Competitiveness – How to secure South Africa’s slice of the “Global investment pie”

When it comes to FDI and broadly speaking economic growth, many SA leaders foster a short term, narrow minded mentality, one of taking the easiest route to secure the greatest short term benefit. Instead of implementing policy that favours FDI, government stumbles along with its mindless business-unfriendly policies. For some reason ANC leadership still believe (despite what happened in the previous apartheid regime) that they can run a country in its own little isolated bubble. Certain rhetoric of “this is our country and we will do as we want” resonates clearly and if anybody dare say anything, they are labelled as either a racist, or as a “white colonial capital slave”.

That is why I believe this whole BRIC’s thing (note the lowercase‘s’) is in actual fact a joke. SA can’t compete with its fellow members – not even close. What I am willing to agree with is that the inclusion of SA in the “big boys club” is far more for their benefit than for ours. This whole BRIC’s scenario, in my humble opinion, only creates a false perception that SA is comparable to its “bigger brothers”. A perception that “we are on the right track”, or/and “we don’t need to change”. The problem with this “state of false perception” is that it may just subtract from the urgent need for a wake-up call, especially in terms of policy reform needed to increase FDI and overall global perception. It is important to realise that the only ones really taking note of the whole BRIC’s thing is SA, and understandably the other 4 nations (Not being that significant – given they invited us).

SA is globally competitive in some industries, such as the financial and pharmaceutical industries but highly lag in competitiveness in for instance the manufacturing industries. I guess it would be fair to say that SA is especially uncompetitive in terms of our unskilled/less skilled labour industries – worrying since this is also where the majority of the countries unemployed labour force resides. SA can simply not compete with its BRIC counterparts when it comes to the cost of unskilled labour. Also, throw in our incredibly strict labour law policies (which would be considered problematic – even in a skilled labour market) and suddenly we seem to have a huge problem.

Firstly, SA has to become more business friendly. Decreased regulation and interference in our markets (reduction in excessive competition policy wastage), less interference in the labour markets (take the short term knock for long term sustainable solutions), mutually beneficial business incentives, decreased crime and corruption and a larger skilled labour force through education reform.  

Secondly, Infrastructure development – specifically related to our railroad and ports and securing long term electricity supply.

Thirdly, International perception – People need to realise that we are part of a global economy and that the international perception of the country’s economic stability plays a major role in securing economic growth and prosperity. People should be held accountable!