Download - BUSINESS SOUTH AFRICA PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE ON LABOUR 20 MAY 2002
BUSINESS SOUTH AFRICA PRESENTATION TO THE
PARLIAMENTARY PORTFOLIO COMMITTEE ON LABOUR
20 MAY 2002
CAPE TOWN
Proposed agenda for Portfolio Committee on Labour
Cas Coovadia: Introductory remarks
Ben van der Ross: Overview of BSA
Progress being made with the unity processes with the BBC
Cas Coovadia: Black economic empowerment
Roger Baxter: Breaking through the economic growth barrier in South Africa
Primary Functions of Business Organisations
1. Umbrella Body/ies
Represent the interests of business as a wholePromote / protect the macro interests of business in respect of national matters such as legislation, taxation, labour issues, etc.Represents business internationally.
2. Chamber Movement
Concentrates on local level service delivery and direct support to its members (corporates, to a large extent - smaller business).
Business South Africa(umbrella body)
Current Structure of Organised Business in South Africa
AHI SACOB
Agri SA Banking Council
etc. See slide 3 for full list
Multi-sectoral / Chamber Organisations
Sectoral Organisations
SAF Unique - largest60 companies only
Uni-sectoral Members of Business South Africa •Agri SA
•Banking Council
•Building Industries Federation of SA (BIFSA)
•Chamber of Mines of South Africa
•Chemical and Allied Industries’ Association (CAIA)
•Insurance Industries Employer Association (IIEA)
•Life Offices Association (LOA)
•National Association of Automobile Maufacturers of South Africa (NAAMSA)
•Printing Industries Federation of South Africa (PIFSA)
•Retailers’ Association
•Road Freight Employers Association (RFEA)
•South African Federation of Civil Engineering Contractors (SAFCEC)
•South African Insurance Association (SAIA)
•South African Petroleum Industry Association (SAPIA)
•Steel and Engineering Industries Federaiton of South Africa (SEIFSA)
•Sugar Maufacturing and Refining Employers’ Association (SMREA)
Black Business Council
(umbrella body)
NAFCOC FABCOS
ABASA ABSIPSee slide 5 for full list
Multi-sectoral / Chamber Organisations
Various professional and business organisations and associations
Black Business Council Members
•Association for the Advancement of Black Accountants of Southern Africa (ABASA)
•Association of Black Securities and Invesment Professionals (ABSIP)
•African Minerals and Energy Forum (AMEF)
•Black Information Technology Forum (BITF)
•Black Lawyers Association (BLA)
•Black Management Forum (BMF)
•Congress of Business and Economics (CBE)
•National Black Business Caucus (NBBC)
•South African Black Technical and Allied Careers Organisation (SABTACO)
•South African Institute of Black Property Practitioners (SAIBPP)
•South African Communications Forum (SACF)
•Black Business Executive Circle (BBEC)
The Business Unity Process
1. At overall level
Merger of BBC / BSA
Membership will accommodate at least all of the current members of BBC and BSA
The Business Unity Process
2. At chamber level
AHI
FABCOS
NAFCOC
SACOB
These organisations will develop an effective working arrangement to co-ordinate their operations and agree how they will relate to the merged BBC / BSA.
Growth and Development Summit
* Driven by the Department of Labour
* NEDLAC is implementing agency
* 4 agreed themes
• More Jobs, Better Jobs - Decent Work for All;
• Addressing the Investment Challenge;
• Advancing Equity, Developing Skills and Creating Economic Opportunities; and
• Local Action for Implementation and Development.
Format of SummitNot yet final but expect:
- keynote address by President;
- addresss by each constituency;
- signature of pre-negotiated agreements
The Agreements• Currently being negotiated by Task Teams
• Business representation on each Task Team - 3 from BBC / NAFCOC and 3 from BSA
• Focus is on identifying a limited number of specific, substantial, but “do-able” objectives.
• Too early to predict exact outcomes
However
1. Issues on which consensus is already emerging are:
• an expanded public works (or Public Employment) programme; and
• focus on the learnerships initiative.
2. Many other important and relevant issues are being identified.
3. Will have to agree processes to take these forward.
BLACK ECONOMIC EMPOWERMENT
Broad Principles
• Historical legacy
• Socio-political imperative
• Recognition of economic imperative
• Sound business principles – sustainability
• Government role in addressing non-commercial risk
• Specific areas
• Target group
• HDSA / Black
• Consistency
• Funding
• Capacity of financial sector
• Effective utilisation of government funds
• Funding – continued
• Donor and international funds
• Structure into PPP?
