francois groepe : the role of chartered accountants in grass roots development and accelerating the realisation and economic emancipation of the majority in south africa through better management of government resources and efficiently delivering services to the masses address by mr francois groepe, deputy governor of the south african reserve bank, at the launch of saica northern region trainees committee, park town, 29 november 2012. * * * i wish to thank saica and the chairperson of the saica northern region trainees committee for inviting me to speak and to be part of this momentous occasion. i believe that the topic is very relevant against the backdrop of the significant levels of inequality in our country as reflected in the most recently estimated gini - coefficient of 0, 69. the top ten per cent of the population earn approximately 58 per cent of the income and the bottom 50 per cent less than eight per cent. we furthermore have had to contend with an unemployment rate currently of 25, 5 per cent in the third quarter of this year, much of it likely structural. global economy in considering the economic conditions in south africa, one is compelled to take cognisance of global economic developments due to the impact they have on local economic developments and the risks of spillover. economic activity in both the advanced economies and the emerging market economies continue to disappoint, while continued uncertainty further weighs on the outlook. although the us recorded an uptick in growth in q3 / 2012, there is an expectation of lower growth in 2013, due to the risk of a fiscal cliff. in the event that the fiscal cliff is avoided, there remains a real possibility that the agreed settlement may include some degree of fiscal consolidation as well as an increase in the effective taxation rates, which may act as a drag on consumption expenditure. the euro area contracted in q3 / 2012 and is now in technical recession. there is a possibility that recessionary conditions may continue for two reasons, namely : • an accentuated drag on growth due to the continued fiscal austerity measures, amidst indications that fiscal multipliers may be higher than previously estimated ; and • a number of the leading indicators seem to suggest that growth prospects are tilted to the downside. unemployment levels in europe remain at elevated levels historically, the social implications of which should not be underestimated. a further concern is that cyclical unemployment could evolve into structural unemployment. this could add a further dimension to an already challenging and complex set of circumstances. emerging market economies have decele

gold declined from around us $ 725 per fine ounce in mid - may to around us $ 570 a month later. similarly, platinum declined from a high of us $ 1331 per ounce in may to a low of us $ 1125 in june. it should be noted however that these changes are exaggerated by particularly strong upward price movements in the previous month. for example, the gold price averaged around us $ 550 per fine ounce in each of the first three months of this year, whilst the platinum price averaged around us $ 1040 per ounce in these months. this suggests that there had been some overshooting and that the current trends may be an inevitable correction, rather than a generalised collapse in commodity prices. however, the degree of volatility in commodity markets creates an uneasy environment for commodity - based currencies. interestingly, despite the “ sell - off ” in emerging market assets since may, non - residents have remained net buyers of south african financial assets and there have been significant investment flows into south africa over the past year. non - resident investors bought a net r13 billion worth of south african equities during may 2006, and r460 million in the first half of june 2006. despite generally negative sentiment towards emerging - market assets, they continued to buy r768 million worth of bonds in may, and r4, 5 billion in june. these purchases brought the net amount of south african bonds and equities bought in the year to mid - june to r68 billion, compared with r41 billion in the whole of last year. similarly, britain ’ s vodafone group paid r21 billion earlier this year to take over venfin ’ s stake in the local cellular operator, vodacom. and towards the middle of last year, british bank barclays bought a majority stake in local bank, absa, for an amount of about r33 billion, making this most likely the single largest foreign investment in south africa to date. while the market outlook has become more uncertain against the backdrop of a withdrawal of liquidity as well as geopolitical developments which have impacted on the international oil markets, the macroeconomic landscape still appears to be generally favourable, although not without risks. inflation pressures seem to be building up across emerging markets whilst trade and industrial production trends look robust. high levels of international reserves and current account surpluses in a number of emerging market countries, together with reductions in external debt, have radically improved solvency