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STEVEN KUO: Metros should get more serious about wooing investors

Local government must sharpen its international relations function

Steven Kuo

Steven Kuo

Columnist

Johannesburg's skyline. Picture: 123RF/VANESSA BENTLEY
Johannesburg's skyline. Picture: 123RF/VANESSA BENTLEY

The weekend before the municipal elections I spent half an hour in an Uber taxi chatting about politics and who the driver and I were going to vote for.

My interlocutor explained that while he hails from the rural areas of Mpumalanga, he lives in Johannesburg now with his family, and that as a city dweller he feels he owes no allegiances to any particular political party. He would choose the one that might make a difference by providing good services and growing the economy of the city we live in.

I was happy to admit that I hadn’t yet decided who to vote for, and gave the standard laundry list of complaints against the ANC, DA and EFF. I imagine most readers have had similar experiences, trying to make up their minds while complaining about the politicians we vote in every five years and lamenting that they all turn out the same.

Another thing I discussed with him was the issue of immigrants living in the Joburg CBD. I expressed scepticism that this thorny issue could be solved at a metro level, and said I thought some politicians were using xenophobia as a populist ploy to win votes. My driver explained that if you want to eat an elephant you need to start with a single bite. Someone needs to start tackling the illegal immigrant issue, and it may as well be the new Johannesburg metro government.  

As our politicians sit down with lists of priorities for different municipalities to wrangle over how to set up coalition governments, I would like to highlight the issue of international relations and how municipalities and metros are affected. Ultimately, international relations are about smoothing the path for investors to come to the metros and for the metros to learn best practices so they can better serve the people.

People tend to think the international relations function rests with President Cyril Ramaphosa and international relations & co-operation minister Naledi Pandor, perhaps with input from trade, industry & competition minister Ebrahim Patel and Thandi Modise at defence. But this is not the case in practice across the world.

For example, when I take business delegations to China the organisation and logistics are normally taken care of by the international relations departments of the respective metros. These officials help organise the trips, arrange meetings and even send a chaperon on the day to ensure the delegation is properly looked after.

SA metros and municipalities ought to take this function more seriously. It is crucial in attracting and assisting foreign investors.

From time to time I help Asian investors navigate SA’s investment landscape. It is a large market, and it is often the first base for companies wishing to enter the continent. Given the drive by Ramaphosa for foreign direct investment, you would think our officials would be fighting to meet potential investors.

Yet trying to get meetings with government departments whose job it is to assist with foreign direct investment is to drown in red tape. Our officials are obsessed with following protocol, and seem to spend more time sending investor questions to sister departments than helping solve investors’ problems.

Foreign investment is a tricky business. Investors need to set up a base, whether just a representative office, as they firm up their market research or establish factories and assembling plants. They need to understand how regulation works, get work visas, permits and licences. Large multinationals can outsource these tasks by using consultancies, but small and medium enterprises need to do their own research and their own running around.

Our metros should be prioritising attracting investors to set up in their cities. Their international relations departments should have sales targets and performance indicators for how much investment they have managed to attract. Officials shouldn’t fear stepping on the toes of sister ministries and departments. After all, the goal is for the investors to set up, not to observe protocol even if that means no investment.

• Dr Kuo, a former lecturer at the Shanghai International Studies University in China, is adjunct senior lecturer in the University of Cape Town’s Graduate School of Business.

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