busiest airports in the US show that California has 11 of the busiest airports that handle approximately 85 million passengers annually. Texas hosts 7 of the busiest airports in the US and handles approximately 66 million passengers annually. Pennsylvania has 2 of the busiest airports handling approximately 18 million passengers annually. Combined, these 3 states carry approximately 169 million passengers annually or roughly 9 times as many passengers as South African airports.
The first three nights of our trip we will be staying at the Garden Court Nelson Mandela Boulevard which is only a 15 minute drive from the Cape Town airport. The first thing most people what to do when they arrive somewhere is send notification home to let loved ones know they have made it safely to their destination.
Communications

One of the main obstacles when traveling abroad is being able to communicate with family and friends at home without racking up huge phone bills. There are several options, which include calling, emailing, and texting. Another obstacle is using electricity without ruining your appliances. Converters/adapters will be needed in South Africa.

There are five cellphone providers in South Africa. The only one most of us may have heard of would be Virgin Mobile. 3G is available in larger urban areas. According to www.southafrica.info/travel, “you will be able to use your phone in South Africa if as long as your phone is a triband or fourband phone, is unlocked, and takes a SIM card. Make necessary arrangements with your service provider before leaving your home country. You will need to activate international roaming.” It appears that most of the 3G and 4G phones are tri-band or quad-band. “Just because you buy the right type of phone for the network and country where you plan to use it, doesn’t mean it will work. Mobile phone networks in many countries have made it more complicated. They’ve decided they only want you to use the phone that you bought from them on THEIR network. So, they sell phones that are “locked” to their network and cannot be used on anyone else’s network, unless you can “unlock” it” www.calibryze.com. AT&T will not unlock your phone if your phone is not paid for or you are under contract with them. To use your phone overseas, you will need to either have it unlocked and purchase a prepaid SIM card in the country being visited or contact your wireless carrier to turn on international roaming. With an international package, you can call, text, or email from your phone. These packages can be pricey. AT&T has the following international plans:




I wasn’t able to find similar plans for Verizon or US Cellular. Another option is to rent a cell phone from the airport.
According to www.southafrica.info/travel, “Telkom has placed public telephones at major tourist sites across South Africa. Coin-operated phones are blue, while card phones are green, and both are user-friendly and compatible with hearing-aid devices.” On previous international trips, I have purchased a calling card prior to leaving and used it at public phones. Our country code is 1. To make an international call, dial 001 followed by the area code and phone number.
As stated by Danielle Whaley, OALP Class XV, “the best way to communicate (internationally) is through Viber”. This is a free app that can be used to call or text for free. She said texting is best with this app. Although it can be used for calling, the calls are often dropped and there is a delay over the phone. We used Viber while she was in Brazil and it worked great. We were able to text as quickly as if she were at home. We were even able to send pictures through Viber; although, Danielle said it was quicker to email pictures than to send them through Viber. Viber is compatible with most smart phones. If you keep your phone on airplane mode, you will not receive calls or texts, but Viber will work anywhere we have WiFi. FaceTime and other free apps that are available will also work with WiFi. All of our hotels offer a limited amount of free WiFi. There are also several internet cafés in South Africa’s bigger cities.
Electrical

Electricaloutlet.org has information on outlet types and voltages around the world. The Type M plug has three circular pins and has been adopted as the standard plug in of South Africa, although some hotel rooms contain various type plugs for their international travelers. Types C and G plugs may still be found in some areas.