Some investments cost

Inviting investment from the Arabs, Russians and Chinese is like putting plasters on foul-smelling septic wounds. Only structural changes to the economy will do – reward success, punish failure, strongly protect property rights, ensure low costs for doing business, punish crime and graft, maintain and improve civil infrastructure. This means a complete overhaul of ANC policy since the ANC is doing the opposite.

What creates wealth is not investment but increasing real consumer demand. Increasing real consumer demand comes from improving the real education, opportunities and skills of the people. An increase in consumer demand will lead to an increase in investment demand. SA and foreign banks are well able then to finance the required investment.

Investing before consumer demand exists is putting the cart before the horse. Unless we invest for foreign demand, but then we have to have a comparative advantage in those goods meant for export and be able to absorb the high cost and shortcomings of the labour market, which is subject to continuous strikes and high wage demands.

Inviting the Arabs, Russians and Chinese to invest in areas which are not profitable will mean that years later the taxpayer and the economy will be at risk. Look at how many African, Asian and South American countries have gone down this path and suffered from “ideological” investment deals based not on profit, but other criteria. They went into debt owing billions.

The government should not make investment decisions. That’s best left to the market place. Also, the government having its hands in the investment cookie jar means more corruption at the expense of the taxpayer. Welcome to Mamparaland. – Naushad Omar, via e-mail