SA at risk to turn in economic basket case

Bloemfontein – Business leaders attending the ANC national
conference in Mangaung have warned that if there was
continued talk of nationalisation “on the wings of
government”, an inability to implement the National
Development Plan (NDP) and the dismissal of ratings
agency downgrades, South Africa could risk turning into an
economic basket case like Greece.
The strong warnings to the government were led by Investec
chief executive Stephen Koseff, who sponsored a business
breakfast arranged by the ANC’s business lobbying
organisation, the Progressive Business Forum, on the
sidelines of the conference on Monday.
Koseff warned that South Africa “can’t live for too long with
what we have seen for the last six to nine months”, with the
relationship between business, labour and the government
“not where it should be”.
He was referring to the recent strikes and violence in the
mining sector at Marikana in North West, and in the
agricultural sector at De Doorns in the Western Cape.
Noting that Investec was an international specialist bank
that continually dealt with other banks, government
agencies and investors, the talk of nationalisation had not
done investment sentiment any good. Leaders were
concerned about the lack of policy clarity on economic
issues. Significantly, foreign direct investment was only
about 1 percent of gross domestic product (GDP).
Although very clear policies had been forged in the National
Planning Commission’s report on national development,
Koseff said it was time to get on the road of
implementation while drawing on private sector skills.
He noted that in terms of the Global Competitiveness
Report, South Africa’s banking and financial services sector
scored in the top 20 of 144 countries examined. Yet South
Africa was at the bottom of the rung as far as health care,
labour relations and education were concerned.
Things started to go pear-shaped after a highly successful
and well-organised World Cup in 2010. Koseff urged the
government to keep a check on government spending and to
ensure that state debt levels – at 37 percent of GDP – did
not slip to the levels of basket case economies at 60
percent of GDP or more. “It doesn’t take too long for South
Africa to become a Greece,” Koseff charged.
Strong collaboration between the government, business and
labour needed to be restored to focus on economic growth
and development and to foster job creation, he said.
Stanley Wayland, the managing director of Virtual
Investment Group, said he was pleased that Koseff had
raised the issue of South Africa slipping into a crisis like
Deputy Finance Minister Nhlanhla Nene said: “We are
nowhere near where Greece is… we are far from there.”
South Africa was making sure that all its policy decisions
“are aimed at making sure we stay out of (a) crisis
Pressed by Koseff on the contradictions between the NDP
and the New Growth Path – with the one being business
friendly and the other supportive of state intervention –
Nene said the state needed to play a developmental role.
He did not see obvious contradictions between the two
Nene agreed there were hiccups in the relationship between
the government, business and labour, which was put under
stress during the mining and agricultural crises.
Pressed by AngloGold Ashanti spokesman Alan Fine on
whether new taxes would be imposed on the mining sector,
Nene said: “We have never taken tax policy decisions on the
hoof.” Whatever emerged from the conference would be
thoroughly canvassed through the normal process of
parliamentary hearings. “We will not be reckless,” he


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