We have the capacity to drive regional economic growth
ABUSINESS Report reader recently sent me an e-mail in response to my article published last week. The mail raises certain socio-political concerns, and I’ll share the full text, but without revealing the source as the writer has yet to respond as to whether he can be quoted:
“Dear Mr Qubeka, I note your article in the Cape Times Business Report of April 21. Two significant problems which I seldom hear mentioned are: a) the question of family planning; b) the quality of education. The fact that we have a literacy problem, as a Brit, I find incomprehensible. This combined with the fact that some people are having many children (means) abject poverty is a certainty.
“Had my wife and I had six or seven children, we would also be living in a shack! Until these problems are conscientiously addressed, South Africa is going nowhere. In closing, I would wager that not a single member of Parliament is sending his or her child to a government school.”
Without getting into the merits or the context of the views expressed, I wish to state that of course the issue of unmanaged population growth is a major concern and it requires attention. I’m certain that relevant organs of state are dealing with it head-on, and I would invite comments from the Department of Social Development.
Conversely, I wish to remind the writer that illiterate communities breed more illiteracy and that is a very difficult cycle to break. Certainly our education system has inherent challenges that need to be addressed, notwithstanding its historical stench.
I’m certain the Department of Education can respond and share its plans. One thing I’ll point out, though, is that while the focus is on the education content, I’m certain that the writer would not wish to take his own kids to most of those “barracks-like apartheid school architecture” with no modern-day resources.
The majority of black people in general and black business in particular want the same things that other privileged South Africans want, and more.
I’ve said before that the ultimate success of our economic transformation agenda would be more successful if better understood and supported by our white counterparts, and through constructive engagements. So far what we hear are only negative sentiments aimed at controlling the narrative rather than a conversation aimed at building a better country, while of course respecting differing views.
There is no doubt that the current political landscape is highly contaminated and needs great minds with great ideas and brave hearts that are driven by a common national interest.
I also believe that business as a collective could do much more to stabilise the country through driving a more robust political economic agenda that supports the government’s socio-economic development agenda. It can mobilise resources better towards a more inclusive economic architecture.
Notwithstanding the threat that the country could be sliding towards a Zimbabwe or a Venezuela (as some editorials suggest), if we continue with radical economic transformation, South Africa has a very strong economy with sufficient embedded checks and balances. If anything, these references are used as “scarecrow” to repel radical economic transformation.
In fact, the country will slide deeper into turmoil if we don’t become inclusive in all aspects of our developmental approach.
It is more helpful for the engagement to be more rational and robust, instead of the constant fear that sounds like the old “swart gevaar” being placed daily on the national radar screen. It is not helpful.
The elephant in the room is the continued control of a few companies who dominate the supply chains across major sectors, particularly in state-owned companies. The unfair distribution of contracts limits the impact of contracts and the spread of incomes.
The opening up and broadening of procurement spend is essential in deepening the economic participation of new entrants and to ensure prosperity is expanded and the racial market distortion within the economy is altered.
It’s also concerning when oil companies are reported to be perpetuating collusive behaviour at the disadvantage of new entrants and fair competition. I worry more when pharmaceutical companies dominate government supply chains without also assisting in building diversified suppliers in this crucial markets.
India has demonstrated how local pharmaceutical manufacturing capability could be developed by local people, but through joint ventures with international players.
The local automotive industry enjoys a significant slice of government grants and incentives, and yet it remains hugely untransformed.
According to the Minister of Trade and Industry, Dr Rob Davies, “the transformation of the sector will ensure that the sector is representative of the national demographics profile – it is important and non-negotiable”.
The retail sector, controlled by a handful of powerful companies has a stranglehold on the local supply chain, while the retail shelf space is impenetrable by new black players, because of vertically integrated monopolistic tendencies.
The retail sector particularly thrives off the huge black buying power and yet it is one of the least transformed. It’s an ideal sector that could accelerate economic transformation through opening up its major value chains, and increase support for a new vibrant manufacturing sector that would increase black ownership of the supply sector.
The radical diversification of the manufacturing sector across many industrial segments has the potential to re-industrialise South Africa’s industrial base and contribute towards the creation of thousands of sustainable jobs.
Of course, there is merit in seeking monetary and fiscal intervention relating to the relaxation of interest rates and taxation in order to reduce the statutory and regulatory burden for small enterprises, and drastic policy shifts should target incentivising businesses to contribute towards supporting small, medium and micro enterprises.
We need to unlock our economic development potential through inclusive growth.
Doing better We can certainly do better as a leading economy on the continent. We have the capacity, depth of knowledge and human capital to become the industrial giant that could be leading the resurgence of the southern Africa region as the industrial tip of the continent.
We have the capacity to drive regional economic growth through an integrated economic development trajectory that would enable the arrest of migration to the country, and to balance regional economic development and job creation.
We have the right policies; the challenge has always been implementation. We therefore need to support the government in deepening economic development that takes cognisance of the disparities that continue to divide us as a nation.