Ramaphosa finds an ally in China
Cyril affirms Xi Jinping’s championing of globalisation at the WEF, saying what worked for China can work for South Africa
SELLING SOUTH AFRICA: Deputy President Cyril Ramaphosa, flanked by Finance Minister Pravin Gordhan, left, and Minister in the Presidency Jeff Radebe, addresses the Business Interaction Group on South Africa at the World Economic Forum in Davos, Switzerland, this week in Davos DEPUTY President Cyril Ramaphosa set out his economic stall at the World Economic Forum this week, endorsing in an interview the robust defence of globalisation by the keynote speaker, Chinese President Xi Jinping.
Ramaphosa’s attempt to find middle ground between the ANC and business is likely to be a key differentiator between him and key rival Nkosazana Dlamini-Zuma, whose economic policy remains unclear. But it is a tricky job to clearly articulate a view that will mobilise supporters while remaining true to his own views and his position as a businessman.
The emergence of a leader of the largest communist party in the world aggressively defending business and trade makes Ramaphosa’s job somewhat easier.
At the conference, Xi was a key voice in a growing debate about globalisation’s winners and losers, surprising the approximately 2 700 senior government and business leaders with an energetic defence of international trade — a role usually adopted by the US.
Ramaphosa said he agreed with Xi’s speech, during which the Chinese leader said: “The problems troubling the world are not caused by globalisation; they are not the inevitable outcome of globalisation. China will keep its doors wide open. We hope that other countries will also keep their doors open to Chinese investors, and maintain a level playing field for us.”
Ramaphosa said: “I agree with what he said. He had a wonderful analogy. They [the Chinese] were very sceptical about globalisation themselves and they decided to take the plunge.
“And they got into an ocean of globalisation and they encountered a lot of challenges and difficulties, but they learnt to swim and ride with the tides. It has delivered for them and their people a great deal of benefits and they have lifted 600 million people out of poverty largely because they took advantage of a more open type of economy and they focused on manufacturing [and] infrastructure development.” DAVOS DEBUT: Chinese President Xi Jinping addresses the opening session of the World Economic Forum. It was his first visit to Davos This approach resonated with South Africa’s position. “We have opened up our economy and of course we face a lot of challenges, particularly in relation to some of the goods that keep coming in. People have been up in arms about the chickens that come in from Brazil, Europe and all that.”
But, Ramaphosa said, “we are keen players in the globalised economy. The fact of the matter is that South Africa can never become an island in the economic world. We cannot, and by definition it cannot happen. We have been players for a long time; our exports, particularly commodities, go all over the world.”
Ramaphosa also reflected on undercurrent differences between the government and business, some of which emerged during discussions at the forum, sometimes in public but sometimes not.
The South African delegation to Davos has had a successful trip, largely presenting a united front. But there was one small spat between the government delegation and Investec CEO Stephen Koseff. Koseff has pre- GIVING IT A MISS: Donald Trump wasn’t at Davos, because he had another appointment in Washington — his inauguration as president of the US viously said that South Africa’s economic policies retard growth and the government should adopt a growth agenda rather than a redistribution agenda if it wants the economy and country to gain positive momentum.
“When you adopt a growth agenda, redistribution will automatically happen if you build the right skills and support entrepreneurship,” Koseff said at a results presentation.
This time the debate was over the ANC’s adoption of the term “radical economic transformation”. Ramaphosa said there were “nice heated discussions and debate” around the term, which appears to suggest foreign investment in South Africa will not be safe.
“The word ‘radical’ is a term that they would like to be interpreted properly, or they would like to see a softening. But it is a political term.
“The more economic term that I think people like that would respond more warmly to is ‘inclusive growth’,” he said.
“I did say in my interaction with the South African team in the end, transformation is a deep cry — from players in the South African economy who have been excluded — for inclusion. They say, include us — we want to be included in the economic prosperity of our country.”
According to Ramaphosa, “radical economic transformation equals inclusive growth”.
Investors first and foremost wanted certainty, he said.
“As soon as the rules are clear, they are ready to play. If the rules are unclear, then doubt creeps in and then they hold back.”
But members of the business delegation were not so sure the issue was just one of certainty and “inclusive growth”. One said that, given South Africa’s advantage over many other emergingmarket countries in its developed financial system with deep debt markets, “we should be doing much better than we are”.
Nice heated debate around the term radical economic transformation
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