Political Economy and Foreign Direct Investment in South Africa

Question: Discuss about thePolitical Economy and Foreign Direct Investment in South Africa. Answer: Introduction Though South Africa has devolved so much power to the provincial governments, it is not a federal state. The boundaries and names of the provinces have been set out in the countries constitution. This simply means that for any boundary or name of a province to be changed, and then it must be approved by a required number of members of parliament for this to go through. This approval will then lead to the constitutional amendment that is done on these boundaries and names of the provinces. South Africa has adopted a parliamentary system of government(Anyanwu, 2012). It has a bicameral parliament. The parliament constitutes the National Council of Provinces and the National Assembly. Its parliament is headquartered in Cape Town. South Africas parliament is the most important house in the country and it has four hundred members that are directly elected by the people. The members serve a five-year term. Article 50 of the countries constitution gives the President the power to dissolve the parliament even before the end of its term as long as the majority of members have voted and agreed to do so. The acting President in South Africa has the power to dissolve the parliament in a case where there is no any sitting president. This may occur if the parliament has failed to install a new President within a time frame of thirty days of the occurrence of a vacancy. The national parliament is normally elected by a closed-list proportional representation. About two hundred seats are normally filled from the provincial lists while the rest come from the national list. Parties are always allowed to choose if they wish to bring both national and regional lists. However, the lists are not allowed to have more candidates than the number of seats that are in parliament, especially in the national parliament. Voting and registration is voluntary in South Africa(Asongu, 2016). The only persons allowed to vote in South Africa are the ones over the age of 16 years and poses a valid identity document although the only ones that can vote are citizens over the age of 18 years. For one to be qualified to be an elected member of parliament in South Africa, he or she must be a registered voter. However, those barred from being elected are the members appointed in the public service and also other legislative bodies, anyone convicted of an offence and sentenced to more than twelve months, unrehabilitated insolvents and any person that has been declared as of unsound mind by a court of law(Dunning, 2013). At the moment, the South African citizens that live in the diaspora are also now allowed to vote. The National Assembly mostly dispenses many matters in South Africa. Bills are allowed to be introduced in the South African parliament by individual members, ministers, committees and the deputy ministers. However, the concerned minister can only introduce any bill that is related to dealings of the appropriation of revenue to the provincial governments or the money bills(Jadhav, 2012). The head of government and state is the President who has a constitutional responsibility of upholding, defending and respecting the constitution as the supreme law of the country. The President is the main unifying factor of the country and is responsible for advancing the country. The President is elected by the national parliament during the first sitting or whenever a vacancy arises that needs to be filled within a period of 30 days. The President is only required to serve for two terms. The period between the regular election of a president and a vacancy is not always regarded as a term. The responsibility of signing, assenting of the bills, summoning any house to a special sitting, referring of bills to parliament, making any appointments, referring bills to the constitutional courts, calling a national referendum, appointing commissions, conferring honors and reprieving offenders among others all rest with the President. The cabinet ministers all exercise the executive authority together with the sitting President through the implementation of the national legislation(Kivyiro Arminen, 2014). The cabinet is responsible for implementation and development of the state policies, coordination of the national functions especially in the state administrations and departments, initiation and preparation of legislation and undertaking any other state function that the constitution stipulates. The Legal System South Africas independent judiciary is made up of the High Court, the Supreme Court of Appeal, the Magistrates Courts, the Constitutional Court and other courts that have been established by the Parliamentary Acts. The Chief Justice, the Deputy Chief Justice and nine other judges all constitute the highest court in South Africa called the Constitutional Court. The highest court on land always handles all the major constitutional matters. The highest court makes decisions on disputes arising between the state organs either provincially or nationally. The court decides on the constitutionality of any provincial or national assembly bill in a situation where the President or the Premier asks for a determination about any constitutional amendments. The court also has the mandate of deciding whether the President or the national assembly has failed in fulfilling of a constitutional duty and certifying a provincial constitution. The highest court of appeal in South Africa is the Supreme Court of Appeal. However, it does not decide on constitutional matters. It only handles cases that deal with non-constitutional matters in the country. The High Court is regarded as a superior court of law with seven provincial divisions. It has an overall jurisdiction over a particular geographical location. It handles serious civil matters and criminal cases particularly those that involve over 100,000 rands. The Magistrate courts mostly handle claims under 100,000. The Magistrate courts act as a first instance for many criminal cases in South Africa. The Regional courts only handle serious cases that cannot be handled at a lower level. Economic System of South Africa South Africas economy is the second largest after Nigeria in Africa. Its economy is said to account for about 24 percent of all Africas gross domestic product. The World Bank ranks South Africa as an upper-middle-income economy. The others in Africa ranked the same are Mauritius, Botswana and Gabon(Ravenhill, 2014). South Africas Gross Domestic Product is said to have tripled to about $400 billion ever since its international sanctions were lifted in the year 1996. It has increased its foreign reserve from $3 billion to about $ 50 billion. This has enabled it to create a diversified economy that has a sizable and growing middle class after the abolishment of apartheid. However, a myriad of several problems like political mismanagement, income inequality, and crime, lack of enough electricity and low levels of education are affecting the country. These have affected its economy negatively. South Africas Attractiveness Due to its free-market, it has always encouraged its foreign investment in both the private and public sectors. There are some factors that contribute to foreign investment that include: access to raw materials, transparent regulatory framework, political stability and a huge population. It has a great potential for promising foreign investment when compared to other African countries(Asongu, 2016). Its foreign investment has been on the rise due to improvement and investment in its infrastructure. It is still ranked as the highest most attractive economy to invest in the African continent despite all the challenges it is currently facing like the slow growth and gloomy ratings. References Jadhav, P. (2012). Determinants of foreign direct investment in BRICS economies: Analysis of economic, institutional and political factor.Procedia-Social and Behavioral Sciences,37, 5-14. Kivyiro, P., Arminen, H. (2014). Carbon dioxide emissions, energy consumption, economic growth, and foreign direct investment: Causality analysis for Sub-Saharan Africa.Energy,74, 595-606. Anyanwu, J. C. (2012). Why does foreign direct investment go where it goes? New evidence from African countries.Annals of Economics and Finance,13(2), 425-462. Asongu, S. A. (2016). Law and investment in Africa.Institutions and Economies,8(2). Dunning, J. H. (2013). The role of foreign direct investment in a globalizing economy.PSL Quarterly Review,48(193). Ravenhill, J. (2014).Global political economy. Oxford University Press.