# General Business Category > General Business Forum >  "Cape Town and Durban are basically villages."

## duncan drennan

Ã¢â‚¬Å“Cape Town and Durban are basically villages.Ã¢â‚¬Â

That's the last line of the article, "The death of Cape Town?" on the M&G




> There's only so much Cape Town can do in the face of the juggernaut that Gauteng is becoming. About 50 large corporates have chosen to base themselves in the Western Cape, including Pick 'n Pay and Remgro. These numbers are dwarfed by the 600 or so large corporates, including multinationals, who choose to base their South African or even African operations in Johannesburg.
> 
> With a third of South Africa's GDP and 10% of Africa's GDP produced by the province, Gauteng's importance as an investment destination is steadily increasing. Businesses need to be where their major clients are, and a large city region makes for easier networking, greater choice and more services. It may also be easier to recruit skilled professionals in Gauteng, where salaries are traditionally higher.


With globalisation, the internet and so on, does this argument really make sense?

There are certain economic arguments that can be made, but when it comes down to it, how many people really *want* to stay in Gauteng? Obviously if you are in a debt trap or financially strapped that's where you're going to get locked in, but if it comes down to choice of lifestyle what would you choose?

Another argument against this that I've heard is that companies that are mainly creative in the make up of their business should choose the best environment to attract the best people, who will work better in a good environ - heard that from a German client. I would tend to agree.

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## kerryanne

What I find interesting is that the other major cities mentioned in the article - New York, London, Paris and Amsterdam - could all be viewed as the premier tourist destinations in their respective countries (with the possible exception of New York, but then the US is a pretty large country...). Jo'burg doesn't fit this profile, as far as I can tell from visiting international travel forums and other similar web sites - that honour belongs to Cape Town, with Durban in second spot. Could this change if it becomes our undisputed commercial hub?

I definitely agree with your last sentiment - creativity blossoms best in a creative space.

What kind of turnover is there in terms of people leaving Gauteng to live and work elsewhere (lifestyle choice)? If this number is significant, it will have to have an impact at some point, surely?

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## Dave A

KZN used to enjoy the label of "The last outpost." Feel the pain.

Seriously though. If we look at national commitment to infrastructure, it seems it's Gauteng first and the rest of the country gets what's left. Even when there is really no excuse.

As example - ORT (ex JHB) airport is less than ideal as an international airport due to its altitude. But more has been spent on building international capacity there than it would cost to put up the proposed, and long postponed King Shaka International Airport project that would make far greater economic and aeronautic sense.

Durban was South Africa's fastest growing city not that long ago. I expect centralisation and marginalisation will have taken care of that by now.

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## Snoopy_inc

You still wont find me in JHB ever. I hate that place.

To crowded and everyone is rushing somewhere. 
Not a nice place to visit at all

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## Dave A

I was chatting last night to an architect who has his finger on the pulse in the construction industry. Durban is still competing very well with the country particularly on commercial and industrial construction at the moment...

I see the "village" comment comes from a tennis organiser. Newsflash. It's happening in the village of Durban - which come to think of it probably explains why SAA is the headline sponsor.

And then there's golf. Yeah. Gauteng's a mecca alright - in their dreams.

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## Balsak

I don't believe the comparably higher infrastructure spending in Gauteng is unfair in any way. No one would rightly dispute Gauteng's status as the country's economic backbone. Without the region and the people who drive it we would all be worse off.

Gauteng's contribution to the national GDP simply overshadows that of the other provinces. Macroeconomic theory dictates that increases in total spending leads to increases in demand, which in turn leads to increases in production and concomitant increases in income. Higher income leads to increased spending and the whole process repeats itself. This is nothing new and it simply means that those who contribute and perform are rewarded many fold.

Driving around in JHB suggests that we should be spending even more on infrastructure in Gauteng. I know other cities, especially Cape Town, also have major problems with traffic congestion, but it is on a much smaller scale than we are dealing with in JHB and PTA.

Also, business deals are made on the golf course, at the pub, after church, over dinner. New opportunities come from meeting new people and the Internet just doesn't cut it as far as quality of networking goes, so I understand the desire to be close to your existing / potential clientele. 

As far as lifestyle goes, few would argue that Table Mountain is pretty. The air is fresh and life is slow. Some, however, prefer the pace of JHB. The culture and the people are different - Cape Town is slow but pretty, in Durban people can't speak / understand anything but English, but their beaches are first class, in Bloemfontein nothing really happens but the people are friendly. So which city is better?

