TCS Editors: America's case against SA is right, Pretoria should take note

This article was first published by The Common Sense.The Common Sense editorial board argues that Washington's concerns about South Africa are substantive, not manufactured. Empowerment policy deters investment, the Expropriation Act permits seizures below market value, and South Africa's foreign policy is openly hostile to US interests. Growth sits at 1%, unemployment exceeds 30%, and ANC support has fallen below 40%. The board says government and media have obscured these facts with conspiracy theories, deflecting attention from the Afrikaner issue rather than the substance. It concludes that addressing America's demands, not denying them, is in South Africa's own long-term interest..From the Editorial Board of The Common Sense.The South African government and much of the media have obfuscated, evaded, lied, and invented wild conspiracy theories about what gave rise to American concerns about the investment environment in South Africa in an effort to lead the public away from the fact that the US issues are valid and substantive and have to be addressed if South Africa’s economy and democracy are to recover..The Americans have three fundamental issues with South Africa.The first is that empowerment policy acts as a non-tariff barrier to investment and imposes obligations and costs on American investors in South Africa that are at odds with what America demands of South African investors.The second is that South Africa’s Expropriation Act allows the seizure of American investments, assets, and intellectual property for less than their market value.The third is that South Africa’s foreign policy is hostile to United States (US) interests.A fourth issue, that of Afrikaners, grabs the headlines but is more a stick to beat the South Africans with, and a peripheral domestic American political device, than a material issue that stands in the way of improved US/South Africa relations.Below follow selected highlights of the government and the media’s evasion and mythmaking and why their efforts fail.South Africa must have empowerment policies in order to become a more equal society.That is false. South Africa needs to increase its investment rate to grow its economy in order to create jobs if it is to become a more equal society. In taxing capital, South Africa’s empowerment policies are a key reason why investment stays away and hence why inequality persists.South Africa is a sovereign state and the US has no right to interfere in its internal affairs.False again. If US firms are to invest in South Africa, they get a say in domestic policies. South Africa’s government is, of course, within its rights to ignore that say, as it has done, but must then accept the price, which is that the economy is only growing at 1% and the unemployment rate is over 30% whilst African National Congress (ANC) support levels have fallen to under 40%..Read more:.Van Staden from Washington: 122 race laws since '94 - why the US is paying close attention to SA.It is up to South Africans to decide what policies they wish to have.If that were true, then the local media and the government would, for the better part of a decade, have advocated and acted to scrap race-based empowerment policies entirely in favour of policies that enable higher levels of investment. Public opinion is starkly at odds with what current empowerment policy demands of investors and what it delivers to the economy. The same is true for expropriation.The Expropriation Act applies only to farmland and only in an extraordinary and limited set of circumstances where it is necessary for land reform.This is a complete falsehood. The Act allows the taking of any fixed or movable property for less than its market value. Land reform could best be achieved by underwriting cheap loans to commercial black producers with viable business plans.The South African government has never expropriated anything without compensation and has no intention of doing so in future.False again. It seized mineral rights and water rights and is actively pursuing the nationalisation of private healthcare whilst considering the same for pension funds and is further considering a scheme of prescribed assets which would force funds to invest in government projects. The Expropriation Act is necessary to enable all of that.All South Africans are murdered and attacked at the same rate and there is nothing unique about farmers.False again. Farmers, black and white, are attacked and killed at a multiple of the rate for the broader population..South Africa takes a non-aligned and morally virtuous line on foreign policy.Haha. And economic reforms are well underway, state capture is being defeated, the ANC is on the road to recovery and rehabilitation, and the economy has turned a corner. In fact in New York today, Ronald Lamola, the Minister of Foreign Affairs, has been advertised to appear with Democratic Socialists of America and Vermont Senator Bernie Sanders to launch an attack on US foreign policy at an event that has shared a link to the Hague Group, which is a global lobbying network sponsored by South Africa to counter American and Israeli foreign policy.Investors have no issue with empowerment policy and don’t fear being expropriated.Some of those that are already here may say that, especially when prodded by South Africa’s government, on whose good graces they depend for licences, subsidies, and not being expropriated. But why then is the fixed investment rate so low and the growth rate that flows from it so low too? Not slightly below the average of peer economies, but less than half the rate despite South Africa’s skills, resources, infrastructure, financial systems, and the lifestyle it offers to upper-middle-class expats. It would be a fool who convinced himself that this had nothing to do with capital taxation and expropriation..The US is led by a network of white supremacists in alliance with Solidarity and AfriForum seeking to undermine the success of South Africa’s democratic transition and repopulate America with South African whites.The Afrikaner issue is, at best, a poorly thought-through stick to beat South Africa’s government with, which some figures in Washington’s post-liberal elite may think has some peripheral resonance in American politics. The manner of the US application of the Afrikaner issue has, however, undermined the US case on its substantive concerns and offered Pretoria an exit to discredit those concerns. On repopulating the heartland the number of Afrikaners involved is too small to sway anything in American politics and the heartland is in any event solidly Republican. AfriForum and Solidarity have the dream of building a resilient Afrikaner community in South Africa and see America’s offer to take some of the Afrikaners away as a threat to that project. And, the ultimate counter: if you wanted to crash South Africa and the ANC you would encourage its government to insist on more and stricter racial empowerment criteria and to expropriate more than they already have, not pressuring them to stop and reverse course.It follows that the idea that the US has launched an “attack” against South Africa, as the dim-witted The New York Times and the like continue to parrot is false too. What kind of attacker says, “hey we want to invest and trade more of our skills and capital in your economy to create new jobs and wealth and infrastructure, and help you out of the mess your economy is in, but to do that please take away the policies that make investment impossible”?.Read more:.SA joins Colombia, South Sudan on short list hit by this US visa tool. Meservey unpacks why.Cut through all the fakery, B-grade analysis, and conspiracy theories, and you are left with the fact that the US is right on the substantive issues, that it has more than a right to express itself on those issues, and that, on both counts, its actions are in the best long-term interests of South Africa’s future as a successful and free society. It is telling that through all the drama and hysterics of the last week not one mainstream publication or business leader has said this. Instead, most have leaned into the admonishment of America. South Africa is trapped in its low-growth rut, and its people suffer from such terrible unemployment and poverty, for that reason as much as for the intransigence of its government..This article was first published by The Common Sense and is republished with permission..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.

TCS Editors: America's case against SA is right, Pretoria should take note

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