Amcham Business Climate Survey - 2005

UNCLAS PRETORIA 004895 SIPDIS USDOC FOR 4510/ITA/MAC/AME/OA/DIEMOND TREASURY FOR OAISA/BCUSHMAN USTR FOR PCOLEMAN SENSITIVE SIPDIS E.O. 12958: N/A TAGS: BEXP ECON EINV SF SUBJECT: Amcham Business Climate Survey - 2005 REF: 04 Pretoria 5303 Sensitive but Unclassified; Protect Accordingly. Not For Internet Distribution. ¶1. (SBU) In the American Chamber of Commerce's (Amcham) 2005 Business Climate Survey, 75 percent of companies viewed the business climate as "excellent" or "good," up from 62 percent last year. Ninety-two percent of companies plan to invest more or the same and either to maintain or hire more staff. Fifty- three percent of respondents plan to invest more in the coming year, up slightly from last year. ¶2. (SBU) As last year, respondents most frequently cited political stability, sound macroeconomics and economic growth as favorable factors influencing business and investment. According to the survey, the biggest challenges are Black Economic Empowerment (BEE) policies, finding and retaining skilled staff, and crime (more than half had been adversely affected). ¶3. (SBU) The majority of companies (80 percent) see BEE as important and essential for economic growth; however, 66 percent see it as a hindrance to further investment. The vast majority of companies have in place BEE polices, including employment equity and BEE enterprise development and procurement programs. U.S. companies have invested heavily in skills development. Sixty-nine percent of companies spend between 3-12 percent over and above the 2 percent skills development levy on in-house training as a percentage of payrolls. Fifteen percent have sold equity. ¶4. (SBU) The most highly regarded government organization is National Treasury, followed by the Department of Labor, Department of Trade and Industry, and the SA Revenue Service. The weakest government organizations are the SA Police Service and Departments of Health and Communications. ¶5. (SBU) Telkom, the parastatal telecommunications company, was seen as expensive and inefficient with poorly trained technical staff, poor response times, and long waits for installation and upgrading. On the other hand, Eskom, the parastatal electric utility, was described as efficient and professional. Power failures, however, are becoming a financial drain and shutting down business communications systems. ¶6. (SBU) Amcham plans to send the survey to the South African government and issue a press release. The survey results will be sent by e-mail to AF/S, Commerce and USTR. Survey results are not fully comparable with last year due to changed questions and limited sample size. Fifty-nine companies participated in the November survey. TEITELBAUM