Many things start out fun: sugar, shopping and binge drinking, for instance. The next day you wake up broke, unsatisfied and a kilo heavier. SA’s addiction to global financial markets falls into this category. We have attracted huge amounts of short-term holdings in stocks and bonds (portfolio inflows), but at the cost of depressing foreign direct investment, while aggravating inequality. World Bank figures show how much of an outlier SA is when it comes to global financial markets. They provide information on capital inflows for 32 upper middle-income economies. Of these, in 2015, SA ranked fourth in terms of the dollar value of portfolio investments, but 31st for foreign direct investment. In the decade to 2015, portfolio investment into SA equalled 2.7% of GDP, while direct investment came to just 0.8%. That reversed the ratio for the other 31 countries in the sample. Excluding China, portfolio investments for these countries came to 0.7% of GDP, while foreign direct investment w...

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