South Africa finds itself on the verge of an economic disaster and all the ANC government is doing to get the country out of the ideological pit of ruin is to dig down deeper.
This is clear when one considers the Competition Amendment Bill, which will have various unforeseen consequences if it is implemented in a complex environment like South Africa. The break up and reorganisation of businesses can cause irreparable damage, particularly in a time when we are relying heavily on strong, large businesses to carry the country forward economically.
Economic restructuring should only be considered in an informed way during times when the economy is flourishing in order to the expand the economy, but not when the country finds itself at the bottom of a deep pit. It appears as if the Bill is aimed at amending and redistributing the existing economic structure rather than growing the economy. Pure redistribution without growth is simply not sustainable.
One of the most concerning aspects of the Bill is the intention to afford the president and the minister the power to intervene in the market and put an end to foreign investments in a time when South Africa is actively attempting to attract foreign investors.
It sends the message to the world that South Africa is open for business, but that the ANC will determine which investors are welcome and then their assets may also be expropriated without compensation.
This Bill, in conjunction with the principle of expropriation without compensation, may very well result in South Africa being kicked out of AGOA. Section 104 of AGOA makes it very clear that government interference in the market will not be tolerated. It will be catastrophic for our country.
Section 2.1 of the Bill reads as follows: "The main objective of these amendments is to address two persistent structural constraints on the South African economy, namely, the high levels of economic concentration in the economy and the skewed ownership profile of the economy."
The government's biggest mistake is that it wants prescribe rules to society, while it does not obey its own rules and it is quite happy to put society in harm’s way, while protecting itself from encountering any risk by means of its own policies.
If the ANC is being honest when it claims that it wants to change the levels of economic concentration and the ownership profile, then it must set the example and start unbundling the state dinosaurs of Eskom, the SAA, ACSA, Transnet, Prasa and the PIC and all the other enterprises that seem to only exist so that they can be looted.
If the ANC government is not willing to do that, it is not really serious about the objectives of the Bill. The best thing that the ANC can do at present is to step aside and allow the economy to grow spontaneously for the benefit of all South Africans.
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