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2018 might be the year that you see an increase in the price of your favorite bottle of wine. In late October, the International Organization of Vine and Wine (OIV) released its annual report of 2017 wine production levels around the world, and the results exposed several indications for concern about the performance of the global wine industry. The OIV estimated a fall of 8.2 percent in global production to the lowest level the industry has experienced in 50 years. This decrease is equivalent to around 2.9 billion bottles of wine.

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The World Economic Forum (WEF) recently published their Global Competitiveness Report for 2017-2018.  According to the WEF, the Global Competitiveness Index assesses the competitiveness of the landscape of 137 country’s economies and it provides unique insight into the drivers of their productivity and prosperity.  There are twelve pillars of competitiveness used to sort and rank each country’s economy.  The twelve pillars are as follows: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation.  Each of these pillars is used to measure a different part of a country’s economy’s competitiveness.

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South Africa’s economy is in a crisis, with its growth forecast for 2016 dropping from 1.7% to .9%. Making matters worse, the rand, South Africa's national currency, has depreciated by 30% over the last 18 months. Currently, the government is taking many different measures to stop the country from entering into recession and to please the rating agencies who are threatening to downgrade South Africa's debt to junk status. Both of these could have dramatic effects on the country and its relationship with foreign investors.

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The United States Federal Reserve’s recent rate hike after a decade has prompted fears of financial turmoil in emerging markets. This rate hike is significant to global markets because the strengthening of the U.S. dollar could cause trouble in countries where firms have borrowed heavily with American currency, and the weaker domestic currencies could make it more difficult to pay back the dollar debt. In 2015, investors have withdrawn $500 billion from emerging markets, and this new development could prompt a larger outflow in the coming months from emerging markets.

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Oudtshoorn, the capital of ostrich industry, has been enjoying prosperity from ostrich farming since the 1880s. These big-eyed birds provide jobs to the locals and attract tourists from all over the world. Before I went on this trip to South Africa, I never knew ostrich farming could be turned into a profitable business. During the visit, I observed several advantages and disadvantages of ostrich farming.

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Africa’s second biggest economy is experiencing an energy shortage that is affecting consumers and businesses across the country. Eskom, the state-owned electrical provider, has informed customers that the company cannot keep up with the increasing demand for electricity, and has asked everyone to reduce the amount of energy they use. Recently, these measures have not been enough, forcing Eskom to implement managed electrical blackouts, impacting the 95% of South Africans that rely on Eskom’s service.

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A recession is typically defined as a decline in GDP in two consecutive quarters. In the first quarter of 2014, South Africa’s economy contracted by 0.6% and only grew by 0.6% in the second quarter – narrowly avoiding a recession. Many worry that South Africa, Africa’s most advanced economy, still faces a significant risk of slipping back into a recession. South Africa’s staggering 25.5% unemployment rate is a major factor that is contributing to this risk and it must be harnessed in order for the country to experience sustained economic growth.

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Many emerging markets have noted the rapid devaluation of their currencies taking place over the past year. In Colombia, the peso is now worth 2,017.01 per U.S. dollar, the weakest currency level since 2009. While other emerging markets such as South Africa and Turkey are fighting incessantly to combat currency declines by raising interest rates, Colombia is taking a different approach by fully embracing the decline of its currency.

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In the business world, sports may be best recognized for the many benefits they offer to individual businesses such as sponsorships, brand building, venues for advertisement, and marketing opportunities. However, sports also have major impacts on economies all around the world. It’s no surprise that international sporting events like the World Cup and the Olympics greatly affect the economies of host countries. These economic effects can be positive or negative and can have implications not only on a regional level but a global level as well.

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Africa is the second largest mobile phone market in the world. Does this fact surprise you? Probably, but Africa is expected to reach over 700 million mobile subscribers in the next year. Not only is the African mobile market large in size, it is also the fastest-growing on the planet as well.  This provides an abundance of opportunity for investors, technology and mobile companies, and service providers.

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Lately Africa has been attracting beer companies from around the world, as they look to start new ventures. Breweries interests have already begun in Johannesburg, South Africa, and Juba, Sudan. At the end of 2008, Africa produced 5% of the world’s beer supply, a number which has continued to grow since then. Although beer production has been popular in Africa since the 1990’s, companies have begun to increase their investments in the continent since African locals have struggled to be able to mass produce the product in the past.

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Widespread use of the Internet has led to a decline in the prevalence of traditional brick-and-mortar businesses, and this disparity will continue to shift as more people worldwide are provided with Internet access. Buying online is simply more convenient, and most of the time more affordable than traveling to a physical location and purchasing a good or service. Even more convenient, however, is the ability to conduct business and make purchases while on-the-go. With an increasing number of smartphones sprouting up all over the world, making purchases has never been easier. Mobile commerce is a trend we can expect to see entire business strategies built around. 

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With the excitement of the World Cup evident in South Africa, there is also great pride and unity among locals.  The energy of the World Cup has spread all over the country, and has even hit the poorest areas.  This energy has provided harmony among citizens and although many areas in South Africa are still suffering, right now everything is about football.  Problems such as poverty stricken homes and jobless citizens still exist, but they are being put on hold for a very important event for South Africa.  During the game between Mexico and South Africa, over 3,000 locals gathered in a park to enthusiastically watch the game. The World Cup has greatly improved the moral of South African citizens. 

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As the 2010 World Cup kicks off, there are a lot of interesting stories not only on the pitch, but on the business side of things as well. They include fake goods and counterfeit products, local food vendors being pushed out, extra investments, 'green' jerseys and huge sponsorship deals. This week we will be writing about the impact that the World Cup has on South Africa, sponsorships, copyrights and the economics of running an event such as a World Cup. We hope that you'll join us this week!

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South African President Jacob Zuma has recently visited India in a bid to strengthen bilateral trade and investment between the two countries. Both are developing nations and are very interested in attracting investment from each other. India and South Africa are thirsting for more business from companies in both countries. India is specifically looking towards bigger investments in infrastructure and a chance to tap into South Africa's rich natural resources.

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Business and Africa are not always two words you hear in the same sentence. However, with globalization being such a huge component of today’s business, it is important for companies to always be on the lookout for new places to expand. More and more things are being exported and imported these days. It appears nearly impossible to do business without crossing a border into another country. One country that has recently come onto the international business radar is South Africa.

With a rapidly growing population and a rising middle class, South Africans are seeking out many of the same products and brands that other developed nations have become accustomed to. This means there is an opportunity for businesses to enter and prosper in this expanding market.