Financial globalisation : lessons for South Africa

M. Comm.Globalisation has become one of the contentious issues of our time. Some have praised it while others have strongly criticised it. The debate on the merits of financial globalisation intensified in the aftermath of the emerging market crises. The realisation that even countries with high growth rates and sound macroeconomic policies could be severely affected by a rapid reversal of capital flows spurred this debate. This happened just when South Africa was increasingly becoming part of this global village, where national borders have been made 'meaningless'. The resulting havoc that followed the emerging market crises, has affected even the most vulnerable groups of our society. This study aims to examine financial globalisation, its impact on the South African economy and the lessons, if any, that can be drawn from the experiences of other countries. South Africa's experiences are typical of the broader experience of financial globalisation in other emerging market economies. However, there are distinct differences in the nature of financial globalisation in these countries and the policy responses of the respective countries. Thus there are different lessons that follow from the Asian and Latin American experiences. This limits the whole transfer of best practice from these regions to South Africa