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## Dave A

> I don't believe the comparably higher infrastructure spending in Gauteng is unfair in any way.


You're not from Gauteng by any chance  :Big Grin:  
I reckon we just stop the water imports from the other regions and watch the problem sort itself out  :Big Grin:   :Big Grin:  



> Macroeconomic theory dictates that increases in total spending leads to increases in demand, which in turn leads to increases in production and concomitant increases in income. Higher income leads to increased spending and the whole process repeats itself. This is nothing new and it simply means that those who contribute and perform are rewarded many fold.


Which means we should be burying the Eastern Cape instead of pouring resources into the region.

Getting serious - Balsak raises very valid points. It is a vicious circle if it isn't managed, and at this point the lack of macro-management is leading to an infrastructure meltdown in Gauteng. And yet there are other parts of the country well placed to take the expansion that Gauteng is struggling to cope with. Easily seen when we talk roads and water.

But back to airports. ORTIA is being developed as the country's hub. And best I can tell it just doesn't make economic or engineering sense. Our main international gateway airport should be at sea level or thereabouts - period.

Government is becoming increasingly centralised and perhaps this centralised mindset is rubbing off in all areas of endeavor. This trend to centralisation at government level is purported as being in the interests of good governance. However, is it wise or even sustainable when we think in terms of managing resources?

I suppose in due course, left unmanaged, Gauteng will simply implode under its own weight and corporates will scatter to the "outer regions" - much like the inner city self-destruct and the move to suburbs that happened not so long ago.



> Also, business deals are made on the golf course, at the pub, after church, over dinner. New opportunities come from meeting new people and the Internet just doesn't cut it as far as quality of networking goes, so I understand the desire to be close to your existing / potential clientele.


I'm willing to bet those days are numbered - How is the new generation communicating and networking?

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## Dave A

Residents of Gauteng earn more, are better educated and are likely to live longer than people in other provinces, a South African Institute of Race Relations study has found.

In a report released on Tuesday, it identified "glaring inequalities" in service delivery and living conditions across the provinces. This, it submitted, suggested a need for decentralisation of provincial authority, including a degree of autonomy over tax and labour-market regulation. 

The move would give less developed provinces the best chance to get a competitive edge over their neighbours and close the development gap. However, the report noted that proposals to amalgamate provinces were indicative of a policy move in the opposite direction.

It found that in 2006 Gauteng residents earned on average 300% to 400% more than people living in Limpopo.

It projected that by 2010 Gautengers were likely to live 20% longer than people in KwaZulu-Natal, probably because of "the devastation of HIV/Aids".

Gauteng also had the most educated population. The 6% of residents holding degrees was almost double the national average.

The worst province to live in was the Eastern Cape, according to the report, authored by Chris Kriel. It had the lowest proportion of formal houses -- just over 50% -- and a quarter of households relied on bucket toilets.

In the North West there was a 30% increase in the number of households using bucket toilets between 2002 and 2005, while in the Western Cape, 31% of households did not have water in their homes.

The report also identified "great differences" in the racial breakdown in the country's nine provinces. Of the Western Cape's population, only 23% was black, as opposed to 97% of that in Limpopo.

It pointed out that this had implications for the implementation of black economic empowerment and affirmative action.
full story from M&G here

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## AndreMorgenrood

> Residents of Gauteng earn more, are better educated and are likely to live longer than people in other provinces, a South African Institute of Race Relations study has found.
> full story from M&G here


Hmm, not sure if I agree with that study completely, as far as I know Discovery Health in their "Coastal" plans are bargaining on people in coastal areas living longer with less health problems, hence the lower premiums?

I KNOW that the money is better up there though, cannot dispute that, but hell is it worth LIVING there  :Roll Eyes (Sarcastic):

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## Dave A

I think that particular aspect is being heavily affected by AIDS. An interesting observation though, Andre.

Perhaps Discovery Health's client demographics aren't truly representative the region's overall demographics.

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## duncan drennan

> Hmm, not sure if I agree with that study completely, as far as I know Discovery Health in their "Coastal" plans are bargaining on people in coastal areas living longer with less health problems, hence the lower premiums?


Maybe I'm wrong, but I thought it was the hospitals that are cheaper?

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