Shuttleworth's fight is one we should all support
Mark Shuttleworth is suing the South African Reserve Bank for the R250 million he had to pay them as an “exit levy” when he was forced to emigrate from South Africa in order to expand his business internationally back in 2001, writes Chris Becker, an economist with ETM Analytics and contributor at the Mises Institute South Africa.
Capital and foreign exchange controls make it too onerous to run an international business from South Africa, which is why entrepreneurs are being forced to set up businesses overseas, especially those businesses where “IP” (Intellectual Property) is involved such as in the technology sector.
Shuttleworth said in an interview with Techcentral that:
“The goal of this application to the court is to establish the rights of South African entrepreneurs not to have to emigrate in order to work on a global basis. The case seeks to ensure that South Africans can stay resident in South Africa and retain freedom of investment globally, subject to appropriate regulatory supervision in line with common practice elsewhere.
It is a great loss for South Africa to encourage people to emigrate rather than allowing them to build global operations from small beginnings at home, as other countries now do.”
The SARB’s Senior Council, Jeremy Gauntlett, doesn’t get Shuttleworth’s argument at all. Gauntlett said in comments quoted by Moneyweb:
“He couldn’t get his money out of the country. Now he wants to pull the whole system down. Why should this financial refugee, living on the Isle of Man, speak on behalf of the entirety of South African society?”
The point is Shuttleworth was forced to take his money out of the country because Section Nine of the Currency Act makes it too costly and prohibitive to run an international business from South Africa. It is because of capital controls that Shuttleworth was forced to take his money out the country.
Imagine the number of jobs Shuttleworth could have created had capital controls not been around and it was easier for him to invest his billions here to set up businesses to serve an international market. I know of other investors and entrepreneurs who would prefer to set up businesses in South Africa to serve an international market, but move offshore so they do not have to deal with very burdensome costs of forex and capital controls.
This is a very important battle that Shuttleworth is fighting. If he wins South Africa might be able to retain who knows how many start-ups in the future. He has also said that if he wins, he will use the R250 million proceeds to fight future constitutional battles on behalf of the South African public.
See the original here.