After the Bell: Why South Africa should learn to love (some) immigrants

There is an old joke about someone who emigrated to Canada from SA sending emails back home about the beauty of the snow-covered mountains. Then another about the kids having fun making snowmen. And then how difficult it was to clear the pavement. And, finally, confessing that more of that “white shit” had irritatingly fallen overnight. And so on.

Emigration and immigration have become a hot topic and a huge industry, so much so that there are now more and more sophisticated surveys that track the experience of immigrants. And of course, there is a ranking. So … allow me to say this is now getting dull ... SA is ranked on the list, and is — surprise! — in the bottom 10 of the 53 countries on the list.

The ranking I’m referring to is the InterNations Expat Insider 2023 list, and overall SA ranks 48th out of the 53 countries in the survey. There are sub-lists, as well, and these are really interesting because they do align with what I imagine would be the experience of expats who come to live in SA.

For environment and climate, SA ranks pretty well, as you would expect. Leisure options give us a higher ranking, and for safety and security, well, SA ranks last. Obvs. Health is okay, but travel, by which they mean just moving around in the cities, is pretty bad. Once again, obvs. Finding friends is pretty easy, the welcome culture is good, and settling in is fine. As one of my British friends said about SA, “I love it here, everybody tries so hard.”

Everybody, that is, except the bureaucrats. Where do you think SA would come on that list? Take a wild guess. Would you believe last? 

So how important is all this? Not very, you might think. It’s interesting for cocktail party conversation, but significant? No. Well, allow me to try to explain why it’s extremely important that SA improves on this ranking. More than extremely important, crucial.

The reason relates to the research done by the now very famous Ricardo Hausmann, who is a professor at the Harvard Kennedy School and the founding director of the Harvard Growth Lab (and one of the famous Harvard Group, comprised of eminent economists and thinkers who advised South Africa’s government many moons ago). 

Hausmann’s breakthrough piece of research was about trying to understand why some countries grow and others don’t. This is not a topic that allows for easy analysis, but to the extent that anyone has cracked this nut, it’s Hausmann. His explanation relates to the complexity of society.

Let me say, I am going to be indulging in some massive simplifications here — this is complex stuff. Fortunately, I have just listened to an Odd Lots podcast on the subject, so now I’m an expert.

Anyway, consider for a moment how a country progresses. The key to progress, Hausmann finds, is distributed knowledge — networks of people discovering new and better ways of doing things by incrementally increasing their knowledge and thereby increasing the knowledge of the society as a whole.

So, then he set about trying to prove the theory; initially, he used trade data because it’s available and in roughly universal categories. Hausmann and his researchers took all the exports of all countries, compiled lists of the number of exports, and measured the rarity of those particular products.

The result was an international atlas of complexity. They then correlated that with GDP growth data to come up with a predictive formula. Hausmann said on the podcast that if you had taken the picture in 2008, two outliers were India and Greece. India had extremely low-income levels for its level of complexity, and Greece had extremely high-income levels for its level of complexity. What happened since then, of course, is that India has been the fastest-growing large country in the world and Greece collapsed.

Since 1970 onwards, only 20% of countries have narrowed their income gap with the US. Those countries increased their complexity very significantly. The other 80% did not, Hausmann found.

But the crucial question is: How does a country become more complex?  If you are good at a certain thing at a certain point in time, surely you just continue on that track? Well, says Hausmann, countries tend to move from what they’re good at to “the adjacent possible”.

You don’t know how to do the things you don’t do, so you have a kind of chicken-and-egg problem. One way to fix that, says Hausmann, is by encouraging the immigration of skilled foreigners, particularly those with strategic education. 

One example he uses — there are many — is how the Bangladeshi textile trade started. A company called Desh sent 126 of its workers to South Korea to get trained; 56 of those trainees eventually started their own companies. Now, 80% of Bangladesh’s trade is in textiles. Listen to the podcast here; it’s fascinating. 

Emigration and immigration of skilled people used to be an odd rarity. It’s now an intense, international competition, and SA should realise that. DM