4 charts show why South Africa earned the reputation of ‘Safe Haven’ for investors

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In 2014, South Africa came to be known as the ‘safe haven’ for investors among the Emerging Markets. A comparison of the BRICS nations with developed nations on parameters of corporate governance, as reported in the World Economic Forum Global Competitiveness Report 2013-14, shows us why.

Good corporate governance and ethical practices by companies are considered essential for well functioning capital markets all over the world. Ethical practices, transparency in dealings, better investor protection and efficient boards boost investor confidence and lead to capital inflows in markets.

 

Ethical Behavior of Firms

 

Ethical behavior is assessed by company policies on bribery, kickbacks, protection money, facilitation payments, gifts, fraud, money laundering, and political and charitable contributions. Management systems and procedures outlining frameworks for risk assessment, sanctions, whistle-blowing, continuous internal self-review and external reporting also fall under the purview of ethical behavior.

In 2013, South Africa ranked at No37 on ethical behavior, ahead of other BRICS nations, with China at a distant 54th rank. India & Brazil ranked 86th and 87th and Russia ranked the lowest among BRICS nations on this parameter.  

Source : Global Competitiveness Report WEF 2013
Source : Global Competitiveness Report WEF 2013

   

Strength of Auditing and Reporting Standards

 

Fair practices and transparency in dealings are critical to attracting foreign investments. The use of auditing and accounting practices ensure transparency against fraud and mismanagement and so are particularly important for investors to invest in foreign markets. Read more

Six charts that show the state of Innovation in India

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Economists, academicians for long have recognized the role of innovation in a country’s economic growth. National innovative capacity is defined as the ability of a country – as both a political and economic entity – to produce and commercialize a flow of innovative technology over the long term.

As India takes on its path to economic recovery, the time is apt to look at the state of innovation in India, reflected in its R&D capability. Though the growth of R & D services has been consistently high at around 20% in the last few years, but India ranks low in its capacity for innovation as compared to developed nations as well as other BRICS nations. In the global gross expenditure on R&D (GERD) of US$ 1.6 trillion for 2014, India’s share is around 3%, which is around five times lower than that of China.

The Economic Survey Report of India 2013-2014 has highlighted the current state of R&D services in India. A look at the following charts reveals the determinants of India’s innovative capacity and the opportunities for improvement in this area.

Capacity for innovation

According to the Global Competitiveness Report 2013-14 released by World Economic Forum in Sept 2013, India’s capacity for innovation has been lower than 3 of the other BRICS countries (Brazil, China, and South Africa).

Innovation Capacity
Data: Economic survey 2013-2014

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