‘SA could become developed country’

2010-10-08 14:58

Moving from its status of a developing country to a developed one is an attainable goal for South Africa, CEO of Business Leadership SA Michael Spicer said.

Spicer was addressing the second day of the Black Management Forum’s summit in Johannesburg.

“South Korea did just this in 30 years and it is an attainable goal for South Africa if it lifts its growth,” Spicer said.

SA was “a typically 3.5% per year growth economy” with unemployment of around 35%.

It could acquire the status of a developed economy if its growth rose to 7% and if unemployment decreased to 10%, Spicer said.

A developed country was seen as one that was able to employ the majority of its people and one that offered good education, good health facilities and a high standard of living.

“But to become a developed country, behaviour would have to change,” Spicer said.

“We are living beyond our means and we could end up like Greece if we carry on.”

Spicer said SA was a country that saved little.

“Savings make up 14% of GDP here but if you want to be a developed country around 25% of GDP should be savings.”

Spicer said South Africa relied on foreign investors for capital investment and without them, it would not have sufficient tax revenues.

“It must be remembered that we are a large welfare state with 16 million currently receiving benefits and this will rise to 20 million soon ... in fact, one person supports benefits for three persons and this is not sustainable.”

Despite the efforts of the SA Revenue Service, SA had a narrow tax base. Spicer said things would need to be done differently in the future.

“Unions can’t continue to play the games they are playing – they exclude the youth.

“And large companies must make sacrifices beyond Black Economic Empowerment (BEE) and think about issues of executive remuneration.”

Spicer said government had to do things differently too.

“State owned enterprises are in a mess – in over two years a CEO for Transnet hasn’t been found and this parastatal is a bedrock of the economy,” he said.

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