1. 17 April 2013 Universal economic access Grassroots Growth for Poverty Reduction

2.  Local enablers Essentials for growth and jobs State of the nation Global context

3. German Dax and Industrial Production: … Fundamentals not following markets Source: INet

4. S&P500 and Earnings: Liquidity-driven momentum Source: INet

5. QE and the US economy: hiding recession?? Source: INet

6. QE: Short Term and Long Term QE Costs Short term Stabilization Short term Stabilization Long Term Debt escalation Long Term Debt escalation Debt: Systemic Ponzi Debt: Systemic Ponzi Small vs Large Small vs Large QE escalation shortens the long term timeline

7. QE: Central Banks starting to compete? Source: Federal Reserve of St Louis

8. Global debt levels are accelerating May well be developing into a systemic PONZI scheme Systemic collapse Time Debt needed to sustain the system BCA: the debt super cycle Systemic instability Credit worthy capacity Debt Dynamics at the 11 th hour, as governments compensate

9. Excessive debt levels mean financial repression is returning A concept widely understood in the 1970’s Coined in 1973 by Shaw & McKinnon Described EMs financial systems over 1960s-80s. Same for developed economies (WWII to the 1980s) Why is it important? liquidating debt!!!

10. How is Repression achieved? Tools of Repression Inflation/Deflation Fiscal & Monetary Policy Red Tape Corruption Market Dominance Tax (Especially Wealth)

11. …But SA is in a good neighborhood!! African investment risk declining Jurisdiction risk is changing....but Neither Africa nor Europe completely homogeneous Solvency Europe Africa Taxes Solvency Tax Burden

12. Macro-economic outcomes Proof of the pudding Improving economic management Inflation Growth 3.5% 1995 40.1% 2011 5.1% 8.2% 2000 15.0% 3.6%

13.  Local enablers Essentials for growth and jobs State of the nation Global context

14. Business and Consumer Confidence: decade lows Source: INet

15. Retail Sales: losing monentum Source: INet

16. Car Sales: good but cycle has peaked Source: INet

17. SA Manufacturing: Recessionary conditions Source: INet

18. Current Account Deficit: major risk to the rand Source: INet

19. SA Interest Rates: low for much longer Source: INet

20.  Local enablers Essentials for growth and jobs State of the nation Global context

21. Understanding the growth model: Credit & consumption …or…savings & investment Growth Essentials Growth Essentials Investment Savings Red Tape Property Rights Rule of Law Property Rights Rule of Law Investment timelines are important

22. Source: INet Unemployment | 2001 – 2011 Proof of the Pudding!! Brazil unemployment: The Enigma Brazil UnemploymentSouth Africa Unemployment

23. Brazil & SA | Corporate Development Hyperinflation Divergent Outcomes Corporate Concentration GDP Stock Market Capitalization Business Perspective Small Business BRICS and Business Strategy 19861990199419982002 Isolation

24. Indian Business Conditions | In spite of unfavorable macros: complex but thriving IMPROVING BUSINESS CONDITIONS Global Vision Competitive State & Private Sector Entrepreneurship Conglomerate 2 4 1 3 Corporates & SMME mix 5

25. Job creation means employer creation …the scale needs to be understood Jobs Essentials Jobs Essentials Entrepreneurship SMME’s Entrepreneurship SMME’s Household Savings Household Savings Appropriate Regulation Appropriate Regulation Incentives Rent Seeking Incentives Rent Seeking Job creation must be the most important priority Poverty and inequality are consequences of unemployment

26. Jobs, minimum wage and global competition All variables are relevant Employment Vision Employment Vision Price & Value China Germany Japan China Germany Japan Wages/Jobs Tradeoff Wages/Jobs Tradeoff Technology Machinery Skills Technology Machinery Skills

27. Poverty | Slums a manifestation People work where they live Lowers living costs 1 Govt provision of water and electricity Crime rate low 2 Very little town planning Regulatory restrictions low 3

28.  Local enablers Essentials for growth and jobs State of the nation Global context

29. Economy must be accessible at grassroots level …avoid ‘doing things for the poor’ Local Enablers Local Enablers Town Planning Town Planning Microeconomic Reform Microeconomic Reform Policy Priorities Service Delivery Productivity Service Delivery Productivity Cost burden must be competitive Educational Institutions Educational Institutions

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