Chairperson, the hon Minister posed a question to our committee last week, and today that economic growth and investment in some other countries is not even close to the financial management, media freedom or the human rights culture that we have, yet they attract far more investment, resulting in economic growth higher than that of South Africa. Why?
I think it's unfair, but there are reasons for it. Professor Seville of the Gordon Institute of Business Science - those who were there will remember - said that he is of the opinion that sentiment gets in the way big time when investors look towards South Africa.
Our first monitoring policies are world class, yet Wikipedia describes the country as the protest capital of the world. I said this this morning in the Water Affairs debate. That is the perception.
Statistics show that service delivery protests occur literally every second day, since 2008, which involves more than 2 million South Africans annually. Statistics from the commodities and currency markets tell the story, and they are concerning. The behaviour of civil society and the trade unions are tramping the sentiment that our fiscal and monetary policies are world class. Investors are worried for the wrong reasons.
The magazine Leadership reports that we have seen 3 000 protests in the past four years driven by poor service delivery. There is no value for our rand. Research shows that 80% of these protests have become violent. During the first eight months of 2012, we saw 226 incidents. Factors that were beyond the control of the Treasury are now shaping the perception of what the investors are thinking about South Africa.
Whether we like it or not, what credit rating agencies think about us unfortunately remains important. We are under review, as we are having this debate. We are two notches away from junk bond status. It's not the position we want to be in. I am making this point to make us realise that we are in this country and this boat together, all of us - the unions, the strikers, the government, the Guptas, the President, the media, the opposition and AfriForum. On the front page this morning, AfriForum attempted on a BBC Website to say that whites do not have a future in this country. What utter nonsense! What utter nonsense! [Applause.]
It is unpatriotic behaviour, but you see, we are all shaping this perception which investors have of us, and we start to think about ourselves in a similar fashion. If we do not realise that then we will be up for grabs for the wrong reasons. What should we do? I am again referring to Professor Seville. We have had our haircuts, Minister, and I think you gave us two. Now, we need a six-pack. [Laughter.] Last year, we needed a six-pack.
South Africa is growing faster than the rich countries, but slower than the poorer countries. We urgently need new partners. The Gordon Institute has conducted a study amongst 100 countries, researching 100 years of data, and they came up with the ingredients for what a country must do to develop a six-pack.
The six-packs includes the following: All your citizens must have access to education, not necessarily world class, but it must be functional and it must improve year-on-year. Health care must be universal and accessible and good basic primary health care is vital, but it must improve every year. You can judge whether it is improving or not, but I am not judging today. Population growth must be under control, not too fast, but definitely not negative - you can judge where we are. Further, savings and investment are vital for a good six-pack. On the savings side, we must remember that only households, companies and the government can save. Households are buried in debt. The state, unfortunately, had hiccups and has not set an example. This leaves only companies, and if you alienate your companies you alienate your savings.
Chile, with 17 million citizens, has 700 000 companies. South Africa, with 50 million people, has only 600 000 companies. Ninety percent of all new jobs between 1985 and 2005 came from small companies. We need more companies and less red tape in this country, then we will see investments coming.
The other ingredient for our six-pack is openness and mobility. South Africans and the residents of our trading partners must be able to move freely and have the freedom to do business wherever they want. If your mobility improves, your income improves. If your mobility increases by 5%, your income increases by 40%.
The last ingredients are policies and institutions. According to Professor Seville, it's not always the content of the policy that matters; but it is stability and the application thereof. Political stability and effective institutions are important. You break a promise if you speak with a forked tongue and you do not implement your policies - you default on these important ingredients of the six-pack. The study shows that those countries that work on the six-pack are getting better and bigger by the day. It is interesting to know that only 12 countries representing 3 billion people are in this first division of six- pack study. Nigeria is the only one in Africa. Where is South Africa? We are in division 2, the only one of the SADC countries in that division. No chance that we would have been there 15 years ago. So, we have made advances because of a golden opportunity. Unfortunately, as we stand, we do not have enough six-pack to grow beyond the 4,5%. Whether we like it or not, it is a fact in the present economic situation.
Finally, we can, but we are not going to. Unfortunately, we are seventh out of the ten fastest growing economies. Seven of those ten economies of the world are in Africa. What an opportunity! Let us join this African gym and start to concentrate on those issues which sway the sentiments and the negative perceptions about this country. We are all in this together and we must make sure that we don't drop this country for the wrong reasons. [Applause.]