Eight is­sues that are preva­lent as South Africa heads to Davos for the World Eco­nomic Fo­rum 2017 with Dr Iqbal Survé

EDITOR’S NOTE Adri Senekal De Wet Pro­file: Dr Iqbal Survé

The Star Late Edition - - BUSINESS REPORT -

Eight is­sues are preva­lent as we head to Davos for the World Eco­nomic Fo­rum (WEF) 2017.

The Sekun­jalo Group of Com­pa­nies has, for the past 10 years, headed an­nu­ally to Davos for the pow­er­house WEF, led by its chair­man, Dr Iqbal Survé.

Each year Davos wres­tles with a set of dif­fer­ent is­sues. This year is no dif­fer­ent with a num­ber of key themes meant to drive the con­ver­sa­tion – the Fourth In­dus­trial Rev­o­lu­tion; Re­spon­sive and Re­spon­si­ble Lead­er­ship, Global Col­lab­o­ra­tion; Build­ing Pos­i­tive Iden­ti­ties, Fix­ing Mar­ket Cap­i­tal­ism and Restor­ing Eco­nomic Growth.

In this wide-rang­ing in­ter­view with Busi­ness Re­port, Dr Survé out­lines the eight top of mind is­sues that the Sekun­jalo Group of Com­pa­nies takes to Davos this year: 1. Shoring up For­eign Di­rect In­vest­ment in SA FOR­EIGN di­rect in­vest­ment (FDI) is what will make the big­gest im­pact on our eco­nomic for­tunes and at­tend­ing WEF gives South African busi­ness lead­ers the op­por­tu­nity to cam­paign for this.

In the 10 years that I have been at­tend­ing WEF, I have re­lent­lessly pur­sued the story of a coun­try that is worth in­vest­ing in.

Go­ing to Davos gives us a unique op­por­tu­nity to tap in­vestors, change the nar­ra­tive about South Africa and po­si­tion the coun­try as a good in­vest­ment op­por­tu­nity. It is FDI that will lead to job cre­ation, stim­u­late the econ­omy and build our cities.

The an­nual growth in real FDI is less than 2 per­cent. For­eign port­fo­lio in­vest­ments have grown sub­stan­tially by more than 6per­cent per an­num over the last decade.

Most other emerg­ing economies ex­pe­ri­enced the op­po­site, with FDI out­grow­ing port­fo­lio in­vest­ments. In or­der to reach the goals of the Na­tional Devel­op­ment Plan 2030 (NDP); South Africa will have to at­tract FDI of at least 6 per­cent an­nu­ally to achieve a sus­tain­able eco­nomic growth rate of the tar­geted 7 per­cent per an­num, and to re­duce the em­ploy­ment rate to at least 12 per­cent from the cur­rent 26.5 per­cent. 2. SA Un­lim­ited Unit­ing the South African busi­ness com­mu­nity be­hind a pos­i­tive story of South Africa as an at­trac­tive in­vest­ment op­por­tu­nity.

The po­si­tion­ing of South Africa as a risk – and a global nar­ra­tive of a coun­try floun­der­ing un­der a cor­rupt govern­ment, not helped by a scan­dalous Time Mag­a­zine ar­ti­cle im­prob­a­bly list­ing South Africa as one of the top 10 risks to the world this year – has to be shifted.

Busi­ness lead­ers at­tend­ing Davos have to sing from the same hymn sheet – that of a South Africa that is pos­i­tive about its fu­ture, fo­cused on growth and devel­op­ment and try­ing to steer a new course af­ter decades of dis­en­fran­chise­ment.

The story of South Africa that we tell at Davos must be one of this coun­try be­ing one of the lead­ing fi­nan­cial hubs in the emerg­ing mar­ket sphere, with one of the best and so­phis­ti­cated bank­ing sys­tems in the world.

South Africa of­fers world class tourism des­ti­na­tions, a grow­ing young pop­u­la­tion, vast amounts of scarce mineral re­sources such as plat­inum, pal­la­dium, iron ore, as well as a lo­gis­ti­cal net­work sup­port­ing trade to Africa and the rest of the world, with ports, air­ports and main road in­fra­struc­ture and lo­gis­ti­cal ware­hous­ing.

The other story that we have to unite be­hind at Davos is that Africa is be­ing ear­marked as the fastest po­ten­tial eco­nomic growth con­ti­nent, and econ­o­mists pre­dict that Africa could sur­pass China with a growth rate be­yond 7per­cent in the next decade. Africa’s gross do­mes­tic prod­uct growth for this year is pre­dicted at 4.5 per­cent, the US at 3per­cent and Europe even lower. 3. Re­spon­si­ble lead­er­ship Do­ing good busi­ness through re­spon­sive and re­spon­si­ble busi­ness lead­er­ship. African phi­lan­thropy is noth­ing more than bring­ing the pri­vate and public sec­tor to­gether to pool re­sources; we need to in­cen­tivise and un­lock public in­vest­ment en­sur­ing sys­temic re­form and long-term sus­tain­abil­ity.

To have the great­est im­pact, we also need to build govern­ment ca­pac­ity and shape stronger na­tional sys­tems that can sus­tain progress. Moral im­per­a­tive is not enough. With­out ro­bust sys­tems and govern­ment com­mit­ments, we are in dan­ger of just fund­ing an ide­ol­ogy. 4. In­clu­sive vi­sion

En­gag­ing in the con­ver­sa­tion on how to beat back pop­ulism, pro­tec­tion­ism and na­tivism by con­struct­ing a pos­i­tive, in­clu­sive and plu­ral vi­sion of the fu­ture. Pop­ulism thrives on an op­po­si­tion to di­ver­sity and a re­jec­tion of the so-called es­tab­lish­ment. The real dan­ger for South Africa at the mo­ment is rid­ing the pop­ulism wave on the back of the cam­paign against cor­rup­tion as a mask to un­seat a demo­crat­i­cally elected govern­ment.