• Utilisation of mechanisms in Strategy Doc?
• Prioritisation
• Scorecard
• Support balanced scorecard
• BEE Advisory Council
• Business representation
• BBC / BSA Interim Leadership
• Access to financial services
• Dealt with in Financial Sector Charter
• Targeted investments
• Dealt with in Financial Sector Charter
• Employment Equity / Skills Development
• Mining and Petroleum Industry Charters
• Learnerships
• Intervention in school and university curricula
• SETA’s
• Ownership
• Direct / Indirect
• Broad-based
• Capacity of trustees / fund managers
• Government role
• Control
• Fulcrum of power
• Indirect ownership representation
• Executive management
CONCLUSION
• Business – partners with government
• Need for sustainability
• Sound business practice
• Funding
• Positive energy
SOUTH AFRICA AT A CRITICAL ECONOMIC THRESHOLD: KEY ISSUES TO
BREAKING THROUGH THE ECONOMIC GROWTH BARRIER?
PLACING SOUTH AFRICA SQUARELY ON THE GLOBAL INVESTMENT RADAR SCREEN
Brazil
China
ArgentinaHong Kong
Ireland
Mexico
Korea
Chile
Poland
Singapore
Thailand
Malaysia
South Africa?
South Africa, towards a shared vision
South Africa is a remarkable country. Arising from the ashes of its dark apartheid past, the country experienced a smooth and peaceful transition to democracy. A solid foundation for democracy and economic prosperity has been laid. The focus is now shifting towards realising the economic miracle.
A vision of a prosperous fast growing South Africa which provides sustainable employment opportunities and rising living standards to all its people is a shared vision that all South Africans can aspire to.
Significant achievements in the new democracy
Significant progress has been made in ensuring that South Africa’s young democracy is built on solid foundation.
Institutions that support democracy have been put in place.
Fiscal and monetary policy have achieved a much more stable macroeconomic framework.
Trade & exchange control liberalisation have opened up South Africa’s economy to global forces including access to new markets.
South Africa, at the corporate, government and civil socdiety levels, is playing a much more significant role in global debates (e.g. in multilateral discussions)
There is no doubt that these achievements have contributed to a more sustainable and higher economic growth platform for South Africa.
South Africa has a number of advantages and strengths
South Africa has a number of advantages, some absolute, which form part of the attractions of the country for domestic and foreign investment:
Abundant natural resources and natural attractions.
World class infrastructure.
A well-developed and efficient capital market.
A world class banking and financial services sector.
World class companies in a number of sectors.
The world’s cheapest industrial electricity price with reliable supply.
Abundant supply of labour.
A government which is willing to globalise the economy.
Cheap real estate costs.
WEF survey: the level of sophistication of financial markets is higher than international
norms (1=strongly disagree; 7=strongly agree)
0
12
34
56
7
Opportunities are opening up
•· As market barriers are reduced so new market opportunities for South African exporters are being realised (AGOA, EU-SA FTA, US-SACU FTA, etc.)
•· Access to global capital and foreign direct investment in the rapidly globalising world economy is resulting in new opportunities for investment, technology transfer and improved economic performance in South Africa.
•· NEPAD and increased regional integration will help stabilise the region and reposition Africa for the 21st century.
SETTING THE SCENE: WHERE IS SOUTH AFRICA AT?
SOUTH AFRICA’S ECONOMIC PERFORMANCE:
•Yes good progress has been made in stabilising the macro- economy, reducing inflation, reducing the budget deficit, stabilising the fiscal situation, relaxing exchange controls, liberalising international trade, introducing a new skills development paradigm and stabilising the labour market.
•But, South Africa’s investment and growth rates remain far too low to tackle high unemployment and to raise living standards.
SOUTH AFRICA STANDS AT A CRITICAL ECONOMIC THRESHOLD
The economic growth trajectory of the economy needs to be raised to a significantly higher level through a massive expansion in the
growth of economic opportunity and investment.
Failure to raise the growth trajectory from the current 2.5% per annum rate, given South Africa's 7.6 million unemployed people,
may undermine the country’s long-term future.
