South Africas acceptance in the BRIC (Brazil, Russia, India and China, now called BRICS) group as a fellow member is already having a good effect on the countrys international image, says Tony Clarke, Managing Director of Rawson Properties.
'From the comments I have picked up from overseas colleagues, it is clear that joining BRIC has attracted attention and could raise the level of foreign investment in South Africa - from which, we are confident, the property industry will also benefit'
The fact that South Africa has been accepted by other BRIC members on equal terms, said Clarke, has drawn attention to its dominant role in Africa, its ability to act as a gateway to other African economies and its position as a spokesman for investment and business in the African continent.
'It matters very little that our economy is so much smaller than that of the other BRIC members (e.g. one-quarter of the size of Russias). What is important is that we are now recognised as competent members of the emerging economies group, which, right now, are giving far better returns to their investors than many of the established businesses in the First World and are therefore attracting investment at a very healthy rate. To be recognised as such a country is very beneficial indeed'
Clarke added that the governments much publicised renewed focus, as outlined in the recent budget, on job creation and housing delivery has also attracted some favourable comment internationally.
With a projected growth of over 8% (Clarke was quoting a recent SAGE group report), the South African economy, said Clarke, will benefit from the revival of many development projects. This, he said, is already becoming evident in the retail sector.
These bullish comments were, however, tempered by Clarke issuing a warning that, as he sees it, a semi-dysfunctional education system is at present not geared up to meet the needs of the South African economy going forward.
'It is generally recognised that the training given is inappropriate and the qualifications of the teachers giving it are inadequate. One has to note that in China 70% of urban teenagers emerging from school already have a skill that can be immediately applied in industry and business. By way of contrast, our township children are launched into the economy with semi-academic qualifications which, I regret to say, carry almost no value in the job market today'
Clarke was also critical of the governments '˜hazy growth strategies, which, he said, are not designed to inspire confidence.
'What the country needs,' he said, 'is a clearly stated long term plan that focuses on sustainable development rather than short-term gains. In my view this would involve making the labour market a great deal more flexible and limiting the power of the trade unions to raise wages as and when they please (in the process often pricing certain goods out of the market). Labour laws must be tailored in the best interests of the companies they serve, not those of the short-term gains of the employees'
Repeating what other Rawson directors have on many occasions said, Clarke affirmed that the provision of affordable housing is a cornerstone of future economic growth and political stability.
'Regrettably,' he said, 'there is still a no mans land between basic wholly subsidised housing and the inexpensive GAP housing which is so desperately needed and for which people are prepared to pay but for which they cannot raise the finance.
'The banks are for good historic reasons reluctant to finance a low cost home on which the profit is low and on which the risk is high. However, now that transfer tax is not paid on homes up to R600 000 and the tax on other homes and companies has been reduced, the situation could be further improved if reasonably small state subsidies on low value bonds were paid directly to the banks by the government, as is done in certain European countries'
Among those capitalising on the increased confidence in the country, said Clarke, is the Rawson group which recorded a 70% growth last year and which is now aiming for a further 50% growth this year.
For further information contact Tony Clarke on 021 658 7100 or email tony@rawsonproperties.com.
