Big Mac? Chicken or beef? Junk food. Junk status. South Africa's economy has tanked. Investors are running. Importers are crying and exporters are scratching their heads.But here's the good news. Our McDonald's Big Mac burgers are the world's fourth cheapest after Venezuela, Russia and the Ukraine, according to The Economist's Big Mac Index.The index has become synonymous with gauging the health of an economy.It is based on the theory of purchasing-power parity, which looks at exchange rates between currencies in equilibrium when their purchasing power is the same between the two countries - in this case the US economy and other countries.Though our Big Macs may be cheap - if you are a tourist with US dollars - at R28, it paints a far gloomier picture than burnt onions and no tomatoes.To reach pricing parity, the exchange rate would have to be R5.68 to the dollar, which would mean our Big Macs would cost US$4.92.A Big Mac in Venezuela costs 66 US cents compared with South Africa's US$1.77 (at an exchange rate of R15.81).According to The Economist, the index, which tracks the valuation of currencies, shows how weak the rand has become, and how it remains one of the world's most undervalued.This follows the rand's dramatic plunge on Sunday when it reached nearly R18 to the dollar. This after its decline last month when President Jacob Zuma axed thenfinance minister Nhlanhla Nene, and replaced him with David van Rooyen.The latest index, say economists, is not good news.Economist Azar Jammine said the country should be seeing an export boom "like never before"."But we are not. This is partly because we export raw materials which are dollar-based, rather than being rand-based. It would only help on non-mineral exports, which account for less than half of the country's exports," said Jammine."The other problem is that many export product prices, especially in manufacturing, are set months, if not years, before."Export contracts for cars, for example, would have been placed at R12 to the US dollar."One would expect immediate benefits "but this is also slow"."The flow of capital, especially out of South Africa, has had huge negative effects. In the end it does not matter how competitive your currency is. If people do not want to invest, your currency will depreciate," Jammine said...