South Africa Should not Expect the World to Invest in Xenophobia

Two weeks ago, when former president Nelson Mandela was admitted into hospital, I was surprised to be invited to participate in an online poll on whether it would still be safe for White South Africans in a post-Madiba South Africa. We have all heard the theories, some reeking of paranoia  and others just far-fetched about a possible xenophobic and racial apocalypse after the passing of Mr. Mandela.

The hope has always been that, it is not in the soul of a nation like South Africa, after close to two decades of independence and a having gone through the long and painful process of reconciliation, to just turn around and go back to social chaos. There is a proverb that states, “as a dog goes back to its vomit- so a fool returns to his folly.”

One would hope that the nation has learnt enough, to be counted among those that are wise. And after two decades of precariously walking towards racially and culturally integrating South Africa’s diverse people, a decent into anarchy would obliterate confidence in South Africa’s economic prospects, not just globally, but also on a national level.

The upcoming visit by POTUS, Barack Obama, to South Africa- and bringing with him an entourage of business people, signals that South Africa is being taken seriously on a global business scale. With Africa as the next business frontier- South Africa is the “X” that marks the spot to begin a foray into the continent!

Its infrastructure is capable of facilitating networks of international business relationships, the business environment in the country is dynamic and inviting- or it? What signal will South Africa send to the United States of America and other potential global investors if it descends into xenophobic anarchy? No country should be an island from a business point of view.

Any kind of social instability coupled with violence, exacts a high toll on the general community and business community. Anarchy always demands a high price. We’ve seen it when peaceful protests turn violent and local businesses get vandalized, after that thin line between justified anger and uncontrollable vigilantism, is crossed.

Justifiable social frustration, especially on economically driven issues like unemployment, is a given and must be heeded to by the government, and yet is often escalated to fuel criminally nefarious actions. While breakouts of massive xenophobic attacks on a national scale are rare, the few pockets of disturbances that to reoccur from time to time- do little to improve confidence in future business prospects within the country.

Apart from the enormous amount of damage done to property during outbreaks of social violence, there is also the incorporation of tension into air. Businesses in areas affected by violence often see a drop in sales, because clientele drops, due to a reluctance to visit those locations, and apart from a loss of revenue, there often follows a great deal of expenditure to clean-up and restore facilities, after explosions of violence.

The air is permeated with trepidation and this creates a great deal of psychological pressure on employees, due to fear- fear for their jobs, fear for their safety and fear for the future of the business. Potential investors are reluctant to put funds into areas that display volatility of any kind, especially the sort that could lead to the destruction of assets and endangerment of employees.

The South African economy is recovering like the rest of the world, but with falling gold prices and a struggling Rand, the costs to the image of the country to international investors would be crippled by scenes of South African police on the streets battling to contain xenophobic propelled violence. At the heart of xenophobia is ultimately a resentment of foreign nationals and very few companies would be willing to put their nationals in any kind of dangerous situation.

South Africa’s story is just beginning, it had a powerful and inspiring prologue of a nation joining hands to fight for justice and equality and against oppression. It won the respect of world as a protagonist that beat the odds, to make a difference and the people of South Africa cannot afford to become the antagonist in the tale. The competitive dog-eat-dog nature of business on a global platform will not accommodate social and, more especially xenophobic or racial instability.

For South Africa  to continue to rise in prominence on the global business stage, it must clean up the house, because it will become a battle to invite foreign investment in. The growth of the economy will in a big way depend on employment levels in the country, but a balance must be struck, between protecting jobs and creating a warm environment for foreign investment to flow in.

The government must find a way to cool the heated racial tensions in the nation and if possible, re-educate people about the battles that were fought to get South Africa where it is and why it is important not to regress but to actively progress.