LETTER: Debt-for-nature swops are win-win for SA and partners

Debt-for-nature swops, whereby rich foreign creditors reduce interest rates provided the debtor invests the benefit in nature conservation, have seized the attention of those concerned with protecting planet Earth. Such conservation interventions will also reduce our carbon footprint.

SA could gain from an analogous concept: grants for growth. We are classically short of government revenue for investment in infrastructure. Government investment in the economy is below 10% of GDP. Our rail, port and energy infrastructure is in a parlous state. But R1-trillion of the national budget goes towards social grants and state salaries.

If we start to divert this funding to investment we face social chaos and anarchy. If we don't drastically raise investment we stagnate and merely defer chaos and anarchy. Yet we have so much potential as a nation. Is there a way to square the circle?

Yes. We should think out of the box (and beyond our taboos) and recognise that wealthy nations have a stake in SAs progress as we are a crucial component of the wider African continent. Quite apart from humanitarian considerations, a stagnating Africa (yet with rapidly growing populations) will inevitably induce ever- increasing  waves of migration to Europe.

We should recognise that the West is relatively overcapitalised,  certainly in relation to SA. From a global viewpoint there will be enormous efficiency gains from infrastructure investment here in Southern Africa. But we have a chicken and egg situation. We cannot afford what needs to be done, so watch helplessly while future potential growth is sacrificed.

It would benefit both ourselves and the EU — and indirectly the US — if these capital-exporting regions were to fund part of our present infrastructure needs, in exchange for a future share of our additional tax revenue. Yes, this is relinquishing an element of our sovereignty. But it otherwise costs us nothing.

We’ll never have the incremental tax revenue if we don’t incrementally invest. So we’ll be giving nothing away. In fact, it’s a win-win position for both ourselves and our Western partners.

Let’s put our anti-Western ideology aside and contemplate exploiting a rare opportunity to advance both ourselves and the developed world. If our politicians can see and accept the benefits we should be able to sell this concept to our trading partners.

Willem Cronje, Cape Town

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