South Africa should step up efforts to attract investment to deal with populism

By Hu Weijia Source:Global Times Published: 2017/3/8 0:23:39

Land access in South Africa has become an issue attracting global attention after the country's president Jacob Zuma called for "the constitution to be changed to ensure greater access to land for the nation's black majority and indicating that the government may consider expropriating land without paying for it," according to Bloomberg news on Friday. Concerns regarding this over South Africa's uncertain investment environment and policy stability are expected to surface among global investors.

A jaw-dropping rise of populism in South Africa deserves serious attention. At the end of February, police used rubber bullets and tear gas to disperse anti-immigration protesters amid accusations that foreigners were taking jobs from locals.

South Africa's unemployment rate stood at 26.5 percent in the last quarter of 2016 and its economic growth remains almost stagnant. The country's current economic hardship is one of the main reasons behind its rise of populism, but embracing populism will further damage the economy, leading to a vicious downward spiral. It will be a worrying trend if policymakers take an ambiguous attitude toward populism in a bid to win voter support.

One solution is to give top priority to spurring economic growth and increasing job opportunities. Ethiopia's experience is perhaps of some value to South Africa in this regard. Once a nation that faced food security threats, Ethiopia's economy has grown at a rate of roughly around 10 percent annually in the past decade. The country has adopted appropriate policies to vigorously develop infrastructure and is currently ramping up efforts to attract foreign investment. Quality-of-life standards are catching up fast with those in other African nations. Despite occasional populism and nationalism in Ethiopia in the past years, its rapid economic growth, which could serve as a stabilizer for society due to continuous improvement of people's livelihood, has helped the nation survive social unrest.

The most urgent action for South Africa is to step up efforts to attract investment, which would help lower the nation's unemployment rate. To some extent, rapid economic growth could enable the country to deal with social problems including populism. With a boom in outbound direct investment, China is expected to be willing to strengthen economic cooperation with South Africa. Local authorities should show their courage at this time in attracting investment to bring new job opportunities to the nation.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn



Posted in: EYE ON THE ECONOMY

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