Organised business rejects the latter scenario as unacceptable. But we must understand the dangers of not raising the economic growth
trajectory.
Non-agricultural employment, 1993 and 2001 (1995=100)
0
20
40
60
80
100
120
Generalgovernment
Parastatals Mining Manufacturing Other privatesector
1995
=10
0 1993
2001
Comparison of the share of income for poor households and rich households
0
10
20
30
40
50
60
70
Brazil South Africa Malaysia Turkey Ireland Australia Poland Korea
Share ofincome ofpoorest20%Share ofincome ofrichest10%Gini index
South Africa, savings(GDS) and investment (GFCF) to GDP ratios and GDP growth rates for
the decades 1950 to present
0
5
10
15
20
25
30
1950's 1960's 1970's 1980's 1990-94 1995-2001
as a
% o
f G
DP
0
1
2
3
4
5
6
Source: SARB
% G
DP
gro
pw
th
rate
GDS/GDP GFCF/GDP Real GDP grow th
South Africa, Savings and Investment rates as a % of GDP
10
15
20
25
30
35
GD
S &
GF
CF
% o
f G
DP
GFCF/GDP
GDS/GDP
SOUTH AFRICA’S ECONOMIC PERFORMANCE RELATIVE TO
COMPETITORS:
•Low savings and investment rates.
•Little foreign direct investment.
•Relatively low economic growth rates.
•High unemployment.
Savings & investment rates as a % of GDP for the decade of the 1990's
0
5
10
15
2025
30
35
40
45
% o
f GD
P
0
1
2
3
4
5
6
7
8
% g
row
th ra
te
GDS/GDP% GFCF/GDP% GDP growth rate
FDI into key emerging & developed economies, 1998-2000
0
10000
20000
30000
US$ mns
1998 1999 2000
Unemployment as a % of labour force average 1990-99 and 2000 (source:WB)
0
5
10
15
20
25
30
35
SouthAfrica
Malaysia SouthKorea
Turkey Brazil NewZealand
Australia Ireland Poland
%
1991-1999 2000
Private Capital Flows to Emerging Market Economies, 2001
Europe13%
Latin America
34%
Asia/Pacific46%
Africa/Middle East7%
Real GDP per capita in 1985 US$ terms, 1993 and 1999
0
5000
10000
15000
20000
US
$ p
er
capita
(consta
nt 1985 $
)
1993
1999
SOUTH AFRICA NEEDS TO RAISE THE ECONOMIC GROWTH TRAJECTORY
TO A HIGHER LEVEL THROUGH:
•A massive expansion in the growth of economic opportunity and investment.
•A massive expansion in the skills base of the broad population to ensure all people participate in the growth of opportunity.
In general, for an economy at South Africa’s stage of development the key driver of economic
growth will be supply-side investment.
•That fuels an export boom.
•Raises employment and disposable incomes.
•That allows steady growth in the size of the domestic market.
•That encourages foreign participation in our economy (FDI and portfolio investment).
IS SOUTH AFRICAN BUSINESS ON AN INVESTMENT STRIKE?
Total fixed capital stock in South Africa, government vs private sector
General government
46%Private business
enterprises54%
Total net capital formation for South Africa by organisation 1991 to 2001, nominal terms
32888
-37779
206756
-100000
-50000
0
50000
100000
150000
200000
250000
Generalgovernment
Public corporations Private businessenterprises
R' m
illio
ns
Total net capital formation for South Africa by organisation, nominal terms
-10000
-5000
0
5000
10000
15000
20000
25000
30000
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
R' m
illio
ns
General government Public corporations Private business enterprises
What factors drive investment?•The availability of investment projects (which are currently closed in the telecom, energy, rail, port arenas!)
•The size of the domestic market and access to other markets.
•The availability of the factors of production (skills, capital) at world competitive prices.
•Ultimately investment decisions are driven by risk and cost adjusted rates of return criteria.
•If the costs and risks of investing in South Africa are too high – investment will not take place
INVESTMENT DECISIONS ARE DRIVEN BY THE RISK AND COST ADJUSTED RATE OF RETURN
RELATIONSHIP
=
COSTS:•Cost of capital
•Cost of labour
•Cost of technology
•Cost of intermediate products
•Costs of logistics
RISKS:•business & financial risks
•Property rights
•Legislative
•Political
•Security
•Labour market
•Marketing
The investment hurdle rate = rate of return required by an investor after covering the risks and costs of a project over the long-term.
