The Economy. What an enigmatic concept! Whether it is the global economy or the economic situation of your household, the economy determines a big part of our lives. This complex concept affects us all and although some of us might be more aware of its impact than others, we should all care about what is happening in the economy.
There’s nothing straightforward about economic matters. Not only is it intriguing material to read and write about, but it is also a reality for each of us, whether we understand the complexities or not. And that is why it is so important that our leaders understand this too. Political agendas and ideals should serve the wellbeing of the people, shouldn’t they? And if so, then they should be focused on establishing and growing the economy.
A good example – from the world of wine, of course – is free trade agreements. “As a wine importer, your business is at the mercy of international trade rules, quotas, and tariffs (taxes levied on imported goods). Free trade agreements are deals made between nations to lower or completely remove these barriers. The more free trade agreements that are in place, the more you can benefit by buying wine from international sources and selling to important markets.” (Read more)
For our industry, it is hugely beneficial when governments agree to such an ease on trade restrictions. We’ve seen the positive impact of the agreements with the USA – AGOA, the EU/UK – EPA agreement and the African Continent – AfCFTA. As significant as these agreements can be for the industry and economy, politics can easily interfere. Just recently, South Africa’s “friendships” with Russia, Iran and China almost disrupted the AGOA agreement with America. (Read more) Thanks to the efforts of Trade and Industry Minister Ebrahim Patel, a preliminary agreement was reached to extend preferential trade access for African countries into the US by another decade. (Read more)
Political decisions have important economic implications and sometimes the impact of rulings and regulations reach much further than their original intention. South Africans just had the chance to vote and, in my opinion, the core motivation should have been to find leadership and a government that can ensure a positive and growing economy. Even though we often confuse economy and financials, it is about much more than the country’s debt and the strength of the Rand. A positive economic climate is to the benefit of all – big corporates, exporters, those employed at the most basic levels and even those receiving grants. A strong economy creates wealth and job opportunities. I know it is easy to say, but for informed voters, even those worried about a roof over their heads and food on their tables, the possibility of wealth creation and a future for their children, should be more motivation than receiving welfare.
India, the world’s largest democracy, also just concluded their elections and while the governing party will stay in power, like the ANC it also suffered setbacks. Unemployment is a big issue in India too and the population are increasingly becoming aware of their potential within the global economy. According to vox.com people voted for jobs, electricity and safe water. Sounds familiar? The UK is also going to the polls in a few weeks and the BBC says: “When UK voters elect a new government on July 4, the health of the world’s sixth-biggest economy will likely be the main factor in deciding the outcome.” While the UK economy seems to have recovered a little recently, it’s still fragile (read more) and will be a very important consideration to voters. On the other hand, and at first glance, the US economy looks healthy when one considers employment and inflation levels. But as Americans are also making their way to voting stations later this year, sentiments do not suggest such a positive economic environment. Why? Do read this interesting article, comparing the published employment figures and inflation rates to the real situation for many Americans when it comes to job security and living costs not keeping up with income.
I just returned from Hong Kong where we attended Vinexpo Asia and I am grateful and, to be honest, a little relieved for the success of this international wine fair. We are so used to the tough global economy that we are almost surprised when things seem to pick up. I hope that the result of all the 2024 elections will be level-headed, informed and savvy governments focused on the well-being of their people and therefore a healthy and growing economy!