Dear Editor
The Democratic Alliance (DA) calls on Minister of International Relations and Cooperation (DIRCO), Ronald Lamola, to explain his continued promotion of the ANC’s failed economic “transformation” policies in the face of overwhelming evidence that they strangle South Africa’s economic growth agenda internationally, and deter foreign direct investment (FDI).
In his address to the Black Business Council summit on Thursday, Minister Lamola made a rallying call for black professionals to ‘defend the revolution’ as if organised business is somehow beholden to prop up and defend ill-conceived ANC policy and legislation, despite empirical proof that they continue to drive away FDI and destroy jobs.
These comments run contrary to the Government of National Unity’s (GNU) statement of intent, which outlines rapid, inclusive, and sustainable economic growth as a key item on the basic minimum programme of priorities. At a time when South Africa has an immense window of opportunity to attract FDI and reinvigorate economic development through our G20 presidency, Minister Lamola’s comments are reckless and ill-informed, and risk derailing what should be a key moment for our economic diplomacy efforts.
The DA deeply understands the crucial importance of economic redress, but policies such as Broad-Based Black Economic Empowerment (BBBEE) have been repeatedly proven to be the wrong legislative vehicle through which to achieve it. The DA’s Economic Justice Policy, which uses poverty as a proxy for disadvantage and not race, ensures that redress and aid are targeted to the citizens who truly need it, instead of further entrenching a system of re-enrichment for the politically connected elite.
Professor William Gumede of the Wits School of Governance recently stated that under BBBEE, conservatively R1 trillion has been moved between under 100 people since 1994, ensuring that the same people have been empowered and re-empowered over and over, and locking millions more citizens out of opportunity and into an endless cycle of poverty and despair.
In addition, a 2008 study by the University of Pretoria, in which quantitative research was conducted to compare FDI inflows into South Africa with that of other emerging economies of a similar level of development, such as Brazil, Mexico, Chile, Nigeria, and Botswana, makes it clear that the ANC’s economic redress policies severely hamper our FDI drives. The research presents a stark indication that policies such as BBBEE impact on South Africa’s capability to attract FDI, while demonstrating that our country is losing competitiveness in attracting investment on the continent as a whole.
The fact that Minister Lamola not only continues to ignore the evidence disproving the efficacy of these policies, but continues to call for their promotion and defence, continues to signal to the international community and its investors that South Africa remains questionable as an investment destination. We cannot afford to continue down this path in the face of stagnant economic growth and ever rising unemployment.
We call on Minister Lamola to take seriously his role as the face of South Africa’s economic diplomacy agenda and embark on an evidence-based approach to FDI initiatives. South Africa does not need a DIRCO Minister too committed to his ideology to see the poverty that his comments and his actions further entrench upon the people of our country.
Regards
Ryan Smith MP
DA Deputy Spokesperson on International Relations and Cooperation