Fuel costs unlikely to reverse globalisation trend

WITH THE global increase in the cost of fuel and food price inflation, many economists are predicting a reverse in globalisation and an increase in regional trade. For South Africa, which is a long way away from the lucrative American and European markets, this could have a devastating effect on our exports – but it's not inevitable, says Lizanne Case, business analyst: import export economics at FNB. Speaking at an Exporters’ Club networking lunch in Johannesburg last week, Case pointed out that South Africa and most other countries would never be able to compete price-wise with countries like China. “We therefore require innovative products that can be sold at a premium when exported. “Knowledge is power might be a cliché,” she said, “but it is the commodity of the future and knowing your customers’ needs and having the ability to upgrade and be innovative will set you apart and give you a competitive edge regardless of where you sell your products. If you supply products people want to buy then it won’t matter if the price of oil reaches US$200 per barrel.” Case notes that prosperity is created and not inherited and urges South Africans to get out of their comfort zone and stop relying on the weak rand for competitiveness. Instead we should be responding to global consumers and their wants. Organic baby food that has been certified as halaal and kosher is cited as the perfect example of someone recognising the international trend towards health food and creating a niche product to fill the gap. The fact that it is organic baby food is nothing new, but by manufacturing it in such a way that it can be certified as halaal and kosher, a new market comprising at least 10 million consumers was created for the manufacturer. “Look at the little insights into the mundane, it doesn’t always have to be big, new things,” she urges.