RISK & COST ADJUSTED RETURNS
REVENUE
•Economic growth
•Market contestation
Suppliers
Employees
Lenders
Government
Reinvestment
INVESTORWhat is in it for the INVESTOR?
THE CASH RECEIPT QUEUE, WHAT ISIN IT FOR THE INVESTOR?
REVENUE FROM SALES
Minus
THE QUEUE
THE INVESTOR STANDS TO BENEFIT LAST IN THE QUEUE
The key point being made here is that there is a pipeline of costs (taxes, interest payment on debt, currency
depreciation, labour costs, logistical costs, etc.,) which are taken from a projects return before the investor (shareholder) see any return on money’s invested.
Any issue that affects the distribution of the benefits or costs from an investment will raise the risk premium, raise the cost of capital, raise investment hurdle rates
and lower investment
USACFROI: 10.5%CoC: 5.4%
South AfricaCFROI: 8.7%CoC: 8.6%
JapanCFROI: 1.4%CoC: 5.2%
5.1% pointpositivespread
0.1% pointneutralspread -3.8% point
negativespread
Rate ofreturn %
Cost of capital
EVALUATING INVESTMENT DESTINATIONS
Comments:
Excellent risk & costadjusted rate of returnwhich will encourageexpansion and further
investment
Neutral risk & costadjusted rate of return
which results in afocus on cost cutting
and minimalinvestment
Negative risk & costadjusted rate of return
which will result insevere restructuringand disinvestment
HOW DOES SOUTH AFRICA PERFORM ON THE COST/RISK SIDE OF THE INVESTMENT
EQUATION?
•The real cost of capital is too high (interest rates, tax rates, currency volatility).
•The cost of labour per unit of output is high (apartheid education, poor skills profile, poor management practices, etc.).
•The costs of logistics are too high (the lack of competition in service provision results in high prices which disadvantage exporters).
Effective company tax rates, 2001 (for an average manufacturing company)
0
5
10
15
20
25
Ireland S-Korea Poland Malaysia S-Africa
%
WEF: Survey of perceptions about incentives for investment (1=poor incentives, 10=max
incentives)
0
2
4
6
8
10
Ireland Malaysia Brazil Turkey SouthKorea
Poland SouthAfrica
Real cost and risk adjusted rates of return for 2000
02468
1012
Ireland Malaysia N-Zealand Australia S-Africa
% RACARR
Return on investment Cost of capital RACARR
The relative cost of labour is too high.
•Yes basic wage rates per hour in manufacturing are mid-range versus the comparators and the labour market is more stable (i.e. not confrontational).
•But the reality is that the relative cost of labour per unit of output produced is just too low.
•Such productivity levels are as a result of apartheid education, past introverted industrial policy which undermined skills development, poor management practices, some rigidity built into labour laws and inappropriate use of technology.
•Healthcare issues and declining human development index are concerns.
Manufacturing value added per $ of labour purchased, 1999 vs 1985
0
1
2
3
4
5
6
Ireland Korea Turkey Brazil Malaysia USA Poland SouthAfrica
NewZealand
US
$
1985
1999
Changes in manufacturing value added per $ of labour purchased versus changes in
employment 1999 vs 1985
-40
-20
0
20
40
60
80
Ireland Korea NewZealand
Turkey South Africa Brazil Poland
% c
hang
e
value added per $ of labourpurchased
employment
Ratio of labour output to labour cost in manufacturing, 1999 data, source: World Bank
database
0
1
2
3
4
5
Poland Brazil Turkey Korea Malaysia SouthAfrica
Ratio
WEF survey: Pay is directly linked to productivity? (1=little link; 7=maximum
link)
0
1
2
3
4
5
6
Changes in remuneration by skill class real terms, 1970-1999
260
10
-10
-20 30 80 130 180 230 280
Unskilled/semi-skilled
Skilled
Highly skilled
Change in remuneration %
Unemployment by skill class, 1970 versus 1999
6
1
0
55
28
0
0 10 20 30 40 50 60
Unskilled/semi-skilled
Skilled
Highly skilled
Unemployment rate%
1970
1999
CAN THE SOUTH AFRICAN ECONOMY CREATE EMPLOYMENT?
