BRIC countries can learn from South African good governance


By Thandisizwe Mgudlwa

A new survey reveals that the South African system of governance is among the best in the world.

According to Grant Thornton’s latest International Business Report (IBR), South African businesses face significantly fewer constraints to business expansion than their BRIC (Brazil, Russia, India and China) counterparts.

The Grant Thornton IBR is a quarterly survey of the views of senior executives in privately held businesses all over the world. The report surveys over 12,000 listed and privately held businesses in 40 economies annually.

And the survey has also revealed that while 35% of BRIC businesses experienced shortages in terms of the quantities of orders being placed, this was only the case for 18% of those surveyed in South Africa.

Similarly, 34% of BRIC respondents felt constrained by the prohibitive cost of finance, compared to 17% in South Africa.

While 29% of businesses in the BRIC nations cited the shortage of access to long-term finance as a barrier to growth compared to 13% in South Africa.

And globally, 22% of business executives experienced difficulty in accessing long-term financing and high costs of finance.

David Campbell, CEO of Grant Thornton Johannesburg (2011 World Economic Forum Global Competitiveness Index) says: “The South African economy has been insulated from much of the global market turbulence due, in part, to the country’s top ranked audit and accounting standards, a sound banking system, and well-regulated stock exchange.”

He adds that South African businesses should view this local strength as an opportunity to make progress through long-term investments in research and development (R&D) and equipment that will place companies at an advantage once the developed world moves out of this recessionary period.

The IBR research also reveals that businesses in the emerging markets lead the way in investing for long-term growth.

In addition, the study says 45% of businesses in the BRIC countries plan to increase investment in research and development over the next year, compared to just 18% of businesses in the G7.

Similarly, 47% of BRIC businesses plan to increase investment in plant & machinery over the next 12 months, compared to 37% in the G7.

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