Entrepreneurs cashing in post-1994
“Kalimera, Howzit. Welcome to Kefalonia, my name is Tassos.”
It was about as unusual an introduction to a Greek island holiday as you could get. It turns out that Tassos spends part of the year at home in Ballito, and in the peak tourist season he and his brother run the family hotel business in the Ionian Islands, made famous in the Nicholas Cage movie Captain Corelli’s Mandolin.
Tassos’ father was smuggled out of Greece during its post-World War 2 revolution and ended up in South Africa. He did extremely well and built up an impressive coal enterprise, which he sold in the tense run-up to the 1994 elections amid concerns about the future and the impact that the trade union movement would have on the business. He received his cheque from a young guy by the name of Ivan Glasenberg and repatriated the funds to the island
village of Fiskardo on Kefalonia, where he invested in Greek property.
Glasenberg, with his above-average risk tolerance, is now one of the world’s richest people and is planning a secondary listing of the newly merged Glenstrata on the JSE. This is while our Greek friends are stuck with visually appealing, but highly taxed brick-and-mortar assets in a broken economy.
The world is full of bizarre contradictions. Despite much of the gloom that preceded the ’94 elections, well-off South Africans have done better in the past 20 years than did the generation before them.
As former president Thabo Mbeki proudly proclaimed in his 2006 State of the Nation Address: “Freedom has been good for business in South Africa.” He was right.
Democracy has been good to anyone with capital strategically and sensibly deployed. The past two decades have seen the creation of brand-new industries and the generation of trillions of rand in new value for investors with the creation of telecommunications giants such as MTN and Vodacom, the establishment of a small but vibrant technology sector (ignoring the boom and subsequent collapse of the Didata shareprice) and the rapid expansion of the country’s capital markets.
Democracy has freed South Africans of all hues to grow their personal wealth beyond their wildest expectations. The über-wealthy of 20 years ago are today considerably better off, but a new generation of entrepreneurs has also seized the opportunity afforded them by the opening of global markets to SA business. Many of them happen to be Afrikaners. Arguably the end of apartheid and the transition to democracy has done more for the economic empowerment of Afrikaners than the Broederbond ever did. It is one of the most delicious ironies of the demise of apartheid: the protectionist ideology, designed to advance the interests of particularly Afrikaans-speaking whites, is that many of the biggest beneficiaries of the new political dispensation happen to be Afrikaans-speaking and have seized the commercial opportunities presented to them over the past 20 years.
Analyst JP Landman, a former editor of this magazine, points out in his new book The Long View that South Africans had become steadily poorer in the decades preceding the end of apartheid. Between 1975 and 1993 he points out that South Africans had less and less spending power. Measured in 2005 rand, he says we were 11% poorer by 1993 than we had been in 1975, and that the country’s per capita incomes had been eroded steadily for two decades.
In sharp contrast to the economic declines then, the past 20 years have seen the economy expand by 77% in real terms. Averages are dangerous as you know – the inequality gap is significant and statistics
WITH ONE EXCEPTION, THEY ALL HAVE A CONNECTION TO ONE TOWN – Stellenbosch
suggest that SA has one of the biggest in the world. Stick your head in the fridge and your feet in the f ire and on average you are absolutely fine – but Landman’s point is valid in that more people are better off today than they were in 1994 and at the start of the country’s new political dispensation.
He highlights the end of sanctions, which enabled South Africans to integrate into the global economy, gaining access to capital markets as being a primary driver of this new wealth creation. Companies led by savvy CEOs have diversified their businesses globally, creating companies of international stature: Aspen Pharmacare, Richemont, SABMiller and Naspers* have all made their mark way beyond the confines of the country’s borders.
Scholars of business history know that few entrepreneurs succeed in a vacuum. There is an underlying common thread weaving together the most successful Afrikaans-speaking business leaders of the past two decades. Whereas SA’s political elite, under the old order, generally emerged from under the oaks at Stellenbosch, so too has the new Afrikaner business elite.
The boere billionaires featured in this story all have a strong education or business connection to the town, just one of them – FirstRand co-founder Laurie Dippenaar – is from outside the clique. There must be something in the water as this town remains an incubator of great ideas and a source of capital for future generations of boere billionaires in the town that we’ve renamed Stellenbucks.