Formal sector employment trends, change in employment by education 1995 vs 1970
-3000000 -2000000 -1000000 0 1000000 2000000
No education
Lower than standard 5
Standard 6 to 9
Matric
Tertiary
employment gain/loss (numbers)
Labour force absorption rate as % of total formal sector employment
0
10
20
30
40
50
60
70
80
90
Qualification profile of the SA population 2001
None7%
Grade 8-1257%
NTC 1-31%
Diplomas5%
Degrees/higher3%
Other/unspecified1%
Grade 0-726%
WEF: The school system excels in math and basic science education (1=strongly disagree;
7=strongly agree)
0
1
2
3
4
5
6
Tertiary students in science, maths and engineering as % of total tertiary students
05
101520
2530
3540
Korea Australia Ireland Brazil Turkey NewZealand
SouthAfrica
Trends in human development (UNDP Human Development Index)
0.5
0.6
0.7
0.8
0.9
1
1975 1980 1985 1990 1995 2000
HD
I
Australia
Ireland
New Zealand
Korea
Poland
Malaysia
Brazil
Turkey
South Africa
Health indicators, malaria and TB cases per 100 000 population and HIV/AIDs prevelnce rates for ages 15-49 (UNDP) 2001
0
50
100
150
200
250
300
350
NewZealand
Australia Korea Poland Turkey Ireland Malaysia Brazil SouthAfrica
cases p
er
100 0
00 p
op
.
0
5
10
15
20
% H
IV/A
IDs r
ate
s
Malaria cases per 100 000 pop TB cases per 100 000 pop. HIV/AIDs prev rates (% age 15-49)
Professional emigration from South Africa, STATSSA vs destination country data
(Australia, New Zealand, Canada, USA and UK)
0
1000
2000
3000
4000
5000
6000
1989 1990 1991 1992 1993 1994 1995 1996 1997
Nu
mb
ers
of e
mig
ran
ts
STATSSA Destination country data
Immigration, emigration and net gain (loss) for South Africa by occupation, 2000
-3000
-2500
-2000
-1500
-1000
-500
0
500P
rofe
ssio
na
l,se
mi-
pro
f. &
tech
nic
al
Un
spe
cifie
do
ccu
pa
tion
s
Cle
rica
l an
dsa
les
Ma
na
ge
ria
l,e
xecu
tive
&a
dm
in
Art
isa
ns,
ap
pre
ntic
e &
rela
ted
Se
rvic
e
Tra
nsp
ort
,d
eliv
ery
&co
mm
un
ica
tion
s
Nu
mb
er Immigrants
Emigrants
Net loss
Technology diffusion, old technologies, telephones per 1000 people and electricity
consumption per capita
0200
400600
8001000
1200
ph
on
es p
er 1
000
peo
ple
0
2000
4000
6000
8000
10000
Kw
h/c
apit
a
Telephones per 1000 residents Electricty use per capita (kWh)
Technology diffusion, new technologies, PCs and Internet users per 1000 people
050
100150200250300350400450500
per
1000 p
eo
ple
PCs per 1000 people Internet users per 1000 people
WEF survey: "The overall infrastructure is among the best in the world"
7.1
4.04.4
5.6 5.8
7.6 7.9 8.1
0
1
23
4
5
67
8
9
SouthAfrica
Poland Brazil Ireland Turkey NewZealand
Malaysia Australia
1 = strong disagreement 10 = strong agreement
sc
ore
Estimated capital spending as a % of LT capital requirements
01020304050607080
Typical waterfront charges
0200400600800
1000120014001600
Durban Melborne Brisbane Auckland Singapore
R' p
er
TE
U
Terminal
Ancillary
Port Authority
WEF survey: "Personal security and private property are properly protected"
1.8
3.84.6
6.36.8 7.0 7.2
8.0 8.4
0123456789
1=strong disagreement 10=strong agreement
Sc
ore
PRESIDENT MBEKI IN HIS 2001 STATE OF THE NATION ADDRESS TO PARLIAMENT MADE THE FOLLOWING STATEMENTS:
“..the reality remains that our rate of growth is still too low as are the aggregate savings and investment rates. Similarly, the levels of poverty, unemployment and underdevelopment in some parts of our country are too high….
The objectives we seek to achieve are moving the economy onto a high-growth path, increasing its competitiveness and efficiency, raising employment levels and reducing poverty and persistent inequalities.
To improve our competitiveness, we must lower input costs throughout the economy.
