To my mind

Finweek English Edition - - Letters - BY COLLEEN NAUDÉ colleenn@fin­

AT­TACK IS THE best means of defence. And this adage springs to mind when hear­ing what Thabo Mbeki had to say to busi­ness lead­ers at his re­cent im­bizo in Gaut­eng. He blamed them for the prob­lems be­ing en­coun­tered by small, mi­cro and medium en­ter­prises – the so-called SMMEs.

The Pres­i­dent crit­i­cised busi­ness lead­ers for not demon­strat­ing the type of lead­er­ship that would help elim­i­nate the chal­lenges faced by small busi­nesses. It’s prob­a­bly true that suc­cess­ful busi­ness lead­ers play an im­por­tant part as role mod­els in the com­mu­nity.

But to say that it’s their re­spon­si­bil­ity to en­sure the suc­cess of small busi­ness­men is stretch­ing it too far.

That’s where the strat­egy of at­tack as the best means of defence comes in. The Pres­i­dent’s at­tack on busi­ness lead­ers was a clever ploy to di­vert at­ten­tion from crit­i­cism from their ranks con­cern­ing is­sues such as the high cost of telecom­mu­ni­ca­tions and trans­port and South Africa’s dire skills short­age.

And when black busi­ness­men had the courage to protest that they’re bat­tling to ob­tain fi­nance and train­ing, which is ex­ac­er­bated by late pay­ments by State de­part­ments – thereby cre­at­ing enor­mous cash flow prob­lems for SMMEs – Mbeki clev­erly di­verted the of­fen­sive.

Though Mbeki’s strat­egy of blam­ing busi­ness lead­ers helped him save face, surely he couldn’t ever have imag­ined it would di­vert at­ten­tion from SA’s real prob­lems.

Other is­sues raised – such as the lack of in­fra­struc­ture, poor ser­vice de­liv­ery by State de­part­ments and in­ad­e­quate sup­port for SMMEs – must ob­vi­ously be laid at Gov­ern­ment’s door.

And talk is cheap – es­pe­cially in Gov­ern­ment cir­cles – con­cern­ing the need to pro­mote en­trepreneur­ship, as if to cre­ate the im­pres­sion that this is akin to a mir­a­cle cure for SA’s un­em­ploy­ment prob­lem. Nev­er­the­less, the level of en­trepreneur­ship in SA still falls far short of what’s be­ing ac­com­plished in other coun­tries, as mea­sured by var­i­ous cri­te­ria used in the Global En­trepreneur­ship Mon­i­tor (GEM), com­piled an­nu­ally by the Univer­sity of Cape Town.

The latest sur­vey, is­sued ear­lier this year, showed that the pro­mo­tion and sup­port of en­trepreneur­ship in SA are gen­er­ally still in­ad­e­quate.

Ad­mit­tedly, there are ma­jor ob­sta­cles – such as ac­cess to fi­nance – that busi­ness lead­ers should ad­dress more in­no­va­tively. Re­search un­der­taken for GEM in­di­cates, among other things, that banks re­quire too much col­lat­eral from en­trepreneurs.

But Gov­ern­ment isn’t ex­on­er­ated in the re­port, Mr Pres­i­dent. Pro­pos­als con­cern­ing Gov­ern­ment pol­icy in­clude eas­ing the ad­min­is­tra­tive bur­den on en­trepreneurs and sim­pli­fy­ing reg­u­la­tory pro­cesses. Fur­ther­more, Gov­ern­ment should re­frain from in­tro­duc­ing new reg­u­la­tions be­fore their ef­fect on SMMEs has been thor­oughly in­ves­ti­gated, and a dis­tinc­tion should be made in labour law for small busi­nesses to al­low them more flex­i­bil­ity in their for­ma­tive years.

What’s cause for con­cern is that th­ese rec­om­men­da­tions, plus a long list of more spe­cific ones, have been high­lighted in GEM re­ports since 2001 as mat­ters re­quir­ing ur­gent at­ten­tion.

“There’s the per­cep­tion that the rel­e­vant stake­hold­ers have, in the past, not ad­dressed all of th­ese rec­om­men­da­tions,” the re­port says.

The rec­om­men­da­tions in­clude a list of more than 20 in which Gov­ern­ment is specif­i­cally named.

The re­port also says that cor­rup­tion and ne­po­tism must be erad­i­cated by the po­lit­i­cally pow­er­ful, that pol­icy con­flicts should be high­lighted and solved be­tween Gov­ern­ment de­part­ments and that ser­vice de­liv­ery at var­i­ous Gov­ern­ment lev­els must im­prove dras­ti­cally – one of the se­ri­ous con­cerns raised by busi­ness­men at Mbeki’s im­bizo.

Judg­ing from the ev­i­dence of a prop­erly re­searched doc­u­ment like GEM, the prob­lems raised seem valid and Mbeki cer­tainly has a con­sid­er­able amount of work to do fix­ing short­com­ings in his own ranks rather than re­vert­ing to at­tacks on SA busi­ness.

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