Chantelle Benjamin
20 November 2008
Johannesburg — A SURVEY of the world's top 65 emerging cities released yesterday shows that SA's three largest cities provided solid business environments for companies seeking global growth.
Johannesburg, Cape Town and Durban are among 65 leading cities driving growth within more than 30 emerging markets.
The MasterCard Worldwide Centres of Commerce Emerging Market Index, which focuses on cities as recognised drivers of economies, found that SA's three major cities were ranked among the top 40 emerging cities, with Johannesburg taking 11th position, ahead of cities in Europe and Asia.
The South African cities came in the first three positions in the business environment category, which assesses the business environment facing companies looking to operate in the 65 cities.
This was seen by the panelists as the most critical dimension defining the commercial importance of an emerging market city.
Anthony West, GM of MasterCard Africa, said the point of the study was to assist business to identify new market opportunities for the future.
"By evaluating 65 emerging market cities and their increasingly important roles in global commerce, the index offers companies a roadmap for where commerce is headed next," West said.
Mike Schussler, senior economist at T-Sec and one of the panelists, said the index revealed not only that SA was Africa's economic powerhouse but that it was the best represented country outside the BRIC -- Brazil, Russia, India and China -- economies.
"This affirms SA's regional pre-eminence, as all three of its cities rank well above the other African cities listed."
He attributed SA's performance to, among other things, the country's well-respected legal system and the ease with which business is able to obtain credit, and register and close businesses.
"SA ranked well in investor protection, which measures the strength of the legal protection afforded to minority shareholders against the misuse of corporate assets by directors.
"The ease with which business can obtain credit is also a real strong point for SA, as again, the laws governing credit extensions here are quite sophisticated and make both the extension and obtaining credit relatively hassle-free," he said.
Johannesburg was ranked third in the financial services environment category, outranked only by Mumbai and Shanghai. Other measures included: the economic and commercial environment; economic growth and development; commercial connectivity; education and IT connectivity; quality of urban life; and risk and security.
Shanghai led the index , followed by Beijing, Hungary's Budapest, Malaysia's Kuala Lumpur and Chile's Santiago.
Fifteen Chinese cities were ranked among the top 30 cities, making it the best-represented country , followed by India, which had eight cities listed .
SA did not perform well when it came to a conducive business environment that looked at the broad economic health and growth of the national economy.
"South African growth should be better, we have a lot of positive policies in place, but the magic 6% growth rate still manages to elude us for now," Schussler said.
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