Today's Labour News

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newsWell-known economist Mike Schüssler writes that South Africa attracts far less fixed investment as a percentage of GDP than any other emerging market.  

According to data from the UN Conference on Trade and Development (Unctad) for 2017, SA was the third biggest exporter of capital as a percentage of GDP in the world.  Foreign direct investment (FDI) is an investment made by a firm or individual located in one country into business interests in another.  FDI is a vital part of overall fixed investment (investments into actual land, buildings, machines and inventory).  It is a long-term investment and a good indicator of confidence in a developing country.  SA is the lone emerging market economy in the world’s largest net exporters of FDI.  Of 157 countries analysed, only 22 are net exporters of fixed direct investment.  Only four are emerging markets.  The lack of foreign fixed investment translates into real job losses and impoverishes real people by the millions.  Using the average emerging market as a measure (average is taken as 12% of GDP as calculated), SA should have had R2.2 trillion in extra fixed investments by the end of 2017.  Measured as a percentage of SA’s total fixed investment stock of R11.2 trillion, this would imply about 20% more capital.  Schüssler reckons that, assuming that the capital and labour ratio stayed the same, this would have meant about 3.1 million more jobs.

  • Read Mike Schüssler’s report in full at Moneyweb

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