Combination of factors gives economy a beating

SOUTH Africa was squeezed into a tight corner this week, whichever way you look at it, be it the rand, the struggling economy or our ranking on global property rights.

First, the rand. The currency took a further hammering this week, slipping more than 10% in 24 hours and breaching the R15 mark against the greenback thanks to trade tensions between the world’s largest economy, US, and Turkey.

South Africa was affected because the sell- off in the Turkish lira had spread across emerging markets.

And that’s not all. The looming trade war between Washington DC and Ankara over American pastor Andrew Brunson, detained in Turkey on espionage charges, is peculiar.

Turkish president Recep Tayyip Erdogan was among world leaders who attended the 10th BRICS Summit in South Africa last month, where US president Donald Trump came under heavy scrutiny for his controversial protectionist stance and trade war with China.

Erdogan also held a private meeting with President Cyril Ramaphosa.

This week Trump announced the doubling of tariffs on Turkish steel and aluminium, prompting Erdo- gan to respond with tariffs of 120% on US cars and 140% on alcoholic drinks.

Erdogan also reportedly called for a boycott of Apple products in favour of Samsung, and a general ban on importing electronic goods from the US.

This is but one of the reasons why the rand was so reactionary this week.

With South Africa giving the greenlight to land expropriation without compensation, it slumped 15 places to 37th in the latest International Property Rights Index, the largest drop by any country.

South Africa ranked 22nd globally and first in Africa last year.

The Index is compiled by the Washington- based Property Rights Alliance and was released in partnership with the Free Market Foundation of South Africa.

The index also saw South Africa’s score declining this year by 0.65 points to 6.35 points from 7 points last year on a grading scale.

This week the economy escaped recession by the skin of its teeth in the second quarter.

This was thanks to the back-breaking mining sector, which increased production output by 2.8% year- on- year in June. And this was above market expectations of a 0.5% gain.

Data from Statistics South Africa showed that mining output advanced 0.8% quarter-on-quarter in the period, following a 2.2%contraction in the first quarter.

PICTURE: AP/AFRICAN NEWS AGENCY/ANA A man sits in a currency exchange shop in Istanbul on Thursday, August 16, 2018. Turkey’s finance chief tried to reassure thousands of international investors on a conference call Thursday in which he pledged to fix the economic troubles that have seen the country spiral into a currency crisis.