{"id":125121,"date":"2018-10-29T22:47:37","date_gmt":"2018-10-29T20:47:37","guid":{"rendered":"http:\/\/www.myza.co.za\/did-south-africas-investment-summit-mark-a-game-changing-moment-the-conversation\/"},"modified":"2018-10-29T22:47:37","modified_gmt":"2018-10-29T20:47:37","slug":"did-south-africas-investment-summit-mark-a-game-changing-moment-the-conversation","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/did-south-africas-investment-summit-mark-a-game-changing-moment-the-conversation\/","title":{"rendered":"Did South Africa’s investment summit mark a game-changing moment? | The Conversation"},"content":{"rendered":"

Did South Africa’s investment summit mark a game-changing moment?<\/a>: <\/p>\n

South African president Cyril Ramaphosa addresses a recent investment summit.<\/span> Flickr.com\/GovernmentZA<\/span><\/figcaption><\/figure>\n

To some observers, South Africa\u2019s recent investment summit led by the president Cyril Ramaphosa, seemed like much ado about nothing. Several of the projects announced had been incorporated into companies\u2019 plans for some time. And, combined with the fact that the summit had a showbiz style about it, it\u2019s tempting to see the event as little more than smoke and mirrors.<\/p>\n

But the summit could be more than the sum of its parts. It could be an important step forward to reviving economic growth in South Africa. <\/p>\n

One notable outcome was that, in one crucial respect, Ramaphosa nailed his colours firmly to the mast. After the confused and confusing sophistry of the era under Jacob Zuma\u2019s presidency, Ramaphosa committed his government to a market economy, where obstacles to private investment would be removed, where possible.<\/p>\n

This moment is reminiscent of 1980 in India. That year, Indira Gandhi committed the Indian Congress Party to business-friendly policies . Reforms were slow, picking up a little under Rajiv Gandhi a few years later. And the major structural economic reforms only took place in 1991 under India\u2019s new Prime Minister P. V. Narasimha Rao and the new Finance Minister Manmohan Singh. <\/p>\n

Yet, India\u2019s growth spurt clearly began after Indira Gandhi\u2019s signalling and Rajiv\u2019s initial tinkering. It didn\u2019t wait for Rao and Singh\u2019s dramatic reforms a decade later. <\/p>\n

This is consistent with contemporary analysis of economic growth. Recent thinking by renowned Harvard-based economist Ricardo Hausmann and colleagues suggests that what stimulates significant growth acceleration is often not major structural changes \u2013 it can be significant incremental shifts. <\/p>\n

The economists found that major structural reforms seldom preceded significant growth accelerations. As his colleague Dani Rodrik put it recently:<\/p>\n

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in economies that suffer from multiple distortions, small changes can make big differences. <\/p>\n<\/blockquote>\n

The small change made in India was a clear shift by the dominant political party towards business-friendly policies. <\/p>\n

Could the same be true for South Africa? Has South Africa reached it\u2019s own Indira Gandhi moment?<\/p>\n

Signals at the summit<\/h2>\n

Amid a great deal of fanfare, an audience of 1300 business and government leaders, and one of the globe\u2019s most successful entrepreneurs Chinese internet commerce magnate Jack Ma, Ramaphosa announced R209 billion worth of investment at the summit. <\/p>\n

It was important for the president to meet expectations by announcing concrete outcomes. But what was possibly more important was that he used the opportunity to send out a number of signals. <\/p>\n

To please his own constituencies in the African National Congress (ANC) and the unions, he referred to the end of the \u201cinvestment strike\u201d; some critics of business had said they were holding back their investments as a deliberate policy. <\/p>\n

More significantly, most of his messaging was aimed at reassuring the business community. He talked about how their investments and property were safe and how their factories were protected from expropriation by an independent judiciary and the rule of law. <\/p>\n

Land reform would continue, he said. But it would be \u201cfair and equitable\u201d. Transformation would continue:<\/p>\n

