Posted on November 18, 2011
If South Africa does not take advantage of its geopolitical and institutional competitiveness it risks falling behind its emerging counterparts, says Abdullah Verachia, director of emerging market consultancy firm Frontier Advisory. Physically, South Africa is positioned favourably between Brazil and India, the other two members of the IBSA grouping, which comprises India, Brazil and South Africa. South Africa is also a member of BRICS, a powerful group of the world's fastest growing emerging markets of Brazil, Russia, India, China and South Africa. Combined with access to markets in the SADC region, South Africa is in a position to grow its economy through international trade substantially. India alone has a middle class of 400 million, which is larger than the entire population of the US. Speaking at the Gordon Institute of Business Science, Verachia said South Africans as a whole need to take responsibility for improving the country's global competitiveness. One major hurdle was the notion that education is a public sector issue. In other countries the private sector was directly involved in the funding and curriculum setting in business schools. "That way the private sector advises tertiary institutions on the skills it requires. In this country you'll find there are many graduates in industries where there is no shortage of skills," said Verachia. The recent World Economic Forum global competitiveness report - which ranks South Africa four places up from last year at 50 - lists inefficient government bureaucracy, an inadequately educated workforce and restrictive labour regulations among some of the most problematic factors for doing business in the country. Verachia argued that South Africa was particularly competitive on an individual and corporate level, but fell short of fulfilling its competitiveness potential on the international stage. "Unfortunately we are doing it the wrong way around ... people need to understand that if our country does well then our companies will do well and we, individually, will also do well," he said. The first step to tackling our economic stagnation, Verachia suggested, was to hold a Codesa-like meeting with the government, academia, business and the youth regarding the economic future. Key issues to discuss should include the rand's volatility, political investment and an official foreign direct investment policy, he said. "South Africa is not the only place in Africa that these Asian economies can invest in."
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