Closed Economy for South Africa.

Has the time not come for South Africa to have a closed economy? The reason for this statement which a lot of people will think I am crazy for making, are manifold and varied. I will try to justify my statement by raising various points. Some of the main ones are as follows:-

  1. The words “free trade” seem to conjure up an euphoric utopia like syndrome in the minds of people. It is bandied about as the panacea for all our economic ills which will solve unemployment and create prosperity. When it comes to economics we need to realize that most countries are not really your friend unless there is something in it for them. We sometimes confuse charity and economics.
  2. We have become the dumping ground for the Western world and especially the Eastern Block countries. Do we really need all the cheap and nasty goods from the east. The imports of cheap clothing has literally brought our clothing manufacturing industry down. It has cost a lot of people their jobs. Do we really need inferior quality subsidized chickens from America. A lot of people at Rainbow chickens are losing their jobs because of these imported chickens. The quality is inferior and I personally will not buy them.
  3. The cheap clothing that is being imported has not created any noteworthy numbers of our own people getting jobs. The reality of the situation is that our towns and cities have a multitude of little Chinese shops. These people employ their own family members with hardly any locals getting work.
  4. Do we need to be importing fancy sweets, exotic foods, fancy motor cars and a myriad of other types of luxury goods. We have wonderful agriculture products of our own, which quality wise compete with anyone in the world. There is nothing wrong with South African sweets.

How do we fix the mess that we are in. This will not be easy. It will require controls by the authorities who must be beyond reproach as far as their ethics are concerned. In other words they just have to be plain honest. The following are some of the steps I feel should be introduced. A lot of people will hate me for this but here goes.

A   All imports to be subject to an import license. The first criteria to be used is whether we can make this item in South Africa. We have some of the best engineers and technology in the world plus all the raw materials we need. If it can be made no license no import. I believe we have the capability to manufacture almost anything. A lot of people will use the counter argument of scale of economy against this concept. The other criteria to be used is whether  the item is really necessary and is of benefit to South Africans. To say you want to import a sweet because it tastes nice is not a good enough reason. Quotas to be imposed on items like these when a license is issued.

Higher customs duties to be levied with the exception of items used in a manufacturing process.

A lot of people will say that my ideas will kill exports. I do not think so. We have an awful lot of items that the rest of the world actually wants. We have the quality. Rebates to be offered to firms exporting as an encouragement to do so.

In conclusion various trade agreements have been entered into with various countries. What worries me is that a lot of these appear to be agreements of intent and cooperation signed by our President. Nice sounding words mean nothing without action. The lack of the nitty-gritty is what worries me. I know the trade agreement between us and America is very specific.

South Africa needs a lot more of its own factories. These have to be spread right across the country. For example why do we not have a large canning and processing plant in Tzaneen. Why not have a weaving and textile factory in Marble Hall. The manufacturing of products from stainless steel in Middelburg on a very much bigger scale than is presently taking place. The more that we have beneficiation of our raw products the better it will be for South Africa.

The foregoing is very much a tongue in cheek post. I do not have all the answers but something has to change.

 

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