US firms start getting the SA jitters
US COMPANIES are increasingly wary of investing in SA. They fear increased government interference in the economy.
Jim Myers, president of the American Chamber of Commerce (Amcham), said this week: "Collective signals we are getting from this government indicate that investment in SA could become too risky to make it an attractive proposition."
His comments come after Deputy President Thabo Mbeki and his US counterpart, Al Gore, recommitted themselves in Washington this week to furthering trade and investment.
Commentators noted that the Washington talks were dominated by US business concern at recent economic developments in SA and issues like SA's contravention of international drug patents accords.
Amcham's comments reflect increasing US business concern about investment in SA. "The signals are that the SA government is leaning away from business, a view not conducive to US companies making infrastructure investment," said Myers.
Amcham was concerned by new "more interventionist" laws that gave ministers "significant powers". But he stressed that US business remained confident in the overall economic policy.
"The government's commitment to Gear is a very positive factor, they have handled the recent currency crises well and we are confident that Mbeki will push the economic agenda more forcefully once he takes over."
Myers is also concerned at the rigidity of new labour law. "Government's approach is definitely pro-labour," he said.
US businesses accepted that their SA investments came with social strings, and made social contributions of $500-million a year. "But now issues are arising that collectively create serious investment obstacles."
US business sources feel there are misconceptions in SA government about how US companies make investment policy.
One executive said: "SA officials believe that by talking to their US counterparts they can get investment. US companies do not rely on their government for direction."
The increasing rift between US business and the SA government was also apparent in Washington when Erwin said SA did not need trade preferences offered by the US African Growth and Opportunity Bill, which scraps most tariffs on exports from eligible African nations. Washington backers had hoped for SA support for the bill. US unions and the textile industry oppose the bill. - netAssets..