Is South Africa a Rouge Democracy?

President Thabo Mbeki apparently sent a four-page letter to President Bush criticizing him for getting involved in Zimbabwe and accusing him of taking sides against President Mbeki’s government and Zimbabwe according to Washington Post columnist Michael Gerson. He allegedly told Bush to “butt out, that Africa was his.” Gerson, in reaction, wrote that South Africa is increasingly becoming a rogue democracy, actively blocking United Nations discussions on human rights abuses in Zimbabwe, as well as other countries such as Belarus, Cuba, North Korea and Uzbekistan. South Africa was the only democracy to vote against a resolution over Myanmar. Gerson said, “South Africa remains an example of freedom – while devaluing and undermining freedom of others. It is a product of a conscience it does not display.” Any thoughts on whether South Africa is becoming a “rouge democracy?”

Doom and Gloom or A New Era of Growth for South Africa?

Yesterday, it was announced that South Africa’s GDP growth fell to about 2%, the lowest it’s been since 2001. Inflation, which has been steady at 2-4% for the past 5 years, is hovering above 10%. Amid fears of inflation, the South African Reserve Bank is considering raising interest rates by 200 basis points above its current rate of 15% (prime rate). With 25% unemployment, 50% of the population living under poverty and 22% HIV/AIDS prevalence rate, there is list of problems the South African economy faces. The recent spate of xenophobic attacks on foreign immigrants is adding to this list of problems. Refugee camps are springing up and creating a new class of disenfranchised South Africans.

Yet there is optimism for hope. South Africa is a well-endowed country due to extensive infrastructure and institutional development during its colonial and apartheid period. There are certain aspects of society here that place it on par with the rest of the industrialized world. It is in a position to be a gateway for channeling the vast natural resources from the African continent to the rest of the world. There is excitement surrounding the upcoming 2010 World Cup, although South Africans are concerned the construction projects will not be completed in time. In the end, if the government of South African can manage to promote trade routes with its neighboring countries and continue its track record of promoting business and growth in the country, there is potential for growth to continue.

Driving on the Left Side of the Road

I arrived in Cape Town International Airport on May 27, 2008, jetlagged and sleepy-eyed, and was informed by the British Airways attendants that my luggage had not arrived and was stuck in some terminal at Heathrow. Without any luggage but with my carryon backpack in tote, I headed to the car rental station where I haggled with the attendant about renting a car and wanting to deny insurance because my credit card and insurance in the U.S. covers damage or loss to the car. After an hour of trying to explain myself and numerous phone calls to who knows where, I gave in and told them to give me the insurance and off I drove to my new home.

In South Africa, driving on the left side of the road has been one of the biggest challenges I have faced so far. In contrast to many of my colleagues that are off to developing countries in places like Liberia and Southern Sudan, dealing with dirt roads, sporadic electricity and mosquitoes the size of oranges, I am adapting to 8 lane highways with cars that zip at 140km/hour, learning to use dishwashers and washer/dryers that have funny symbols on them, mistaking a South African beef jerky called “biltong” as dog food and learning that Afrikaans is a dialect of Dutch, not German (oops, no wonder people looked at me funny when I said, “Gutentag!”).

I sort of wish I was experiencing a truly developing country, being an international development graduate student with limited developing country experience. However, I am optimistic that working in South Africa will give me a good insight to doing business in Africa. Often South Africa is termed the “gateway to Africa,” due to its potential to be a catalyst for growth for the rest of the continent. If only certain minor issues such as, trade border restrictions, ethnic conflict, government corruption, xenophobia (the recent hot topic) and distrust of the West, can be overcome. There is a great sense of optimism in the country, especially with the upcoming 2010 World Cup. However, South Africa is still sore from the wounds of Apartheid and a society divided along racial and class lines. Society is complex here, which affects doing business here. In the end, I am looking forward to the experiences I will have gained from working here.