Potential to win trust and support bodes well for new leadership
• Ramaphosa’s election was a step in the right direction to uplifting SA
One of my grandmama’s favourite sayings was: “You need to be careful what you pray for, cause you just might get it.”
I don’t know whether Cyril Ramaphosa’s election as president of SA is what he prayed for, but whether he did or didn’t he’s got it.
The question facing him and the country is, now that he’s got it, what’s he going to do with it?
Another twist to that question folks have been asking me is Ramaphosa’s election good, bad, or irrelevant for SA? I believe that his election is a good thing. The main reason is the potential he has to restore a sense of trust in government.
If a leader is going to lead a country like SA, with its many challenges and possibilities, people need to be able to trust that the leadership is working for them and not themselves.
Restoring the people’s trust is critical.
Ramaphosa’s expressed commitment to clean up corruption is an important first step. But it is not enough to talk the talk, he has to walk the walk. Because he was a successful businessman and has no need to enrich himself, he has a level of credibility on this issue. I would add that the credibility factor is helped by the fact that he was a protégé of Nelson Mandela.
At the end of the day, though, what he does is going to matter more than who he is. Credibility is so important because it is going to take a concerted effort by all South Africans to right the ship of state. There is no silver bullet. There is no quick fix to getting it right. Public and private sector leaders, as well as the people at large, need to know they can believe in the man, to believe in the plan to address the short and long-term needs required to fix the nation’s problems.
Since 1994 SA has made considerable progress in making the country and economy more inclusive.
On the political level the change is obvious. Relative to the economy the changes have been no less dramatic.
With the new dispensation, the numbers of those gainfully employed has risen from 8.9million to over 16-million people. The number of those counted in the middle class has increased from 1.7-million to more than 6-million people.
However, 55% of South Africans continue to be mired in poverty. Translated, that means the glass is either half full or half empty, depending on where you stand or whom you trust.
Trust is important. It makes a difference whether people think the glass is half empty or half full. If they believe it is half full they will work with the leadership rather than against them. If they believe the glass is half empty they will give leaders time to make the changes that are required.
If they believe the glass is half full one generation can be convinced to sacrifice immediate material gain to build a foundation on which future generations can prosper.
It is impossible to get to the point where the country’s “cup runneth over” any time soon. To get the cup three quarters full is going to take time, but it is doable. It can be done if there is trust between the leadership and the people.
Ramaphosa has the potential to restore that bond. If there is trust in the man, the issue then comes down to the plan. The 10-point plan Ramaphosa laid out at the ANC’s December conference was quite promising. In his speech Ramaphosa hit a lot of the right notes. This is the second reason I think his election is good.
As he pointed out, progrowth macroeconomic policies are critical, as are policies that focus on expanding the country’s manufacturing capacity, infrastructure and education, with the obvious commitment to moving the black majority from the margins to the mainstream of the country’s economy.
To maintain the mandate to lead, the bigger question is how he prioritises what he does in the short and long term. From a policy perspective, the first point of focus needs to be jobs for the masses on the margins.
In the short term, there are some things that can be done to spur increased employment. The internship idea is one. It enables young people to gain valuable work experience and skills, while putting some money in their pockets and more money into the economy. Beyond that, the question is how does SA create long term employment opportunities.
The manufacturing sector is one place to look. To compete in this arena means making more products more cheaply.
One of the ways to reduce costs is lower wages. All of the well-meaning people calling for a massive up-tick of high wage jobs for workers who are primarily unskilled or low skilled, uneducated or undereducated are being unrealistic. Given the country now has a president in which it can believe, it is time for a “Come to Jesus” moment.
Japan, China, Mauritius and every other country that has had to build the nation and economy from the dregs have done so in the same way. They first grew economic capacity so they could produce more goods for less money, and the key to that was lower wages.
Using the potential competitive advantage low wages provide is key to SA’s quest to add more jobs. Does that mean the goal of the government or industry should be sweatshops or have low wages in perpetuity? No. But that is the way every other country has achieved middle class status, and it will be no different for SA.
The sooner this reality is accepted the sooner policies can be put in place to provide some relief. Any other expectation is a pipe dream or a deception that will make the country ungovernable.
If that is what Ramaphosa meant by saying that the government can ill afford to “take refuge in populist slogans and impractical promises”, he was spot on.
Other short term, and immediate, measures should include encouraging greater investment of home grown capital in the South African economy. Forty percent of Africa’s wealth gets transferred outside the continent. That translates to $1.4-trillion. The percentage is probably similar for SA. Capturing that capital is key to growing the South African economy.
Another short-term goal for SA must be cleaning up waste and incompetence.
Billions of rand get wasted annually and the effect means less economic growth. To counter this means doing away with crony capitalism.
Contracts must be given to companies because they can deliver. Leaders and workers must be hired because of what they know rather than who they know.
Finally, Ramaphosa must get all “tribes” on the same page.
Zulus, Xhosas, Afrikaners, Asians and coloureds and all of the other tribes in this village, have to work together to fix what ails the country.
This is critical to stability and investment in SA.
If these varying constituencies see themselves as competitors rather than comrades it will be a problem politically and, as important, economically. Much of the wealth of the country is concentrated in the hands of whites and Asians.
If they don’t see themselves as part of the solution to what ails the country, they will continue to be seen as a part of the problem.
While there are no quick fixes, the laundry list of things that been covered can have an immediate impact.
There are also things that must be done that are more long term in nature.
On the long-term list are things like: more education and training, intra-continental and foreign direct investment, infrastructure development, and the free flow of goods, services, and talent throughout the continent.
On this last point, there are 16 African countries with similar regulatory regimes and economies as SA. They represent a potential common market of 650-million people. Fully exploiting that market potential would accrue to every country’s benefit.
Given the time, I believe Ramaphosa can turn the page and help write a new chapter in SA’s story. He has the ability, and hopefully the goodwill, to usher in a new era of prosperity and stability that will provide a foundation upon which the country can build. If he is able to deliver that would indeed be the happy ending so many hope to see.