SA VS IN­DIA AS AN IN­VEST­MENT DES­TI­NA­TION

Finweek English Edition - - INSIGHT CHHATRAPATI SHIVAJI TERMINUS, MUMBAI -

While Bar­clays Wealth’s Henk Potts be­lieves that In­dia will be the big­gest emerg­ing mar­ket in the next few years, he still views Africa as the fi­nal fron­tier for in­vestors.

Even though South Africa, and Africa, face chal­lenges around sta­ble energy sup­ply, labour in­sta­bil­ity, cor­rup­tion, hunger and dis­ease, he still views SA as the fi­nan­cial gate­way into Africa. “In­dia faces sim­i­lar chal­lenges as Africa, such as in­fra­struc­ture needs and a move to­wards ur­ban­i­sa­tion, but In­dia has done a bet­ter job at en­cour­ag­ing for­eign in­vestors com­pared to SA, which has done well with do­mes­tic con­sump­tion. Africa has ex­cit­ing po­ten­tial, but fun­da­men­tal is­sues need to be ad­dressed, which In­dia is do­ing proac­tively.”

In con­trast, In­vest­ment So­lu­tions’ Glenn Silverman is of the opin­ion that com­pared to In­dia, SA is still ahead in many re­spects and re­mains a high-po­ten­tial coun­try. “In fact, In­dia and the rest of the Brics have much to learn from us. In­dia still has many chal­lenges that make our prob­lems seem much smaller. These in­clude mass poverty, cor­rup­tion and red tape,” he says. “How­ever, In­dia seems to be tak­ing steps for­ward, while SA seems to be stag­nat­ing. In­dia is in the for­tu­nate po­si­tion where it has been given a clear pro-growth and econ­omy man­date from the public. SA, on the other hand, seems to be wrestling with its iden­tity, lack­ing a vi­sion and will­ing­ness to achieve it. And although the Na­tional De­vel­op­ment Plan pro­vides a good road map, there is lit­tle buy-in and pol­icy of­ten ap­pears to con­tra­dict it.”

SA will do well to avoid ad­di­tional bar­ri­ers and re­duce oth­ers to make it eas­ier to do busi­ness in SA, he says. “For global in­vestors and busi­nesses, the sheer size of the mar­kets in China and In­dia present enough op­por­tu­nity for them to put up with bar­ri­ers and in­con­ve­niences. South Africa does not have the same lux­ury.”

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