Savaged by a dead sheep
As the country’s financial system imploded last week, what did our business leaders do? They debated their “doubts”
When the country’s finance minister gets fired, and the JSE sheds a collective R169bn in 48 hours, you’d expect the nation’s business leadership to do more than simply “unfriend” Jacob Zuma on Facebook. Yet this is pretty much what happened on Sunday, when Business Leadership SA took out full page adverts in the press in which they waffled on about “tough challenges”, “policy responses” and even (don’t cringe now) wrung their hands over how we may have scored a few “own goals”.
Beneath all this fainthearted fretting, somewhere near the bottom, Business Leadership SA found the nous to say that replacing an “effective and trusted finance minister” has “raised doubts about our ability to maintain prudent macroeconomic policies”. Raised doubts? Really? Well, there didn’t seem to be much doubt in traders’ minds when they were shorting the living hell out of the rand last Thursday. Nor did investors seem to be on the fence when they were flogging shares in Sanlam (down 18%, or R22bn), FirstRand (down 21%, or R55bn) or Discovery (down 16,6% or R14,6bn) as if their Christmas bonuses depended on it.
Now Business Leadership SA is headed by some formidable businessman, including Bobby Godsell, Saki Macozoma and Jacko Maree. But theirs was such a yellow-bellied “statement” that you can bet your bottom dollar it wasn’t the tut-tutting of the country’s “business leadership” that led Zuma to backtrack and replace the unknown David “Des” van Rooyen with the highly rated Pravin Gordhan late on Sunday.
They didn’t outright condemn the decision, they didn’t protest the decision or even demand an explanation from the president. Instead, they talked of “doubts”.
Remgro chairman Johann Rupert, when asked if this was the right response, responded that “business never stood up to anyone, including the Nats when they were in power”.
Unfortunately, this isn’t entirely out of character for Business Leadership SA either.
A few weeks ago, when universities were in flames amid calls for companies to step up and fund education, how did Business Leadership SA respond? It put out a statement that, brace yourself, called on its members “to reflect on and review their own substantial links to both our national universities and the students who study there”.
Thankfully, it seems that some other constituencies had more forthright discussions with Zuma in recent days.
Even his newest friends, the Chinese, can’t be well-pleased.
Back in 2008, the Industrial & Commercial Bank of China bought 20% of Standard Bank for $5,5bn — or R120/share.
After last week’s Zumainspired rout of the banking shares, Standard Bank’s stock fell 17% to R101,39 per share — a value plunge of R33,9bn in less than 48 hours.
When you factor in the kamikaze-plunge in the rand, it means the Chinese stake in Standard Bank was worth just $2,6bn on Friday. In other words, the Chinese have lost half their investment.
But fret not: Business Leadership SA said it will “continue its constructive engagement with government and other social stakeholders about how to get our economy on track”.
The phrasing evokes the sort of crusading zeal with which Thabo Mbeki tackled Zimbabwean president Robert Mugabe in the mid-2000s.
Business Leadership SA’s surefire strategy of “engagement” includes such sterling success stories as failing to push government hard enough to ensure the National Development Plan is implemented, or even getting our political leaders to clarify where the goalposts are on empowerment.
Of court, the organisation itself doesn’t much like being characterised as meek and servile. So perhaps then it should stop acting like it.