Globalization and its effect on the South African economy and the JSE securities exchange
1. Introduction
"Globalization refers to the shift toward a more integrated and interdependent world economy." [Hill, 2003: pg6] South Africa provides a unique opportunity to observe the effects of globalization in that the pre democratic period was a period of very little globalization, which can be contrasted with the democratic period which has been characterised by rapid globalization. This sharp contrast emphasises the effects that globalization has on a country.
The essay is a longitudinal study that seeks to understand the impact of globalization on the JSE Securities Exchange, since the democratic elections in South Africa. Firstly this essay will analyse the impact globalization has had on South Africa in general. Then the essay will analyse the effect it has had on South African monetary policy. Further to that it will then analyse the challenges that globalization poses to South Africa. Then there will be more specific analysis on the impact of globalization on the JSE securities exchange. This section will seek to discuss the characteristics of an efficient securities exchange. Comparing the JSE to this will make it possible to determine the effect that globalization has had on the securities exchange and how this has affected the markets efficiency. Then the challenges of globalization facing the JSE will be discussed. This section will try to identify key issues facing the securities exchange, and possible solutions that the exchange can take to cement its place as efficient and reliable worldwide market.
2. The Impact of Globalisation on South Africa
Before discussing the impact that globalisation has had on South Africa, the extent of globalisation in South Africa must first be established. Globalisation's impact goes beyond economics to cultural, social and political influences as well. A comprehensive globalisation index is calculated by Foreign Policy Magazine, which includes the level of economic integration, technological connectivity,
"Globalization refers to the shift toward a more integrated and interdependent world economy." [Hill, 2003: pg6] South Africa provides a unique opportunity to observe the effects of globalization in that the pre democratic period was a period of very little globalization, which can be contrasted with the democratic period which has been characterised by rapid globalization. This sharp contrast emphasises the effects that globalization has on a country.
The essay is a longitudinal study that seeks to understand the impact of globalization on the JSE Securities Exchange, since the democratic elections in South Africa. Firstly this essay will analyse the impact globalization has had on South Africa in general. Then the essay will analyse the effect it has had on South African monetary policy. Further to that it will then analyse the challenges that globalization poses to South Africa. Then there will be more specific analysis on the impact of globalization on the JSE securities exchange. This section will seek to discuss the characteristics of an efficient securities exchange. Comparing the JSE to this will make it possible to determine the effect that globalization has had on the securities exchange and how this has affected the markets efficiency. Then the challenges of globalization facing the JSE will be discussed. This section will try to identify key issues facing the securities exchange, and possible solutions that the exchange can take to cement its place as efficient and reliable worldwide market.
2. The Impact of Globalisation on South Africa
Before discussing the impact that globalisation has had on South Africa, the extent of globalisation in South Africa must first be established. Globalisation's impact goes beyond economics to cultural, social and political influences as well. A comprehensive globalisation index is calculated by Foreign Policy Magazine, which includes the level of economic integration, technological connectivity,
References: Salvatore, D; (2004), International Economics, 8th Edition, John Wiley & Sons, Inc. Dollar, D and Kraay, A; (2001), Trade, Growth and Poverty, Finance and Development, Volume 38, Number 3. Available on: http://www.imf.org/external/pubs/ft/fandd/2001/09/dollar.htm Accessed on: 11 July 2001.