With so many challenges facing SA as we attempt to transform the economy, we have to take care of the smaller things along with the big structural reforms being implemented. We want SA not only to grow economically and create jobs, but to be internationally competitive — the two go hand in hand.
The Fraser report, which measures economic freedom in 165 countries, provides a useful checklist that highlights where we’re coming up short. Released last week, the report measures the “year of Covid”, and it’s no surprise that our ranking dived to 99th from 93rd in 2019.
According to Business Day’s report, 146 of the 165 countries surveyed recorded an unprecedented drop in freedom as most governments imposed restrictions on commercial and other activities — but few were as draconian as SA’s. The economic destruction could have been less severe (“Report details loss of SA’s economic freedom, drop in rankings due to Covid-19”, September 8).
Particularly concerning, though, is that we’ve been in free fall since 2000, when we were ranked 47th. This shows that structurally, the ability of individuals to make their own economic decisions is being continually eroded. That’s an alarming fact.
The categories measured certainly don’t come close to providing a comprehensive list of the challenges facing the country, but they do show that we’re on the right track in some areas, even though other important areas are being neglected. They are the size of government, where SA ranked 117th; the legal system and protection of property rights, where SA ranked 56th; access to sound money (101st); freedom to trade internationally (123rd); and regulation of credit, labour and business 104th.
While all these areas need attention, what immediately jumps out are our poor rankings in freedom to trade internationally and size of government. These are two issues that are barely on the radar of the reform agenda.