Foreign investors are keener than South Africans on South AfricaOctober 14, 2010 4:00pm by Simon Mundy <http://blogs.ft.com/beyond-brics/author/simonmundy/> | Share <javascript:void(0)>
<http://blogs.ft.com/beyond-brics/files/2010/10/football-fan-south-africa-vuvuzela.jpg>For a people sometimes prone to pessimism about their country, the months leading up to this year’s football World Cup in South Africa saw a rare, sustained feel-good atmosphere. The fuzzy feeling extended to many foreign investors: the rand has risen inexorably this year as traders, tired with near-zero interest rates in the rich world, chase higher returns in South Africa’s bond market. But the public mood of optimism proved more fragile, dissipating within a matter of weeks after the World Cup, according to a new report. The survey, published on Wednesday by the Reputation Instititute, questioned citizens about their thoughts on issues such as effective governance and the business environment, as well as lifestyle matters. The institute’s number-crunching came out with an overall score of 67.8 points in January, but that fell to 56 points in August. The biggest fall was in the rating of the government’s performance - largely due to frustration with the state’s handling of the three-week civil servants strike<http://www.ft.com/cms/s/0/629d29d8-b454-11df-8208-00144feabdc0.html> that crippled schools and hospitals, according to the institute’s Dominik Heil. More than a month after the strike was suspended, trade unions are poised to agree a new wage settlement with the state - but it’s all too late to help national sentiment, says Heil. “South Africans suffered a massive drop in confidence in their country, suggesting that the hugely positive spirit engendered during the World Cup was seriously dissipated, if not destroyed, by the public service strike,” he told beyondbrics. As the vuvuzelas faded, South Africans had to return to the reality of a slowly recovering economy that continues to shed jobs; persistent infighting among senior politicians; and a woefully dysfunctional education system that blights the prospects of many young people. Wednesday saw the revelation that education departments in three of the nine provinces, with a combined budget of R44bn, had submitted annual financial accounts so poor that the auditor-general was unable to declare an opinion on them. Such failures contributed to a decline in perceptions of effective government from 60.9 to 34.3 points on the Reputation Institute scale. Still, there’s better news from abroad, where the World Cup helped the country’s reputation score to rise by 4.5 points to 49.1, moving it from a position alongside Venezuela and Ukraine to one nestling among the likes of Peru and Thailand. This helps to back up hopes that the warm welcomes, natural beauty and solid infrastructure on show in June and July will encourage a surge in tourism. A corresponding increase in long-term foreign investment had been anticipated too - but appetite has been dampened by the debate over mine nationalisation<http://blogs.ft.com/beyond-brics/2010/09/27/110171/> . Despite repeated government denials that nationalisation is a policy option - and opposition from such unlikely corners as the Communist party and the National Union of Mineworkers - the influential youth league of the ruling African National Congress have won a commitment that the proposal will be considered at the party’s 2012 conference, following an extensive investigation. So overseas investors are happy to put their money to work in South Africa, says Dawie Roodt of Efficient Group, as long as they can get it out quickly. For all their apparent regard for South Africa, foreigners are still concentrating investment in the bond market - where injections of “hot money” can be swiftly reversed in case of trouble. http://blogs.ft.com/beyond-brics/2010/10/14/foreign-investors-keener-than-south-africans-on-south-africa/ -- News is something someone, somewhere doesn’t want to read. The rest is PR.— Claud Cockburn www.kwelaxpress.co.za -- You are subscribed. This footer can help you. Please POST your comments to [email protected] or reply to this message. You can visit the group WEB SITE at http://groups.google.com/group/yclsa-eom-forum for different delivery options, pages, files and membership. To UNSUBSCRIBE, please email [email protected] . You don't have to put anything in the "Subject:" field. You don't have to put anything in the message part. All you have to do is to send an e-mail to this address (repeat): [email protected] .