Accordingly, we have decided to go over to a managed liberalisation of the energy, transport and telecommunications sectors.”
Cape Town, 9 February 2001.
Table : National Enterprise Survey: Obstacles to investment
rated as “severe” or “insurmountable”
Foreign owned % Locally owned %
Crime & related socialproblems
42 Crime & related socialproblems
56
High level of interest rates 40 High level of interest rates 51Labour regulations 35 Labour regulations 41Poor sales outlook 31 Fluctuations in the interest
rate40
The level of the exchange rate 30 High company taxes 39Exchange rate instability 30 Uncertainty of labour
regulations39
Source: National Enterprise Survey by Dr S. Gelb
Table: National Enterprise Survey: Government
understanding of business
Ownership How well dogovernmentofficialsunderstand theproblems facedby business?
Is government policycoherent andpredictable?
To what extent does thegovernment take intoaccount concerns ofbusiness whenintroducing policy?
Foreign Badly (38%) Unpredictable (46%) Hardly ever (49%)
Local Badly (42%) Unpredictable (39%) Hardly ever (49%)
Source: National Enterprise Survey by Dr S. Gelb
Table: Reliability and cost of infrastructure
Type of infrastructure Firmownership
Obstacle (% ofrespondents)
Benefit (% ofrespondents)
Foreign 55 8Reliability and speed of postal servicesLocal 48 10Foreign 39 6Cost of postal servicesLocal 45 5Foreign 24 31Reliability of power suppliesLocal 24 26Foreign 21 18Cost of power suppliesLocal 27 8Foreign 58 6Cost of local/national telephone callsLocal 64 5Foreign 53 5Cost of international telephone callsLocal 44 4Foreign 45 15Reliability of telephone systemLocal 44 14
Source: National Enterprise Survey, Dr. S Gelb.
Heritage Foundation Economic Freedom Rankings (1=free, 5=repressed), 2001
0 1 2 3 4 5
Australia
Botswana
Namibia
South Africa
Mauritius
Mozambique
Swaziland
Zambia
Lesotho
Tanzania
Malawi
Zimbabwe
Score
BUSINESS UNDERSTANDS THE PRIORITIES:•Transformation and greater inclusion in the economy.
•Bridging programs for school leavers (standard grade matric to higher grade matric - especially maths and science).
•The need for a quantum leap in skills development (special focus on learnerships).
•The need to have flexible immigration laws to fill the skills gap in the interim.
•The vital need to retain skills.
•Short-term measures for dealing with the structural unemployment problems (such as extended public works programmes).
•Helping to reduce bottlenecks to public sector investment programmes (including the use of public-private partnerships - clinics, prisons, road infrastructure, etc.).
BUSINESS UNDERSTANDS THE PRIORITIES:•Engaging with government to deal with efficiency and cost competitiveness of key economic infrastructure (ports, railways, municipalities, etc.).
•Investigating how to raise domestic savings (which will allow lower interest rates and provide greater capital for investment).
•Engaging with government on how to lower the cost of capital (which will then increase investment, economic growth and employment).
•Lowering the barriers to entry to business - especially small business. (Business is proposing the investigation of a Regulatory Impact Assessment Strategy to gauge the impact of new legislation and regulation for all parties to negotiation/consultation processes).
•Lowering the negative impact of crime on investment and the economy (Business Against Crime Initiative).
•Reducing marketing risks - especially for SA exports to key foreign markets.
•Improving the image of SA as an investment destination.
GIVEN THE COMPLEXITIES OF THE ISSUES THAT NEED TO BE RESOLVED
•No single constituency can solve the issues.
•A South Africa Incorporated approach is vital.
•Lets work together to tackle the issues to ensure a vision of a prosperous, inclusive future is achieved.
CONCLUDING THOUGHT“Economic growth is not a mysterious force that strikes unpredictably or
whose absence is inexplicable.
On the contrary, economic growth is the fruit of two forces: the ability of people to recognise opportunities, on the one hand, and the creation by government of a legal, fiscal, and regulatory framework in which it is
worthwhile for people to exploit those opportunities.
And since there is no shortage of energetic and entrepreneurial people wherever human beings are to be found, one of the most important factors
explaining differences in economic performance will be public policy”
“The key is simply to put sensible policies in place, and then let the intelligence, industriousness, and ingenuity of the people do the rest.”
Fred McMahon