Details

Created on Friday, 20 April 2012 09:47

L'onorevole Mario Ambrosini, parlamentare eletto nelle liste dell'Inkatha Freedom Party e portavoce del suo partito nella Commissione Industria e Commercio, è l'autore dell'articolo che pubblichiamo qui di seguito, con il quale rifiuta le Special Economic Zones proposte dal ministro Rob Davies e propone di creare invece la "Repubblica di Hout Bay", un territorio, sia pur di piccole dimensioni, in grado di realizzare in Sud Africa le stesse condizioni di sviluppo che si riscontrano in piccoli stati come Monaco, Lichtenstein, Hong Kong, Macau e via dicendo, per non parlare di Dubai.

A titolo di curiosità ricorderemo che negli anni ottanta, lungo la statale che collega Camps Bay a Hout Bay, sfiorando Llandudno, i residenti di queste due ultime località avevano eretto cartelli stradali che proclamavano a tutti gli automobilisti la presenza di due repubbliche indipendenti, a significare il rifiuto della linea politica del governo di allora. Se la teoria economica di Ambrosini troverà orecchie disposte ad ascoltare forse quei cartelli torneranno d'attualità a partire dalle periferie di Camps Bay e di Bishop's Court, dove secondo il parlamentare dovrebbe cominciare la nuova "Repubblica di Hout Bay". Ecco il suo articolo:

SEZs, IDZs and Principates

Minister Rob Davies’s new Special Economic Zones [“SEZs”] fall within the politicians’ old syllogism: we have economic problems: something needs to be done: other countries are doing this: we must do this.

Reality may sober the dream.  SEZs are supposed to work where the Industrial Development Zones [“IDZs”] failed.  The IDZs were placed in the most strategic economic nodes: at international airports and seaports.  Taxpayers poured into them R5.3 billion directly, and over R6 billion if one considers all indirect expenses and budgetary allocations.  In ten years the IDZs only attracted investments to the value of R11.8 billion, which, at the most optimistic average rate of taxable retained earnings of 10%, would mean that taxpayers will never get a meaningful return on their investment.

Employment figures were also disappointing with most employment generated in building infrastructures rather than in the businesses such infrastructures were supposed to attract, for the figure of 33.000 jobs includes a majority of construction and temporary jobs.  There is consensus that the IDZs did not work as intended.

However, with a leap of politician’s logic, Minister Davies reassures us that the same concept, re-packaged under the new name as SEZs, will work just fine in remote rural areas, and is asking Parliament to give him a blank cheque to make it so.  He wants the statutory power to create SEZs where he wishes and establish in such enclaves unique regulatory and fiscal rules.  He also wants the power to give businesses located there as many subsidies and facilitations as he deems necessary, including grants, loans, tax breaks, discounted electricity and free infrastructural costs.
 
When asked why Parliament could not approve an entire package of subsidies given to an SEZ on a case-by-case basis rather than giving a blank cheque to the Minister for all, the Minister’s advisors answered that this would take too long and that each case is too different to be dealt with legislatively rather than administratively.  Therefore, taxpayers will have no say over what will be given to the new beneficiaries of the extension of the welfare state to industrialists.

The additional problem, of a constitutional nature, is what prevented the establishment of similar schemes in countries with constitutions like ours.  It violates the equality clause in our Constitution that those manufacturing within an SEZ would pay less taxes and would need to abide by a different set of rules than those doing exactly the same thing across the line of that SEZ.

More fundamentally, we are dealing with the problem without fixing it.  The need for IDZs and SEZs arises out of the realization that our fiscal and regulatory environment is not conducive to doing business and is not internationally competitive, ranging from the lack of flexibility in the labour market to inadequate government services, taxes and manufacturing requirements.  Plus, our logistics, railways and harbors are obsolete, anticompetitive and too expensive.  This is the problem that needs fixing in the whole of South Africa.  We have an overburdened and overburdening welfare State wrapped both into incontrollable corruption and the self-delusion of one day growing into a “developmental state”.  Instead of fixing this, the politician’s idea is to create enclaves where lucky manufacturers would get out of these burdens, while the others elsewhere, including the SMMEs government wants to assist, will need to put up with the situation as it is.

To overcome these objections, Minister Davies’s last argument is that SEZs are a must-do and must-have because the countries we are competing with have them.  Ideologically, neither I nor the IFP can object to the abstract notion of SEZs.  In the 80s Buthelezi pioneered them in KwaZulu where they still exist and work well.  In the Constitution of KwaZulu Natal adopted by the KwaZulu Government in December 1992, we made provision for both Durban and Richard’s Bay to be given the special status of free ports exempted from the application of the fiscal and regulatory rules of the country.

We realized that to bring about the intended result, one needs to have a constitutional dispensation which takes the area concerned out of the general constitutional jurisdiction of South Africa, albeit for a limited purpose.  This remains the proper and successful way of doing it, as half measures will not work.

This is how Hong Kong now performs for the whole of China and various principates did in Europe in the past.  Southern Africa needs its own Hong Kong, Macau, Lichtenstein, Isle of Man or Monaco, both as special manufacturing zones as well as financial and free research and development enclaves.  However, this requires courage, constitutional amendments and vision.
Some of the IDZs could be provided with such extraordinary constitutional autonomy or quasi-independence.  Richard’s Bay could be our truly free port taken out of the Transnet complex.  As some would want it, in the Western Cape a semi-independent state could be established in the Republic of Hout Bay comprising Hout Bay, Llandudno, Camps Bay, Noordhoek, Kommetjie, Tokai, Constantia and Bishopscourt, providing an enclave of alternative free thinking and a non-welfare-based but free market way of doing business, which could become to South Africa the engine of development that Singapore is to Malaysia.   Other areas with no existing infrastructures of national importance could also be considered for such a courageous experiment.   For instance, small Paraguay has eleven true free trade zones.

Given freedom, even such a suburban area will soon see mushrooming skyscrapers the way undeveloped Singapore did when it broke away from Malaysia.  Nonsense?  Not Quite.  The Dubai International Financial Centre, which was set up out of the desert as a center of excellence to benefit an entire subcontinent, is a free zone which, inter alia, offers zero percent tax rate on income and profits, no restrictions on income repatriation, no exchange controls resulting, total investment flexibility and has its own separate laws governing financial services and commercial transactions, enforced by its own separated and independent judicial system.  If we are serious, this is what we should match.
 
Forty years of Nationalist government and eighteen of ANC government have pursued economically identical industrial policies, albeit for different beneficiaries. South Africa is now married to an economically self-defeating welfare plan for internationally uncompetitive industrialists. Industrialists-government welfare compact is based on subsidies, protected or tolerated cartels and monopolies, tariff barriers, preferential tenders with resulting higher pricing, and government-back conditions for consumer higher pricing and forced transfers from consumers, all of which compounds the unsustainable cost of keeping millions of poor on social grants and transfers. There is little space for desperately needed “let us do and let our goods go through”.  
The best we can do is to create redeeming enclaves of economic sanity which instead of receiving more subsidies, as planned for the SEZs, receive the freedom of free trade or semi-independent zones.   In these enclaves, free market, not size, matters; for Monaco is only 2 km2, Macau 22 km2, Lichtenstein 160 km2, Andorra 468 km2, Isle of Man 572 km2, Singapore 697 km2 and Hong Kong 1,140 km2.

In the absence of courage, we will just end up throwing more money at problems to enable politicians to be seen as dealing with them, while in fact accumulating economic losses.

Mario GR Oriani Ambrosini, MP
IFP Spokesman on Trade and Industry