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Corruption threatens foreign investment

Feb 05 2013 18:01

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Cape Town - South Africans view corruption as the greatest hurdle to investment from overseas, revealed a survey from FTI Consulting.

The poll, that was conducted ahead of the Mining Indaba, showed that 80% of respondents see bribery and corruption as the greatest obstacle to foreign direct investment while 70% viewed labour strife as another major hurdle.

However, 71% of those polled regard foreign direct investment positively.

Mark Malloch-Brown, FTI Consulting chairperson, welcomed the support for overseas investments.

“while this is good news for our global clients, great care will need to be taken to ensure all constituencies are on board before a major investment is made in the country, particularly in highly sensitive industries like oil and gas and mining,” Malloch-Brown said.

The survey showed that 53% respondents wary of foreign direct investment in oil and gas. Banking and finance came second with 49%, followed by 44% both for agriculture and defence while 41% were concerned about metals and mining.

Overseas state-owned companies were a concern for 75% respondends and 74% expressed concern with sovereign wealth funds. "This reflects 64% being concerned that foreign investment is used for gaining political influence in the country," the poll stated.

A large number of respondents also expressed anxiety over perceived Chinese investment practices that neglect worker welfare, crowd out employment or result in the loss of control of strategically important minerals.

Regarding "a controversial overseas investment", 87% stated that they would take action in the form of discussions, joining a protest group or contacting the media with only 10% indicating that they inform a political representative.


 

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