The world largely arranged itself into the order we know it, following the second world war. Following that the Berlin wall fell, and the world largely settled into a globalisation and industrial age.
There have been many innovations that have changed and shaped the world. There have been a few disasters that shaped the world, like the 2008 world economic crises, and recently the large-scale war in the Ukraine.
These events clearly help us understand that the world is like a type of web, you pull one strand of the web on one end, and the other end of the web moves. Things are more interconnected than ever, and that is why we feel so many global changes in South Africa.
Some of the more significant things that we expect to create change are:
Donald Trump raised tariffs against the world earlier in the year. Most recently, these have been challenged. Erik Larson and Josh Wingrove, record the following for Bloomberg.
“The vast majority of President Donald Trump’s global tariffs were deemed illegal and blocked by the US trade court, dealing a major blow to a pillar of his economic agenda.
A panel of three judges at the US Court of International Trade in Manhattan issued a unanimous ruling Wednesday which sided with Democratic-led states and small businesses that accused Trump of wrongfully invoking an emergency law to justify the bulk of his levies. The court gave the administration 10 days to “effectuate” its order, but didn’t provide any specific directions of steps it must take to unwind the tariffs.
The judges rejected the government’s argument that Trump had authority to unilaterally issue tariffs under a law intended to address financial transactions during national emergencies. The ruling was a so-called summary judgment, meaning a final victory for the plaintiffs in lower court without the need for a trial”.
On the local front, we have more challenges to the budget version 3:
S’thembile Cele and Ntando Thukwana have the following to report on the budget pushback, most notable regarding the fuel levy increase proposal. Which is really just taxation in another form. The public expects budget cuts, wasteful expenditure cuts and reviews. But this has largely been ignored in favour of other sources of hikes and collection.
“South Africa’s fourth-largest political party also opposed a planned value-added tax hike incorporated in previous versions of the budget, which was scrapped in the latest iteration. It sought an urgent court intervention on Thursday to halt the fuel price hikes.
The legal challenge is a potential setback in a messy process that has unsettled investors. The budget was initially scheduled for February, but the planned VAT hike led to a split among members of the country’s 10-party governing coalition, and it had to be reworked.
Godongwana’s latest budget plan got a warm reception from investors and was quickly endorsed by the business-friendly Democratic Alliance, the second-largest member of the GNU, helping the rand outperform on foreign-exchange markets.
The planned levy increase of 16 cents per litre for gasoline and 15 cents per litre for diesel, effective from June 4, is among measures the minister put forward to plug the revenue gap left by abandoning the VAT hike.
The EFF wrote to Godongwana, arguing that raising the fuel levy would hurt the poorest South Africans and undermine economic growth. It also said he acted unlawfully by failing to introduce a new tax through a money bill”.
The global power shift will continue:
Expect that the order of the world, established following the second world war, will change. New economies are building through India and Africa. These will rival and stand up to previously Southeast Asian countries. Technology will undoubtably change things as it always has.
This change can be unnerving, but as always, our industry will remain informed and be reactionary to the changes for the benefit of investors.
Not all change is bad. It may just be a bit uncomfortable along the way.
As with all things, it’s the choices we make about change that bring either benefits or disbenefits.
We continue to embrace change and work with it, to shape our futures.
