Mar 11
A New South African Recipe!
On every measurement metric, South Africa is worse off today than it was in 2008. The financial crisis didn’t help, but it was an excuse to turn South Africa onto a path of perpetual decline.
Since 2008, education has declined, South Africans earn less per capita, inequality has grown, there are ever-increasing numbers of social grant recipients being paid for by borrowing more. Unemployment has risen to nearly half of the adult population, and economic growth barely registers 1% per annum.
If we were to research what not to do to create employment and economic growth, we wouldn’t have to look any further than the economic policies adopted by South Africa over the last two decades.
The saddest part about South Africa’s decline is that the world has many examples of the recipe to create economic prosperity and growth. South Africa has chosen not to follow those examples.
Instead, South Africa has chosen to follow a recipe that has time and again proven to be a complete failure.
South Africa has chosen the centralised command and control recipe, with a double scoop of “transformation and redistribution”.
As a side order, South Africa has concocted a sauce of crony capitalism and social democracy, with a stir of incompetence and non-accountability. It is as if South Africa has taken the worst ingredients possible and tried to mix them with a sprinkle of racial propaganda to achieve “a better life for all”.
As a result of this foul dish, South Africa has become well known for its best export. That being, highly skilled taxpayers. South Africans are becoming a class of immigrants in other countries, taking their money and experience with them.
The recipe for turning our menu of putrid gruel into a Michelin star service is not to continue doing more of the same while wishing for a better outcome. We need a new chef and kitchen crew!
The solution to creating employment and economic growth lies in South Africa’s ability to create an entrepreneurial class of risk-takers and problem solvers. To do this, all sources of resistance and risk that have come about in pursuing a command-and-control ideology must be scrapped.
The following ingredients are not welcome in the small and medium enterprise (SME) sector if we want to produce a menu that consists of growth and employment: exchange controls, race-based or nationalist quotas, draconian employment regulations, and government licensing.
The following ingredients are a must: a voucher-based education system, significant tax incentives for creating employment in SME businesses, freedom to attract critical skills from anywhere in the world, and safety to conduct business.
These ingredients are the tip of the iceberg. A complete disruption of the current circumstances is required.
Justin Spencer-Young
