Imagine waking up to news that the South African government has imposed a 300% dumping duty on the US dollar because Americans are buying too much South African products and thus dumping their currency in this country.
I imagine that most people would be outraged at such a ludicrous policy, the only effect of which would be to stop South African companies from selling to their American counterparts.
Yet, we tolerate this type of thing when it comes to non-currency goods and services. As I have written before, money is a product like anything else: It is used to facilitate the exchange of goods and services between people without the need to possess the goods and services that the other party to any trade wants.
The roots of this inconsistency seem to arise from nationalism coupled with bad economics. As others have written, even unilateral free trade is good for the country that has politicians wise enough to adopt it, but we in South Africa are not that lucky, and we continue to believe in the dogma of exports good, imports bad.
This is particularly tragic when you consider the scale of the problem of poverty in South Africa as well as the African continent more broadly. Our government once spoke of igniting an African renaissance and getting rid of poverty here at home and throughout the continent, but our actions have not been as lofty as our words.
This can be seen also in the fact that we still require visas from almost all non-SADC African countries if their citizens want to come to South Africa. This is ironic, considering our own government’s protestations when the UK government introduced visas for South Africans. We need frictionless travel and trade within Africa if all of us are going to lift ourselves out of poverty. Nationalism is a loser for Africa.
Imports are as essential to wealth creation as exports are. Immigration can be seen as a special case of imports where businesses bring in the labour that it requires to build more wealth and entrepreneurs move from unfriendly countries to ones that do not impede their wealth creation. If we had real free trade on the continent, companies would have more incentives to build the infrastructure to facilitate this trade and African taxpayers might get some reprieve from the corrupt parasites we call politicians.
This highlights something important: Market participants within a country go to the extra trouble of bringing in goods, services, and people from other countries because there are no better alternatives within the borders of their own country. To the extent that this is restricted, it means that people within the country have to incur unnecessary costs as they produce goods and services so less wealth is created than would otherwise have been the case. We also know that maximising wealth creation also maximises job creation as well as all social indicators like education and healthcare.
Therefore, a policy of prioritising exports over imports is an anti-poor and ultimately anti-human policy. Poor people need not only cheap imports so they can have a little bit extra in their pockets, they also need companies to be able to import skills, machinery and other capital goods so that wealth is created and the ladders of opportunity are built.
South Africa’s nationalistic approach to trade and immigration impoverishes not just South Africans but the rest of the continent as well, meaning our rhetoric about an African renaissance is being sabotaged by the same people who claim to be it’s champions.