Bitcoin: digital insulation from sovereign risk?

It can be argued that Bitcoin has the potential to safeguard the value of your savings, depending on the relative state of each currency. The digital asset has been maturing for almost a decade and our analysis demonstrates that it appears to act as a safe haven in the face of adverse macroeconomic conditions, thus far.

Will imprisonment derail collusion or the competition authorities’ efforts?

Many countries across the globe (including BRICS countries) now have a competition enforcement regime in place. But why bother? Why is it so important to promote competition? Economics tells us that increased competition can lead to lower prices, increased quantities of goods and services being supplied, greater innovation, improved quality and a wider variety of choice for consumers. It also drives economic efficiency and dynamism, which can stimulate economic growth and job creation, thus contributing to broader policy goals.

So how successful have the South African Competition Authorities been in enforcing the Competition Act and in sending out the correct signal to current and would-be cartelists and abusive firms?

The impact of Netflix on Multichoice and the South African TV market

Netflix’s entry into the South African market has created much noise. What might this mean for competition in the South African pay-television market? This is an important question for South African consumers and incumbent rivals, but is also an interesting one for economists.

what FIFA has shown us about decentralised democratic systems

The global soccer fraternity was shaken in 2015 when the US Department of Justice (DOJ) decided to charge and arrest high ranking FIFA executives for “rampant, systemic, and deep-rooted” corruption. Where the FIFA saga becomes more disturbing is that the electoral system and its concomitant outcomes may in certain circumstances be not too dissimilar to national electoral systems and their outcomes, particularly in a decentralised democracy such as our own. Funds transferred from national government that are meant for economic development can become particularly fungible when expenditure decisions and accountability are similarly decentralised.

SARS cannot afford not to pursue transfer pricing matters

Transfer pricing is a business practice that, when abused, can result in substantial lost tax revenue for any country. In South Africa, tens of billions of Rands are lost due to abuse of this practice. Given the cost to the country (relative to the cost of enforcement, SARS cannot afford to under-enforce firms who might be engaging in this abuse.

Is South Africa’s social expenditure pattern sustainable?

Despite South Africa’s notable accomplishments in the last 20 years of democracy, a number of significant challenges remain. Notably, the unemployment rate stood at 25.5 percent in the second quarter of 2014, over 13 million children are reported to be living in households that are below the poverty line, and 32% of all children live in households where no adult is employed. In principle, the roll out of social programmes is indeed a necessary and noble expense, especially given SA’s history.

To hike or not to hike interest rates?

The South African Reserve Bank (SARB) has a difficult decision to make ahead of its Monetary Policy Committee (MPC) meeting and announcement on Thursday 17 July 2014. It needs to decide whether or not to hike interest rates, and if so, by how much. This is against the backdrop of a grim macro-economic environment.Currently, the inflation rate stands at 6.6%, clearly outside of the SARB’s inflation target range. At the same time GDP growth has fallen into negative territory at minus 0.6%.

How much damage did the construction cartels inflict?

Recent revelations of collusion in the construction sector in South Africa have led to widespread anger and debate. In June 2013, the Competition Commission of South Africa reached settlement agreements with 15 of at least 21 construction companies implicated in the cartel. Much less has been heard on the matter in recent months, but this apparent quiet might just precede the storm to come.

Inferring dominance from market power: a road less travelled

In South African competition law, dominance is usually associated with high market share (greater than 45%) in the relevant market. While this is intuitive, it may not necessarily always be the case. This is because even with low market share, if a firm can be shown to possess market power, it can also be defined as ‘dominant’.

Rising costs in the healthcare sector – who’s to blame?

South African medical costs have increased at an average rate of 8.6% per annum between 2010 and 2012. This has led to all sorts of accusations in the media and from the Government – but who exactly is to blame? Our first response is to point a finger at the insurer. The insurer in turn points to the private health care sector who then points to the costs of their inputs and suppliers. This leaves us guessing as to where these cost/price increases truly originate.