South Africa should stop threatening the United States’ national security, get rid of BEE, and protect property rights if it wants to attract foreign investment from the world’s largest economy.
This is the view of political analyst Frans Cronje, who discussed South Africa’s relationship with the United States during a Sakeliga interview.
Cronje said many economists have written South Africa off, seeing the country’s path towards becoming a failed state as inevitable.
He referenced an experienced economist who said, “We have seen this fifty times before. Your country will end in only one way”.
Cronje said that in some quarters, the view is that it is utterly pointless for the United States to establish sound relations with South Africa.
This is because economic growth is plodding along at 1% while the country’s unemployment rate exceeds 30%.
“Inevitably, it will lead to doomsday. It will be overwhelmed by poverty, desperation, and populism,” they predict.
“The political class, which takes advantage of the situation, will be strongly aligned against the West. Hence, the United States is wasting its time.”
The only way for South Africa to become a viable prospect for the United States to build sound relations with is to show strong economic growth.
John Steenhuisen expanding BEE in agricultural sector – Sakeliga
To achieve this economic growth, South Africa needs to lift its fixed investment rate from the current 15% to 25%.
This will boost economic growth to 4%, which, in turn, will drive job creation at a rate that will reduce unemployment to 10% over the next 20 years.
There is pressure from the United States on South Africa to implement reforms to achieve this economic growth scenario. It includes:
South Africa must stop doing anything that the United States perceive as a threat to its national security.
Stop taxing United States companies that want to invest in South Africa through policies like Black Economic Empowerment (BEE).
You cannot expropriate property at less than market value. This makes a country uninvestable.
Cronje explained that trading with China is entirely acceptable as it is not a threat to the United States’ national security.
He explained that it is a very narrowly defined set of actions which the United States believes South Africa engaged in, which threatens its security.
Cronje added that taxing foreign capital on arrival through BEE and related policies makes South Africa unattractive for international investors.
“Many companies quietly pass South Africa because their policies do not make for a good investment case,” he said.
He said the demands from the United States are consistent with the demands of the South African economy and public opinion.
