Continual interference of the ANC government in the private sector and confusing signals to international investors are the main reasons why South Africa’s economy is losing ground, Dr. Pieter Mulder, leader of the Freedom Front Plus says.
Also that policy certainty should be offered to investors by refraining from sending confusing policy messages to them. This medicine will without a doubt lure investors back to South Africa, according to Dr. Mulder.
Read the full speech of Dr. Mulder, below.
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Debate on Medium Term Budget Policy Statement and first reading debate – Adjustments Appropriation Bill
7 November 2013
When South Africa's new constitution was signed December 1996 the overall index on the Johannesburg Stock Exchange stood at 6 666. Today it stands at 46 000. On thát day the London gold price stood at $368. Today the gold price is $1318. But we must not bluff ourselves with numbers. Mining, which should have benefitted from the gold price, has shrunk from a 15% contribution to the country’s GDP to only 5,5% last year. Strikes and demands for unreasonable wage increases of 60% played a role in this. On that day a US dollar cost R4,69. Today a US dollar costs R10,15. Today the South African economy is slowly moving in the wrong direction.
The economic growth rate remains low, the government is not succeeding in reducing unemployment and problems of poverty remain very serious.
The honourable minister of Finance, to a large degree succeeded in maintaining a balance between financial restrictions and the demands placed on government spending. Without a radical change in the economic direction, the minister will not be able to maintain this balance much longer.
What is the main reason for the economy moving in the wrong direction? The main reason is the ANC’s continual interference in the private sector and specifically the ANC’s ambiguous message to the private sector and to foreign investors.
The minister of Finance pleads for more foreign investment because without it we will not be able to increase our economic growth rate. The FF Plus agrees with this.
He and the National Development Plan promise less red-tape and government interference to make it more attractive for national and international investors to invest in South Africa. We agree. The next moment, another minister announces stricter labour laws and more black economic empowerment measures. At the same time we get a new Bill on foreign investments which will increase the red-tape for foreign investors considerably and make it more difficult to invest here.
No wonder that investors are confused about South Africa. Does the government’s right hand know what its left hand is doing?
Remember: "Investors have the memories of elephants, the hearts of lambs and the legs of hares".
Hulle onthou lank, is baie versigtig en vlug gou.
The days when investors could invest despite the problems in South Africa, have passed. They owe the ANC and South Africa nothing more. There are many other counties which put in a lot of effort to make it as attractive as possible for investors. We in South Africa put new obstacles in their way and then we’re surprised when the investments do not role in.
With more rigid labour legislation we are doing the exact opposite to that which the International Monetary Fund (IMF) had advised South Africa to do to improve our economic growth rate and job-creation.
Die VF Plus stel voor dat alle klein en middelslag ondernemings vry van arbeidswetgewing gestel word en kyk dan hoe skep hulle werk. Gee beleidsekerheid aan beleggers deur die dubbele boodskappe te stop en kyk hoe nuwe beleggings instroom. Ons ekonomie sal ook nie baie langer kan voortgaan om aan ‘n kwart van die bevolking, 16 miljoen Suid-Afrikaners, staatstoelaes te betaal nie.
The FF Plus proposes that all small and medium-sized enterprises should be exempted from labour legislation and see how they will create jobs. Give policy assurance to investors by stopping the ambiguous messages and see how investors will stream to the country. Our economy will also not be able to continue much longer with paying a quarter of our population, that is 16 million South Africans, a state grant.
You can't indulge in a major programme of redistribution and welfare before you have experienced a period of high economic growth. You have to earn the money before you spend it.
We need a radical change of our economic direction to resolve South Africa’s unemployment, poverty and growth rate problems, because the current policy direction is clearly not working.