By John Kane-Berman
Can this be the turnaround the world has been waiting for?
As ratings downgrades loom Finance Minister Pravin Gordhan and bevies of businesspersons have been staging roadshows desperately trying to convince foreign investors that all is not lost with South Africa. They could have stayed at home. Jeff Radebe, minister of performance monitoring and evaluation, has everything in hand.
The Cabinet is aware of the risks of actions that "may deter potential investors who may want to do business in South Africa". Accordingly it instructed Mr Gordhan and two of his colleagues to have what Mr Radebe described as a "constructive engagement" with the banks that severed their relationships with Oakbay, one of the Gupta family's companies.
Obviously, one can't allow over-fastidious banks to undermine foreign investment in South Africa by getting rid of some of their clients. If any Gupta lookalikes want to set up shop in South Africa, President Jacob Zuma's cabinet will no doubt ensure that the banks roll out the red carpet for them as well.
Other "potential investors" should not be shy to seize this chance. Those who would like to buy farms should hotfoot it to Mr Radebe's door to point out that legislation in the pipeline to bar them from purchasing agricultural land is a deterrent to doing business in this country.
What's good for the Guptas is surely good for them as well. Mr Radebe could have a quiet word with the minister of rural development and land reform, who will surely not want to undermine his own government's new welcoming policy for foreign investors.
Then there are would-be mining companies planning to invest in South Africa - assuming that there are any such companies left. One of the trio designated for the "constructive engagement" with the banks on behalf of the Guptas is none other than Mosebenzi Zwane, minister of mineral resources.
He will no doubt lend a sympathetic ear to any aspirant foreign mining company wailing about the requirements of his new black economic empowerment charter for the industry. All he has to do is to amend the charter to exempt foreign mining companies from its investment- deterring provisions in accordance with our new investor-friendly policy.
Just to be on the safe side, foreign investors would be well advised to insist on exemption from the fines and prison sentences for violations of employment equity and black economic empowerment requirements. They will have a powerful case. Nothing is more calculated to chase away foreign businesspersons than seeing one of their colleagues in the slammer. The threat should obviously be removed forthwith. Labour Minister Mildred Oliphant, the third member of the cabinet trio, will no doubt be happy to oblige, as will Rob Davies, her colleague over at Trade and Industry.
Foreign security companies will be able to relax. A government determined not to deter foreign investors will surely not proceed with the 51% local ownership requirement. All those foreign governments that have been complaining about the termination of their bilateral investment treaties with South Africa can also relax. Perish the thought that South Africa should do anything to deter their investment.
The deputy minister of public works, Jeremy Cronin, will have the perfect excuse to dump his expropriation bill. Or he will at least be able to amend it to exempt any foreign-owned property from expropriation, so that only local investors will now need to worry.
As for all those nasty international credit rating agencies, well, they can put all their threats of downgrades on hold. South Africa is once again open for foreign business. And all thanks to the Guptas for convincing President Jacob Zuma's government not to do anything to damage foreign investment. Amazing what one family can do where all the business lobbyists, foreign governments, opposition politicians forever bellyaching about threats to foreign investment failed.
* John Kane-Berman is a policy fellow at the South African Institute of Race Relations, a think-tank promoting political and economic freedom.
Read the column on Politicsweb here.
