However, speaking at the Western Cape Property Development Forum in Cape Town on Friday, Investec Wealth’s chief investment strategist, Prof Brian Kantor, argued that there is a precondition to any meaningful transformation of the economy – growth.
“Economic growth is transformational,” Kantor said. “Adam Smith called it the invisible hand: you do something for yourself, and if you succeed you are actually promoting a social interest.”
For growth to take place, however, the business environment has to be conducive.
“The recipe for economic growth is freedom for people to get on with their economic decisions and for their successes to be protected rather than expropriated,” said Kantor. “Protect property rights. Encourage development. Encourage risk taking.”
Kantor added that attempts to force transformation can only have the opposite effect.
“When you mess with the economy and mess with business you only make growth all the more difficult to achieve,” he said. “What works in South Africa is business. And business needs more encouragement, more incentive.”
He said that the success of this approach has been shown around the world over the last few decades.
“The past 20 to 30 years globally have seen the most remarkable poverty reduction programme ever experienced by following that recipe,” said Kantor. “But when you mess with the recipe you don’t get growth.”