\n

while providing certainty to those who own land, those who need land, and to those who are considering investing in the economy. <\/p>\n<\/blockquote>\n

Perhaps the most telling signal was the apparently off-the-cuff remark he made dismissing the concept of \u201cwhite monopoly capital\u201d. At the dinner which followed the conference he said:<\/p>\n

\n

We have become accustomed to \u2026 treating our entrepreneurs and business-people (badly) and called them all sorts of names. We\u2019ve treated them like enemies and\u2026 (called them) white monopoly capital \u2013 that must end today.<\/p>\n<\/blockquote>\n

The term \u201cwhite monopoly capital\u201d is an accurate approximation of the distribution of economic power under apartheid, and much of the imbalance in economic power remains. In the Zuma era, the term was popularised by the now defunct public relations firm Bell Pottinger under contract to the Gupta family and was used by some as a cover for looting government and its agencies. <\/p>\n

Ramaphosa, who became a successful capitalist after he left Parliament in the mid-1990s, has now signalled that he wants to build trust between government and white owned businesses. This won\u2019t be easy. There are still elements in the ANC that reject capitalism while others want to continue using the term \u201cwhite monopoly capitalism\u201d as a battering ram. <\/p>\n

Credibility gap<\/h2>\n

South Africa\u2019s disadvantage is that the country\u2019s credibility has been damaged. After 15 years of transparent social democratic policies \u2013 from 1994 to 2009 \u2013 the country lurched into confusion under Zuma\u2019s presidency. The ANC government became opaque, volatile and unpredictable. <\/p>\n

The consequence was a loss of credibility in the Zuma era. Ramaphosa\u2019s biggest challenge therefore is to recover credibility. <\/p>\n

Ramaphosa and his advisors will be asking what can we do to rebuild credibility fast?<\/p>\n

The answer seems simple: those involved in state capture must go, looters must be punished, and constructive policies must be carefully prepared and implemented with authority and urgency. These include fixing the state owned enterprises as Finance Minister Tito Mboweni repeatedly pointed out in his recent budget speech , better regulation for the network industries (energy, telecommunications, water) and sorting out public transport systems. In addition, honest leaders need to be appointed to the criminal justice institutions. <\/p>\n

These all have been promised since Ramaphosa\u2019s first State of the Nation Address in February.<\/p>\n

The trickier, and implicit question that investment decision-makers will be asking is, is Ramaphosa\u2019s sway over government as strong as that of Indira Gandhi\u2019s in India in 1980? Or is the president yet to demonstrate complete control over the ANC? <\/p>\n

The answer, unfortunately, is probably that an election has to be reasonably convincingly won before he can win the credibility he so badly needs.<\/p>\n

\"The <\/p>\n

Alan Hirsch does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.<\/span><\/em><\/p>\n

Source:<\/strong> The Conversation \u2013 Articles (AFRICA)<\/a><\/small>
\n<\/p>\n

Read more on The Conversation<\/a>.<\/p>\n

Join the fun:<\/strong> Add Your event<\/a> | Submit a Press Release<\/a> | Add your listing<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Did South Africa’s investment summit mark a game-changing moment?: South African president Cyril Ramaphosa addresses a recent investment summit. Flickr.com\/GovernmentZA To some observers, South Africa\u2019s recent investment summit led by the president Cyril Ramaphosa, seemed like much ado about nothing. Several of the projects announced had been incorporated into companies\u2019 plans for some time. And, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[4584],"tags":[4635,8890,8930,2728,5093,5573,3576,573],"class_list":{"0":"post-125121","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-africa-news-2","7":"tag-africas","8":"tag-conversation","9":"tag-gamechanging","10":"tag-investment","11":"tag-mark","12":"tag-moment","13":"tag-south","14":"tag-summit","15":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/125121","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=125121"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/125121\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=125121"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=125121"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=125121"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}