Pledge in Alex a step to tackling poverty

In December 2016, various leaders from business, labour, the media and nonprofit organisations met in Rome to discuss the plight of the world’s forgotten poor masses.

At the heart of the deliberations was the realisation that despite significant strides made in “modernising” society, billions of people remain locked out of the system, excluded from mainstream opportunities.

They are characterised by poor access to digital infrastructure, the financial system and educational and primary healthcare resources.

The general consensus over the past few decades has centred on globalisation as the most effective way of distributing resources more equitably across global citizens. Implicit in this consensus is the understanding that globalisation – within the sociopolitical architecture – is the best way to ensure improvements in economic and social outcomes for the greater society.

However, as one of the delegates in Rome, former Nigerian finance minister Ngozi Okonjo-Iweala, said in Fortune magazine, “We need to think about the losses and the losers of globalisation.”

Globalisation occurs within the context of limited resources and, inevitably, its redistributive effects are affected and tampered with by multiple externalities.

Unfortunately, those who tend to feel short-changed share common features — they are usually poor, rural and low-skilled.

The migration of resources tends to affect them more as they are unable to adapt to changing circumstances. Their inability to migrate creates a concentration of economic outcasts within particular geographies. This concentration of poverty then becomes localised within specific jurisdictions.

SA presents a curious case study of this phenomenon. Its economic profile is undoubtedly a vast improvement from what it was 20 years ago. More people have jobs, per capita incomes have increased and universal access to education and free healthcare has been achieved.

Financial reporting and auditing systems are world-class. The stock exchange remains at record levels, somehow indicating a degree of optimism in the business sector.

And yet the majority of South African citizens feel more excluded and marginalised than before.

There is an overwhelming sense that all these positives have been achieved by catering to a limited base of those with skills and proximity to resources.

This has come at a significant social cost, as those who have not been part of these positive outcomes have become ever more dependent on the state.

This is evident in the number of citizens in social assistance programmes and the ranks of unemployment. Business and the government like to believe they have played their part as much as they could have. But this rhetoric means little to those who are crying out for an opportunity to be absorbed into the system.

At the core of this paralysis is the loss of faith in the ability of business and the government to collaborate and create opportunities for citizens. The state is beset by graft scandals, which have paralysed its ability to deliver.

Business, on the other hand, blames policy volatility for its reluctance to invest aggressively in the economy. This makes it easy for politicians of a populist persuasion to call out this “lack of patriotism”.

Neither position is tenable as society looks to business and the state to break the impasse and inject life into the country’s economy.

A first step was taken by business last week when Business Leadership SA (BLSA) signed its #BusinessBelieves pledge in Alexandra, near Johannesburg.

The setting was symbolic, as Alexandra is the most explicit example of how globalisation has created what Fortune magazine describes as “economic gains paired with a widened gulf between economic insiders and the outcasts”.

In its pledge, BLSA sought to reinforce its role as an enabler of opportunities. This is paired with a commitment to tackle corruption within business and to present the human face of business that society can identify with.

It is, of course, a daunting challenge whose success depends on the state’s ability to embrace business as a social partner.

Until business and the government find a way to mend their bridges, SA will remain incapable of enabling a child born into the poverty of Alexandra to find its way across the bridge to the economic promise of Sandton. And that is something that should worry us all.

THERE IS A SENSE THAT ALL THESE POSITIVES HAVE BEEN ACHIEVED BY CATERING TO THOSE WITH SKILLS AND PROXIMITY TO RESOURCES