Unit­ing dis­crete and even op­pos­ing po­lit­i­cal structures be­hind pop­ulist cam­paigns is what gave US Pres­i­dent-elect Don­ald Trump the keys to the White House.

“With the rise of pop­ulism, pro­tec­tion­ism, and na­tivism, the world has come to a his­toric cross­road where one road leads to war, poverty, con­fronta­tion and dom­i­na­tion while the other road leads to peace, devel­op­ment, co-op­er­a­tion and win-win so­lu­tions,” Jiang Jian­guo, the head of the State Coun­cil In­for­ma­tion Of­fice said ahead of Pres­i­dent Xi Jin­ping visit to Switzer­land and his first WEF at­ten­dance. 5. Cre­at­ing jobs

Ad­dress­ing ris­ing in­come in­equal­ity through job cre­ation.

Job growth in South Africa has stalled. The re­spon­si­bil­ity is not only that of govern­ment. In­deed, the re­spon­si­bil­ity rests with the busi­ness com­mu­nity in its smart and pru­dent choices to stim­u­late the econ­omy and un­lock jobs. The only way to cre­ate sus­tain­able eco­nomic growth and job cre­ation is to at­tract sus­tain­able di­rect for­eign in­vest­ment in in­dus­tries such as the au­to­mo­tive, ben­e­fi­ci­a­tion of min­er­als, agri-pro­ces­sion, black in­dus­tri­al­i­sa­tion, al­ter­na­tive en­ergy, in­fra- struc­ture and lo­gis­tics and telecom­mu­ni­ca­tion sec­tors. 6. Un­der­stand the power of tech­nol­ogy Un­der­stand­ing the ad­vance­ments in tech­nol­ogy – robots, ar­ti­fi­cial in­tel­li­gence and other de­vel­op­ments – the im­pact of this on the econ­omy and growth and devel­op­ment of our coun­try and our re­sponses as busi­ness lead­ers.

There is no beat­ing back the rapid ad­vance­ments of our age.

The Fourth In­dus­trial Rev­o­lu­tion will not be held back be­cause we fear job losses. Rather the im­per­a­tive is for us as busi­ness lead­ers to look at how tech­nol­ogy can be man­aged to grow jobs and the econ­omy.

The 2017 Global Risk Re­port from the WEF names ar­ti­fi­cial in­tel­li­gence and ro­bot­ics as the tech­nolo­gies with the great­est po­ten­tial for both pos­i­tive and neg­a­tive con­se­quences, in­clud­ing ex­ac­er­bat­ing the threat posed by hack­ing. With­out ef­fec­tive gov­er­nance and re­train­ing of work­ers, tech­nol­ogy may de­stroy more jobs than it cre­ates at a time when cash­strapped gov­ern­ments can no longer af­ford his­tor­i­cal lev­els of wel­fare. 7. Do­mes­tic Fo­cus

En­gag­ing on the emerg­ing de­bate on city­ness ver­sus na­tion states as a re­sponse to the grow­ing global anx­i­ety about glob­al­i­sa­tion, pop­ulism and ex­clu­sion­ary poli­cies of new world lead­ers such as Don­ald Trump. Ben­jamin Bar­ber, the ar­chi­tect of the Global Par­lia­ment of May­ors, sees na­tions as “parochial and nar­row-minded”.

“They are ad­ver­saries of change and progress – while cities are con­ser­va­tors of mul­ti­cul­tur­al­ism, tol­er­ance and open so­ci­ety,” he says.

What this means for us is a re­newed fo­cus on build­ing our cities, our city iden­ti­ties and de­liv­ery of in­fra­struc­ture and ser­vices to our cit­i­zens at lo­cal level.

Bar­ber is quoted in an­other think piece ahead of Davos, “Pop­ulism is Poi­son. Plu­ral cities are the antidote” by Robert Mug­gah and Misha Glenny. 8. Re­alise the im­pact of glob­al­i­sa­tion

Fo­cus on in­fra­struc­ture (broad­band and trans­port); ed­u­ca­tion; em­pow­er­ing lo­cal govern­ment; and grow­ing public sec­tor in­vest­ment. In her ex­cel­lent pa­per ahead of Davos, Diane Coyle, Pro­fes­sor Eco­nomics at the Univer­sity of Manch­ester sets a frame­work for what needs to be done to ad­dress the re­al­ity of peo­ple feel­ing they have been left be­hind by glob­al­i­sa­tion.

The antidote, she says, to the global anx­i­eties about glob­al­i­sa­tion lies in tak­ing re­gional pol­icy more se­ri­ously by fo­cus­ing on in­fra­struc­ture, ed­u­ca­tion and strength­en­ing lo­cal govern­ment. Peo­ple’s fears and un­hap­pi­ness are vis­cer­ally at­tached to what they do not have and a re­sponse to this can only be done at lo­cal level.

The more city gov­ern­ments help peo­ple ac­cess jobs and op­por­tu­nity, the more we ed­u­cate young peo­ple for the jobs of the fu­ture and the more we en­cour­age public sec­tor in­vest­ment on grow­ing lo­cal economies and ac­cess to op­por­tu­ni­ties, the more we beat back the ris­ing tide of global anx­i­ety.

In­de­pen­dent Me­dia’s Ex­ec­tive Chair­man Dr Iqbal Surve.

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