Investment boycott is perverse
Following the halting of lending to six state-owned enterprises (SOEs) by Futuregrowth, there has been increasing calls for an investment boycott or even a tax strike in SA. I believe such steps would be perverse, considering the fact that even during the worst days of Apartheid, no such steps were implemented by SA firms or taxpayers. An investment boycott or tax strike would be very damaging to the SA economy and risks fuelling the flames of division within our country even further.
The aim of an investment boycott or tax strike would be to force the government to take a number of steps supported by some opposition parties and some sections within big business. These steps would likely include the cessation of the actions against Pravin Gordhan, the halt of the nuclear project, increased oversight of SOEs, seriously addressing corruption and probably the resignation of President Jacob Zuma.
In my opinion, an investment boycott or tax strike would represent the nuclear option for SA, which would be very damaging to our economy and to our most vulnerable citizens. It could limit the government’s ability to deliver on its promises: including the National Development Plan; it could put pressure on infrastructural spend; and could even limit its ability to fund budget increases, which could put pressure on areas such as education, health, etc. In addition, it could damage the country’s reputation if it were to lead to a reduced ability by the country to finance its debt. If we are looking for a credit rating downgrade, an investment boycott or tax strike would go a long way to achieving it.
In addition to the damage that such actions could cause to our economy and reputation, it also is not guaranteed to succeed. Even overwhelming participation in such actions (which would be needed, but is unlikely, in my opinion), may lead to the opposite reaction from the ruling party than is desired. It is much more likely to unify the ANC and cause it to close ranks. If this were to occur, the pain experienced by our country would be extensive and long-term.
In addition to the economic and reputational damage that an investment boycott or tax strike could cause, it could also be very harmful to the social fabric and our desire for unity and equity. It would serve to flame the fires of the “white capital” narrative that is increasingly being bandied around in our country and is creating increasing divisiveness. And it would be correct to do so. The plain truth is that the same people and institutions who are calling for an investment boycott or a tax strike, were silent on these topics during Apartheid.
There is no doubt that international sanctions against the National Party played a meaningful role in leading to the demise of Apartheid. However, it was never supported by SA business or by SA opposition parties. Not even the Progressive Federal Party (PFP) who was the precursor to the DA supported these actions. No large SA corporates became involved in sanctions and none of them came even close to an investment boycott. This was despite significant human rights abuses and disenfranchisement perpetrated by the Nationalist government. There was also no real talk of a tax strike by South Africans.
We can see the lack of action by SA big business, opposition parties and white citizens in the 1980s and before as complicity. We can choose to believe that they were happy to live under Apartheid and for many, I am sure this is true. However, we must not under-estimate the impact that fear could have had on inaction. An investment boycott or tax strike by SA big business and white citizens would likely have led to a substantial crackdown by the NP government, which was too ghastly to contemplate by many. And here is the rub. We lived in a police state during the 1980s, under an almost constant state of emergency. We lived in a country that was not free, even for the beneficiaries of the system. That has changed.
Say what you will about recent actions by the ruling party, about corruption, about lack of accountability, about our President being seemingly untouchable, we still live in a free and democratic country. If you have any doubts about this, go and have a look at what newspapers write every single day about the government and the ANC, without fear or serious reprisal. Go and have a look at what people have to say on social media and how many of them are arrested for it. Gone are the days when you had to watch what you say, who you interact with, who you gather with, who you protest against. Gone are the late night knocks on your front door, the arrests, the detention without trial, the “suicides” of those in custody. If you are still not convinced, go and have a look at who governs Tshwane, Johannesburg and Nelson Mandela Bay metros. If we were not substantially free in this country, if we did not have a vibrant democracy, this would never ever have happened.
In addition, go and have a look at what ANC loyalists and previous leaders have to say about the SARS wars, about Nkandla, about the constitutional court ruling and about electoral losses. The vast majority of South Africans and leaders on both sides of the aisle can see what is going wrong with our country and are adamant to make it better. The majority of people are on the right side of history and we will see positive changes in the near term. I am confident and optimistic.
However, if you want to divide people, if you want the racism card to be played more often, if you want the “white capital” narrative to grow, if you want to devastate the economy, if you want to hurt the most vulnerable and if you want to damage the country’s reputation, then you must support an investment boycott or a tax strike. I seriously hope that this is not what you want.
I therefore call on opposition parties to speak out against these voices looking to damage our country. Refer back to your and your predecessors’ arguments against sanctions in the 1980s. I call on big business to distance themselves from these moves. Remember what side of the argument you were on during Apartheid and consider what this could do to the economy. I call on ordinary South Africans to be patient. We are moving in the right direction and forces for change are gathering momentum. Trust that the hard-won democratic process allows for your voice to be heard.
Are you a supporter of an investment boycott or tax strike and why? Are you not concerned about the negative impact this could have on the economy and ordinary South Africans? Would this risk the hard-won unity that is developing in SA? Would it not add fuel to the “white capital” narrative and racism allegations? Should you not have the same approach as when you were against sanctions in the 1980s? I would love to hear your feedback.
In the mean time, keep your talking straight!
#InvestmentBoycott #TaxStrike #Futuregrowth #SARSWars #Sanctions