UK Visa Trade Wars

[Philip Copeman]

In a trade war, he who shoots first wins, instead South Africa plots visa revenge. Game theory gives us a better way.

For those of you that have not followed this story or those that don't travel much, 4 years ago The UK revoked the Visa rights of South Africans and made a visa application compulsory. Ostensibly this was to overcome the shortfalls in the South African visa system and prevent unwanted entry into the UK.

At the time I wrote vociferously that this was the first shots in a trade war. 400 000 South Africans who visit the UK now have to apply for a Visa at a cost of between R1 000 and R 3000. My that is a good business – between R400M and R1.2 Bn per year just for double stamping passports. That is 6 times more than the entire R 200 M aid budget to SA (also recently revoked). Effectively this means a transfer of admin jobs making travel documents from South Africa to the UK. Somewhere in the UK there is an office of overpaid clerks taking a lunch break to go highstreet shopping on a guaranteed revenue stream of R 1 Bn.

My voice four years ago was not heard. Few listened to me in South Africa, and my British customers got pissed off at my colonial manners.

Wakey, wakey four years later our Foreign Minister Maite Nkoana-Mashabane wants to do something about it. Minister, if you had listened to me 4 years ago, we would not be starting this war R 4 Bn down. The idea mooted is that we should retaliate and start charging UK visitors to come to South Africa. Is this the best thing to do?

Volumes of game theory studies show that in a trade war if they shoot first and you do not shoot back - you lose. We are obliged to shoot back. Or are we?

What are the alternatives? William Hague is in town this week. We could politely ask The UK to scrap the Visa applications. Anyone who has travelled to the UK recently knows that the South African home affairs system is just as efficient as the British one (actually faster and cheaper), the argument of document quality is fallacious. If the SA tourists were to pay this to South Africa instead, there would be an increase in Visa quality. That is never going to happen. Sadly, this can only happen if we lay off those new appointed British clerks who now live off the R 1 Bn a year. Cutting cushy Government jobs is never popular in the UK.

The rub is that making it difficult for UK citizens to come here is not going to help South Africa. We really do want those lilly white tans turning red here in the Cape and not in Turkey! Look at the numbers. Taking UK/SA trade data from SAFTI shows that The UK is our largest EU customer. We export 7.5 bn Euros or 36% of EU27 imports to the UK. We buy 4.1 Bn euros or 16% of EU21 exports). This means that terms of trade are 3.4 Bn in our favour with the UK. This number is important. Before we start pushing the UK around, try to remember the old addage, “You can't win an argument with a customer.”

Strategy number one - ANC style, we do nothing. We focus on getting our exports up to them and simply take the R1 Bn (80M Euros) a year in Visa application charges as a “discount” on the 3.4 Bn that we ARE already making from them. It is choking under the colonial yoke, but it is better than a retaliation.

Strategy number two - I believe a more aggressive route will help us. If the UK government has assessed that they can “slap” a surcharge on SA visitors (my last family visit cost R 15 000 in visas before we even ordered our airtickets!) and it still does not detract from visitors, then we can do the same. For every Visa application of a South African to the UK, whatever the UK charges, we double it. A family visit for 4 is going to cost you between R8 000 and R 24 000 in Visa costs. So what if a few families decide to holiday in Durban or Cape Town rather than the UK, increased local tourism is good for us and the surcharge will generate us a handy R1 Billion per year in revenue. That money would have been squandered in the Pubs of London anyway.

Now take the newly acquired R 1 Billion and use it to subsidise the export activities of the South African exporters (people like TurboCASH!) and/or use the budget to attract UK tourists to South Africa. A promotion like we GIVE the incoming UK tourist R 3 000 in spending money or vouchers to our hotels as they slip effortlessly through our Visa free passport gate. Our balance of trade with the UK gets even bigger. Only the small minded UK Foreign service that instigated the first Visa charge and the visiting SAFFA in London lose. Everyone else is a winner!

Minister Maite– show us that you have the balls to act.

Declaration. Philip Copeman is Project leader of TurboCASH accounting and a member of the Pan Africanist Congress. The views expressed here are entirely his and expressed here as an independent economist.