Post by cjm on Oct 21, 2016 5:31:23 GMT
Capital flight, plunging Rand = More SA owned assets abroad than flowing in
A small terribly important statistic is revealed in the Bloomberg article below. For the first time ever, the value of South African-owned assets outside of the country exceeded the annual inflow of funds into it. This kind of statistic sets the alarm bells ringing. As a developing country with massive challenges, South Africa needs all the capital it can get. But when the data proves its own citizens prefer to send their money out of the country rather than invest locally, and foreigners prefer other geographies, we have entered a vicious downward spiral. Something is seriously wrong. Serious reflection is required. Rhetoric and a succession of economic own goals by Soviet-style leadership are having a destructive impact far beyond what is appreciated by the political leadership. Capital is cowardly. It only flows where it is safe and has the potential to grow. Neither of which, right now, is on South Africa’s economic agenda. – Alec Hogg
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University chaos sparks wave of middle class capital flight
South Africa’s student unrest is causing a fresh wave of capital flight. My contacts in the city of London say since universities started burning, there has been a surge in requests from South Africans to move money offshore.
But this time the middle class is panicking. Nothing frightens a parent more than the thought of not being able to offer their children a better chance than they had. For many, that’s the entire purpose of their existence.
Problem is, for foreign students, a year at a modestly ranked Western university costs upwards of R600 000. In after-tax money. And, worse, those who study abroad have a nasty habit of actually staying on in their new geographies.
So as university exams get cancelled in the name of decolonising education, an unintended consequence is the export of another chunk of SA’s future tax base. Talk about shooting off your own foot.
A small terribly important statistic is revealed in the Bloomberg article below. For the first time ever, the value of South African-owned assets outside of the country exceeded the annual inflow of funds into it. This kind of statistic sets the alarm bells ringing. As a developing country with massive challenges, South Africa needs all the capital it can get. But when the data proves its own citizens prefer to send their money out of the country rather than invest locally, and foreigners prefer other geographies, we have entered a vicious downward spiral. Something is seriously wrong. Serious reflection is required. Rhetoric and a succession of economic own goals by Soviet-style leadership are having a destructive impact far beyond what is appreciated by the political leadership. Capital is cowardly. It only flows where it is safe and has the potential to grow. Neither of which, right now, is on South Africa’s economic agenda. – Alec Hogg
...
University chaos sparks wave of middle class capital flight
South Africa’s student unrest is causing a fresh wave of capital flight. My contacts in the city of London say since universities started burning, there has been a surge in requests from South Africans to move money offshore.
But this time the middle class is panicking. Nothing frightens a parent more than the thought of not being able to offer their children a better chance than they had. For many, that’s the entire purpose of their existence.
Problem is, for foreign students, a year at a modestly ranked Western university costs upwards of R600 000. In after-tax money. And, worse, those who study abroad have a nasty habit of actually staying on in their new geographies.
So as university exams get cancelled in the name of decolonising education, an unintended consequence is the export of another chunk of SA’s future tax base. Talk about shooting off your own foot.