whythawk ratings: measuring effective development

What dreams may come ...

Beside him was a wooden chair made of slim poles in an interlocking nest of triangles. Inexpertly made but showing tremendous promise. Beside it an old man with four teeth in his head grinning like a young boy with the sun rising before him.

A few years ago this part of Woodstock was a run-down area with little hope of improvement. Not much has changed. Except for the hope.

Investors and entrepreneurs are unusual people. They can look at a derelict area and see opportunity and profit. It was a magnificent spark of that adventurism that converted the old Biscuit Mill into an upmarket office and business complex. It was an even greater dollop of self-belief that created the Saturday morning market of produce, food and crafts.

Imagine investing that much in an area far removed from the usual haunts of the wealthy. Imagine, not just the hope, but the conviction that customers will come.

I visited in the first few weeks of its opening and have returned every month or so since. I have seen the random array of stalls offering a guess-work of goods give way to a more focused set of offerings. I have seen badly-conceived businesses make way for ones who are better. And it has become popular. Gone are the days when you could park outside the front door. Now you're lucky if you can still find parking within reasonable walking distance.

Over the last few weeks the market has doubled in size as a new extension was completed. As the number of shoppers has exploded the area outside the mill has started to change. Old buildings suddenly have tenants. Older buildings are being sold and renovated. Residents are developing a talent for selling as they offer goods from their front-doors. Street traders are appearing on the thoroughfares. Hundreds of jobs have been created. Billions of rand has been added to property values.

The old man with his chair led me through his house and showed me all the new ideas he has to build and make and sell. He is experiencing the miracle that happens when investors magically appear.

All of this investment has taken place, not because the entrepreneurs wanted to bring hope to a poor area, but because of their own genius for knowing how to make a profit.

Imagine that things were different. Perhaps the department of Trade and Industry decides that retail complex owners make too much money and rentals should be regulated. Maybe developers should apply for a certificate of need so that government can decide whether investments are good ideas or not.

Imagine the result. As rents are artificially lowered, not through competition, but through an act of parliament, owners will re-evaluate their properties. Those that cannot be maintained will be shut. Those that remain will be made profitable by reducing maintenance and services. New ones – such as the investment at the biscuit mill – will never happen.

No, it isn't being discussed. But it has happened elsewhere.

The government declared that medicine prices were too high and fixed them. Marginal pharmacies went out of business, new investment dried up. New hospitals are not being built because the ministry has decided to issue a moratorium on new construction. The same things are true of telecommunications, energy and mining.

Job creation does not come about through the benevolence of an act of parliament. It comes about through the bravery and ambition of entrepreneurs and investors looking to their own profit.

To the parliamentarians who feel it is their right to regulate business out of the economy, perhaps you should visit an old man making his first chairs and tell him that the investor down the road is doing him harm.