Juju costs Jozi R30m

01 September 2011 - 02:45 By CHANDRÉ PRINCE and HARRIET MCLEA
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Barbed wire separates supporters of ANC Youth League president Julius Malema and Luthuli House as police redoubled their efforts to keep order in the Johannesburg city centre yesterday Picture: HALDEN KROG
Barbed wire separates supporters of ANC Youth League president Julius Malema and Luthuli House as police redoubled their efforts to keep order in the Johannesburg city centre yesterday Picture: HALDEN KROG

The unruly and violent behaviour of ANC Youth League president Julius Malema's supporters could have far-reaching consequences for South Africa's economy.

A day after thousands of his supporters trashed Johannesburg's city centre in protest against his being hauled before a disciplinary committee, eco-nomists and international media warned that these actions might have dented the country's image.

Several businesses were forced to close because of the unruly youths, who burnt ANC flags and T-shirts bearing President Jacob Zuma's image, incidents televised live on international networks and reported in leading international newspapers.

Johannesburg Chamber of Commerce and Industry CEO Keith Brebnor estimated Tuesday's financial losses for Johannesburg at between R30-million and R50-million, but warned that the real monetary loss was "minimal compared to the real damage - image damage".

Brebnor said South Africa's investor image could be negatively affected in the same way the recent London riots dampened investor confidence in the UK. He said Tuesday's chaos followed a "long list of disruptions" that reinforced the perception that the country was becoming unstable as a trading partner.

"It might not be true, but perceptions are reality," said Brebnor.

"All the good stuff [perceptions] that we built up around the World Cup, we are losing that stuff now."

African Rainbow Minerals executive chairman Patrice Motsepe warned that there was an increased negative perception about South Africa being a competitive business destination. "If we go the wrong route now we are going to implement a policy that could take five to 10 years to correct," Motsepe said in relation to the nationalisation debate.

Dawie Roodt of Efficient Group echoed Brebnor's sentiments, saying o f greater concern was the negative message Malema and his supporters were sending out with their violent behaviour and disrespect for the ruling party.

"We must remember that international investors owe us nothing. They will only invest in a country that has a stable political situation and [that's] not what we're seeing right now," said Roodt.

He said these "shenanigans" had sent "a clear message that the cabinet and the president don't have control over the situation".

Evidence of this, said Roodt, was how Tuesday's chaos made international headlines.

The New York Times wrote: "While [Malema's] statements have solidified his support, they have often troubled potential foreign investors and members of the country's sizeable white minority."

The Financial Times said: "Mr Malema has been calling for the state to take stakes of at least 60% in the nation's mines, a move that would risk bankrupting the government and jeopardising the country's appeal as an investment destination."

Political analyst Aubrey Matshiqi, however, had a different view, saying investors were not that gullible to use Tuesday's incident as a "deciding factor" on where to seek business opportunities.

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