Phumlani M. Majozi |
Phumlani M. Majozi writes on report released by FMF and Fraser Institute of Canada
Without robust and rapid economic growth, prospects for employment and living standards will remain bleak in South Africa. Any sane person understands and should understand this. It’s not rocket science and is widely recognized by business and political gurus.
However, what these gurus tend to misunderstand is that without economic freedom, rapid economic growth and prosperity will be difficult to achieve in the country.
With the start of World Economic Freedom 2021 (EFW) by the Free Market Foundation (FMF) and the Fraser Institute of Canada earlier this week we were reminded of the importance of economic freedom in our society
By economic freedom, the Fraser Institute and FMF mean minimal government intervention in the economy. The parameters that the Fraser Institute and the FMF use to measure economic freedom in 165 countries are: size of government, legal structure and property rights, access to sound currency, freedom to trade in international regulation of credit, labor and business.
In this year’s EFW ranking, Hong Kong is once again in the lead. Hong Kong is a land that lovers of economic freedom around the world cherish. Professor Milton Friedman, the Nobel economist who died in 2006, loved Hong Kong. He even featured it in his Public Service Broadcasting Services (PBS) Television Program Free to choose, in 1980.
Hong Kong is still a bastion of economic freedom today. Although, as the Fraser Institute notes, “China’s heavy hand will likely lower Hong Kong’s ranking in the years to come.”
South Africa is not in a desirable position in the EFW rankings. This year, the country ranked better than five years ago, at 84e; and his score of 6.97 out of 10 was an improvement over half a decade ago. However, it is very important to point out that South Africa’s ranking twenty years ago was better than it is today and five years ago. So overall over the last twenty years we have gone down in the EFW rankings.
What is important to stress, as I mentioned in my speech at the launch, is that South Africa’s economic performance was better twenty years ago – better in terms of economic growth and unemployment rate. Yes, we were still at double digits in unemployment, but it was not the higher and shocking double digits we have today.
Looking at the EFW, one thing is very clear; it is because Western countries are the freest. Therefore, we all need to understand why desperate people from impoverished conflict-ridden countries risk their lives trying to enter Western countries. This phenomenon makes sense.
Most analysts tend to view EFW solely from an economic perspective. I believe this is a publication that should be viewed from the perspective of individual freedom. We are a company of individuals pursuing their separate interests. Individual freedom is something we must strive for as South African citizens.
A poor South African should have the right to decide whether to take on any job he wants. The employer or potential employer should also pay a salary that they think the employee is worth. Based on this principle, the employer and employee can then conclude a wage agreement without government interference. The government’s role in the process is to enforce this agreement.
At the launch, a participant asked what private citizens can do to move the country in the right direction that will improve its ranking in the EFW. The answer to this question is not sophisticated.
Ordinary citizens, as voters, should vote for people who believe in the limited role of government in the economy. When you look at South Africa’s political landscape, it’s clear which parties are far left, center-left, and center-right. The least we need in South Africa is center-right governance – and citizens should vote for it.
Support organizations like the Free Market Foundation and Solidarity can also help. Solidarity has built a world-class science and technology college called Sol-Tech in Pretoria. I visited Sol-Tech months ago and was very impressed. It is a college entirely built by private members of Solidarity.
The basics of how to build a prosperous society should not only be understood by bureaucrats and technocrats. Private citizens also need knowledge and understanding.
If I were the ruler of South Africa, I would dedicate, among other things, my work to educating my people. I would not pursue the redistribution of wealth. I would like to educate and improve the skills of my people so that they create their own wealth. Competition in business, education and other sectors that support South Africa’s economic productivity would characterize the nation I would rule.
We have a steep mountain to climb if we are to improve our EFW ranking and improve people’s lives. The work begins now!
Phumlani M. Majozi is a senior fellow at African Liberty. Its website is phumlanimajozi.com. Follow him on Twitter: @PhumlaniMMajozi