Foreign divestment, economic growth and development in South Africa: an empirical analysis

PurposeThe purpose of this study is to investigate the effect of foreign direct divestments (FDD) on economic growth and development in South Africa for the period 1991–2019.Design/methodology/approachThe non-linear autoregressive distributed lag technique is used for the empirical analysis. Two regression models are specified, one for economic growth and the other for development which is proxied by poverty.FindingsThe empirical results suggest that foreign divestments are detrimental to both economic growth and development. Furthermore, the results suggest that the negative effects of foreign divestments outweigh the positive effects of FDI inflows.Practical implicationsSouth African policymakers should thus use policies that promote the retention of FDI inflows together with those that attract inflows. Furthermore, policies that promote economic freedom such as transparency and reduction in the time frame for granting government permits for business operations are also of paramount importance.Originality/valueMost of the available literature on FDD focuses on the firm perspective. Available studies on the effect of FDD on economic growth do not investigate the effect of divestment on economic development. Economic growth is a necessary but not a sufficient condition for the achievement of socioeconomic development.

How Big Oil is manipulating climate science

The UK has a new king (doi:10.1136/bmj.o2196),1 one who believes that modern medicine must combine the “best of new technology and current knowledge with ancient wisdom” (doi:10.1258/jrsm.2012.12k095),2 and a new prime minister, Liz Truss, who promises to deliver, deliver, and deliver (doi:10.1136/bmj.o2147).3 England has a new health secretary, with a worrying track record on health (doi:10.1136/bmj.o2193).4 The US has introduced a law that limits the profiteering of drug companies(doi:10.1136/bmj.o2163).5 Scotland is considering legalising assisted dying (doi:10.1136/bmj.o2205).6 And The BMJ has appointed three new columnists (doi:10.1136/bmj.o2201, doi:10.1136/bmj.o2195, doi:10.1136/bmj.o2206).789 And yet, covid persists in posing questions that are difficult to answer (doi:10.1136/bmj.o2183),10 including the merits and role of testing (doi:10.1136/bmj-2022-071215, doi:10.1136/bmj.o2055).1112 A plan to solve the workforce crisis has many obvious factors to consider yet remains elusive (doi:10.1136/bmj-2022-072977)13;new evidence underscores the worrying link between doctors’ burnout and deterioration in patient care (doi:10.1136/bmj-2022-070442, doi:10.1136/bmj.o2157)1415;health service whistleblowers still receive shoddy treatment (doi:10.1136/bmj.o2187)16;and people at the end of life continue to struggle to benefit from palliative care (doi:10.1136/bmj.o2202).17 Another constant in our ever changing world is industry’s attempts to manipulate science, behaviour that we would now describe as disinformation. Two particular areas of focus are the push for fracking, something of which Liz Truss has spoken favourably—despite evidence pointing to climate harm from methane leaks (doi:10.1136/bmj.k2397)19—and for developing carbon capture technology, a response to carbon emissions that has seen universities receive huge donations even though industry’s internal documents accept that carbon capture doesn’t make economic or environmental sense. Evidence of attempts to manipulate science were persuasive in our decision to stop publishing research funded by the tobacco industry (doi:10.1136/bmj.f5193).20 We already support divestment from fossil fuels, and this new investigation is another spur for medical and healthcare organisations to join us (doi:10.1136/bmj.m167).21 Our policy is also to decline all research funded by companies that produce fossil fuels, although their involvement in research into alternative green energy solutions makes this calculus more complex.