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Mike Schussler, economist at economists.co.za.

Wal-Mart is being made to work hard for its direct investment into SA. Our unions are dead against Wal-Mart buying a local mass market retailer and now labour has been joined by government in trying to keep the retail giant out of SA.

Wal-Mart is apparently a bad employer. It also bashes unions, hurts local suppliers and certainly hurts mom-and-pop stores.

But the question to ask is: are our labour laws so weak that they do not protect workers?

That is in effect what government and the unions - or at least their legal representatives - have been stating.

If government cannot implement our labour laws, they should not expect Wal-Mart to do so.

Some economist - using an input-output table - says that for every 1% more of imports in the post-merger period, Wal-Mart stores will cost SA 4,000 jobs.

Nobody disputes that a 7% to 13% long-term cost-saving is available to consumers once Wal-Mart enters a market.

By the same input-output table, that would then mean if customers spent that "saved" money elsewhere in the economy, somewhere between 28,000 and 52,000 jobs would be created and everybody would be richer.

Is government against the population being better off as is the case in Brazil, Mexico etc? Or is government so pro-poor that they want everybody to be poorer? Why is government so scared of coming out in the consumer corner?

SA has more consumers than workers by far. In fact we have about 13 million working adults and 18 million people with credit records.

We have probably got in excess of 32 million primary consumers, who would save money by the entry of the world's biggest discounter.

Happy consumers may even be happy voters. For the first time it makes sense for a ruling party to side with consumers.

They could even say "we saved you money", but no, all we see is threats.

From Shoprite's argument it would seem that other retailers are worried about Wal-Mart's potential entry into the South African market - which from a consumer viewpoint would be a good thing.

But here is another strange element to this strange case. Why use the Competition Tribunal to potentially keep competition away?

This really does not make sense and many small businesses have personally said or indicated that they wonder if the government wants business.

From an employment point of view - why stop the world's biggest business employer from entering the country?

Today Wal-Mart employs well over 2.1 million people - about 40% more people than six years ago.

Why would one of the world's lowest employment countries, with less than 41% of adults in jobs, try to keep such a creator of employment out of SA or allow the retail giant to enter only with massive restrictions?

Brazil, with its labour government, tolerates Wal-Mart and, in Chile, a left-wing government was in charge when Wal-Mart appeared.

Is SA so left-wing that it would shoot Karl Marx if he ever came around?

For the ministers and their departments involved, I really hope Wal-Mart does not pull out of the deal. The impression that this would give to big businesses would be awful.

In Brazil, Wal-Mart is to employ 7,000 more people in the next year - an increase of about 8%.

Imagine if Wal-Mart could give us that type of increase in SA.

Is this country only interested in communist heavy industry employment or are its ministers living in an era 1,000 AD?

Here is a case where a retailer can grow a company faster and use SA as a springboard into Africa.

No government subsidies and no extra tariffs are required.

Yet SA pays more than 205,000 rand for every job in the motor industry, about 143% more than the actual pay that workers receive. Does government only encourage jobs that we pay for?

The cost of incentives in the SA economy, according to the Budget, was 27 billion rand. Wal-Mart will save South African consumers 2.2 billion rand.

Why does SA want to rip consumers off with higher prices?

I also wonder what would happen to our companies going into Africa - such as Shoprite and Pick n Pay - if their governments were to say: "No, you only destroy jobs."

We would not be able to be part of the Brics grouping of emerging-market economies anymore as the main reason we are there - by all accounts - is because SA is the gateway to one billion Africans.

More than 50% of the companies on the JSE have operations in Africa and a heavy blow would be dealt to the stock market and our pensions if these operations came to an end.

So the question arises: does our government not want to trade and do business in Africa?

And do not forget China! They must be getting mixed messages from us if they read the tribunal's transcripts.

Why does government want to risk harming its relationship with the world's biggest economic engine? Will China now buy more iron ore from Australia and coal from the Philippines? Will India or any other country still regard SA as a friend if we treat foreigners like this?

At the tribunal hearings, I am of the impression that only accusations were flung in Wal-Mart's face.

Did you know that Wal-Mart grew its fixed investment by more than 30% for every one of the past four years? In a country with a lack of fixed investment, this would be a godsend. Why did this not even feature at the Competition Tribunal?

One has to ask the question: has SA thought this whole process through?

Have we thought about the actual laws that government, trade and investment have signed up to?

Has the Department of Trade and Industry thought about how this looks to investors, both local and foreign?

Has the Department of Economic Development got any idea of how to grow jobs without investment? Certainly, no investment is perfect, but a company that actually grows employment is what we need.

Forest Gump would have answered my questions in a very simple manner. He would have said: do not look a gift horse in the mouth.
 

Note: This is my opinion. I was not paid or asked by any party to write it. However, as an economist, I feel that we must have more balance out there.
 

*Schussler is a director at economists.co.za.