SA’s diplomatic strategy drives diversified global ties
Francois Theron’s letter presented South Africa’s international relations through a narrow and outdated zero-sum lens (“SA’s foreign policy does little to help trade imbalance with China and India”, May 28).
The suggestion that South Africa must choose between the Brics bloc and the EU misunderstands both modern diplomacy and the realities of an interconnected global economy.
A mature foreign policy is not built on exclusive allegiances or ideological camps. South Africa’s strength lies precisely in its ability to engage constructively with multiple global partners at the same time. Our relationships with China, India, the EU, the US and the broader African continent are not mutually exclusive. They are complementary pillars of a diversified foreign policy aimed at advancing development, trade, investment and national sovereignty.
China remains South Africa’s largest single trading partner for a reason. The relationship has created opportunities in infrastructure development, industrialisation, manufacturing, renewable energy, technology transfer and investment. Chinese-supported projects continue to contribute to jobs, economic activity and long-term development across sectors critical to our growth ambitions.
To describe this relationship as “colonial” ignores the agency of South Africa itself, which has actively and strategically pursued co-operation with China over many years through bilateral agreements, trade forums and developmental partnerships.
Trade imbalances are legitimate matters for discussion but they are not unique to China, nor are they solved by retreating into simplistic geopolitical camps.
The real challenge for South Africa is to strengthen domestic productive capacity, expand exports, support local industry and improve competitiveness while maintaining broad international partnerships that create opportunities for growth.
South Africa does not need to choose between Beijing and Brussels. Our national interest is best served by strategic diversification, pragmatic diplomacy and partnerships that contribute meaningfully to economic development, social progress and opportunity for our people.
Michael Andisile Mayalo
China-South Africa Youth Federation
Index investing outpaces most advisers over the long term
It’s no surprise that investment advisers and asset managers are never heard to say: “Invest in the indices; you will do far better than if you followed my advice!”
Of course they don’t, it would immediately put them out of a job. No more fat fees for pretending to know which companies are going to outperform the index and then making excuses when they don’t.
The article by Brian Kantor and Carig Evans was pure hype (“Active investing and the risks in index tracking” May 28). They are honest enough to report the outstanding results of JSE and US indices but cannot bring themselves to the obvious conclusion: “You don’t actually need active investment advisers; just buy the index.”
Instead, they bizarrely cite an example of the benefit of holding an index: if one share declines more than the average, it is not a disaster since the other shares in the basket offset the single decline. That’s the whole advantage of buying an index as opposed to selecting an individual share like Steinhoff, or Revlon or Enron or Tongaat. When they go bust, you lose everything.
They then add more wise words of caution: an index can go down, so it’s not immune from risk. No! Really? Who would have thought? Investing in shares has been proven to be the outstanding wealth generator in our lifetimes. It makes cash and bonds look silly.
Will the indices go down? Yes, of course. The Nasdaq index dropped over 30% in 2022. In the three-and-a-half years after that it rose 150%. Over the past 10 years the Nasdaq has increased by about 17% a year, including the crashes. That outperforms by a huge margin pretty much every investment adviser, and many statistical surveys show it.
There are two excuses given by portfolio managers for underperforming portfolios. The first is “we need to charge higher fees to pay for our team of highly trained experts”. Indeed, their fee of 1% is five times more than the 0.18% charged by an exchange traded fund that tracks the Nasdaq.
The other excuse, also aired in the article, is “we are protecting our risk-averse clients from market declines, so we invested in lots of non-equities like cash and bonds”. I wonder if they explained to these “risk-averse” clients that history shows they would do far better by buying an index and sitting through the inevitable declines than diversifying a significant part into underperforming assets.
Investors whose aim is to protect against crashes will never do as well as those who invest to take advantage of bull markets. But neither needs advice from asset or portfolio managers.
Jonathan Schrire
Kenilworth
How does changing ownership patterns benefit the poor?
Gauteng premier Panyaza Lesufi argues that frightened migrants are exploited by ruthless employers, in the same way as pre-1994 migrant labour (“Illegal immigration strains Gauteng’s services and economy”, May 29).
That is a stretch — what about the ubiquitous evidence that foreign workers have a better work ethic and are generally preferred? Is this due to fear or is it absence of entitlement?
It’s nonsense to imply that our economy needs transformation in ownership patterns, in other words that it is too white-dominated. How does Lesufi explain that the black-dominated state-owned enterprises (SAA, Transnet, Denel, for example) and public hospitals (Charlotte Maxeke, still not restored five years after the fire, not to mention R2bn looted from Tembisa Hospital) perform so much worse than the “skewed” private sector?
How does this “correct” ownership pattern benefit the poor?
Willem Cronje
Cape Town
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