Imagine a situation where you’re sitting alone in a restaurant. You realise that you’ve left an item in the car, perhaps a pair of sunglasses. You promptly tell the waiter that you’re leaving your laptop, phone, bag and other items, to quickly dash to the car and will be back in few minutes. You leave, get the item, quickly head back and resume your meal.
Sounds simple enough, but an unlikely situation in SA where the chances of finding your items untouched and still where they were when you left, are slim to none. However, that situation is not out of the ordinary in Dubai, part of the United Arab Emirates.
Dubai is generally considered a safe place in which to live and work. While this factor alone is not the reason for its economic success that has seen a small desert community by the sea turn into one of the world’s main economic hubs, it does play an important role in attracting foreign investment.
SA’s reputation on the global stage is the opposite, and this was something that came up in discussions among delegates at the world’s largest trade show held in Dubai.
Expo 2020 Dubai is running from October to March, bringing together more than 180 countries all competing for investment dollars from private- and public-sector players.
Attracting investment from foreigners has been a key part of President Cyril Ramaphosa’s economic growth plan, which included an annual investment summit before lockdown. Foreigners make up a large contingent of investors in SA’s equities and bond markets.
However, foreigners worry about the safety of their capital and staff when it comes to considering SA as a destination.
Crime in SA is no secret, and is a reality of living in the country. Social issues resulting from high unemployment and a growing gap between the rich and poor, among a host of factors, have created this stark reality.
According to the Citizen’s Council for Public Security and Criminal Justice, five SA cities — Johannesburg, Pretoria, Cape Town, Pietermaritzburg and Durban — all ranked as among the top 20 most dangerous cities in the world for 2021.
Foreign inflows are often thought of in terms of electronic movements of money in fixed income, equities and other markets, but there’s a physical reality to it as well.
If an international electronics company wishes to establish a presence in SA, it is likely they will bring a team of executives to get the operation off the ground. But how likely is an executive or businessperson, with a family for example, to agree to such a post if they worry about their physical safety and that of their family members?
The looting and unrest that affected up to 50,000 businesses across Gauteng and KwaZulu-Natal in July does not bode well for the country’s reputation, either. The government is well aware of the problem.
Back in 2008, the presidency commissioned a study on the effects of crime on local business development and investment. It was found that 70% of respondents said that they felt vulnerable to crime, while a quarter of all respondents expressed reluctance or unwillingness to expand or invest in their business because of the threat of crime.
Though the focus of SA’s efforts in Dubai are on driving foreign investment, studies have consistently shown the effect that crime has on local business. If these businesses fear their own home turf, what more for international players?
As said, crime is not a new issue that SA is grappling with. The realities and risks are known. The social impact is well documented.
While the memory of looting in July is still fresh and the country is out there trying to sell the SA investment story, more needs to be done to deter criminal actors, make SA a safer place do business, and perhaps move the needle — positively — on investment and economic growth.
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