Why business and the ANC fell out of love
Broken Trust | Former peacemaker says a relationship that once promised so much has foundered on distrust and ’real hostility’
Anyone who has studied history will know that economic transformation takes a long time
AS leader of the Consultative Business Movement in the early 1990s, Theuns Eloff played a key role in building trust between the ANC and the white business community.
That trust is now all but dead and buried, he says.
The organisation was the moving force behind the successful peace process that eventually led to the democratic elections in 1994. When the negotiations broke down after the Boipatong massacre, the organisation was quietly but decisively influential in getting them running again. In the new South Africa, it organised the first partnerships between business and the government through the National Business Initiative and the R1-billion Business Trust.
That was then. Now, ANC hostility towards business is at its worst since 1990, exemplified by the Employment Equity Amendment Act, which allows the government to enforce national racial demographics.
Eloff, 58, who has just announced his retirement as vice-chancellor of NorthWest University, concedes that if business had bought into economic transformation earlier and more wholeheartedly, the relationship might have been better.
But he blames the government for failing to provide a better framework for economic transformation.
If the government had policies that were more likely to increase job and wealth creation, it would have been easier for business to do more work on economic transformation.
The lack of transformation is more about government ideology than business reluctance, he believes.
And the government’s increasingly belligerent threats to punish business for noncompliance arise because the ANC is “bent on demographic representivity”.
“They want to change the economy so that it is in the hands of 79% of black South Africans, and they want to do it in a mechanistic way. Anyone who has studied history will know that economic transformation takes a long time. All that these laws will do is chase business away.”
Eloff, who won international praise for his role in facilitating transformation and was named by the World Economic Forum as one of “100 global leaders for tomorrow”, says he does not believe South Africa will go the way of Zimbabwe. But he sees ominous parallels.
“What the government is proposing is exactly the way Zimbabwe went over the past 10 years.”
He questions whether what the government wants is economic transfor- mation for the country as a whole, or enrichment for a privileged few.
“The agenda of this government is not economic transformation. Its agenda is to create benefits for a part of the population — the upper part, the middle class upwards. They can’t blame business for not having done enough to achieve economic transformation. Their policies have made it clear that this is not what they’re interested in.”
If the government had been more sincere about wanting economic transformation, it would have been easier for business to participate, Eloff says.
As it is, he believes business in South Africa has done more than business in most other parts of the world to help with transformation “in an active, meaningful way”.
There have been calls for an “economic Codesa”, but Eloff says: “The atmosphere is not conducive.”
The business leaders who would support it are not close enough to the government to make it happen. Those who are close to the government “probably would not want it because they’re cosy” with things as they are.
Both a cause and a symptom of the tension between business and the government since Jacob Zuma became president is that only a chosen few businessmen have access to him.
The Big Business Working Group that was started a year or so into the Thabo Mbeki presidency by Eloff and then-director-general in the presidency Frank Chikane was shelved along with Mbeki’s presidency.
“Working groups were what moved us forward, kept lines of communication open, offered a place where the real leaders could speak directly to each other. It doesn’t happen any more.
“Only a few of the business leaders of the biggest groups in the country have access to Zuma, and that’s because of their party political affiliation and not because they are senior leaders of the business community. Leaders of the big corporations don’t have the access they used to have.”
How and why did the trust forged between business and the government in the Mandela era give way to the hostile, anti-business attitude of the government today?
“Business in the Mandela period had a naive optimism that, with its help, things would come right quickly,” says Eloff. “When we started Business Against Crime, for example, the expectation was that it would last three years, by which time its job would be done and it would be disbanded.”
A combination of police arrogance and incompetence meant that business was expected to pour in money and resources indefinitely without any tangible impact on crime.
This started “the process of estrangement” that accelerated with Mbeki’s HIV/Aids policies, his cover up of arms deal corruption, cadre deployment, and so on.
The Mbeki government’s attitude that business should pay up but leave the implementation of joint projects to the government wrecked the projects, wasted vast amounts of private sector money and “began a process of withdrawal” by business.
“Business realised government didn’t have the capacity, but it hoped that through implementing these projects capacity would be built. But then the ANC started developing their cadre deployment policy and they brought literally useless people into areas of government.”
But the real hostility came with the Zuma administration.
“The fault line was the regime change in 2009. Until then there were some frustrations, but lines of communication were open and there was hope that things would turn for the better.”
Eloff believes there is a “fundamental lack of understanding in government of the way business works — that there are shareholders and there must be certainty”.
The incomprehension is partly owing to cadre deployment and the “poor quality” of ANC MPs in parliament, many of whom have never been to university.
“The result is you’ve got people in parliament who don’t understand the economy.”
This includes the cabinet — where the majority of ministers, he suspects, do not have a clue.
Finance Minister Pravin Gordhan does, of course, “but he fights a lonely battle”. And although Gordhan may be business-friendly and may even, as Eloff suspects, be in agreement with people like him, he cannot afford to say so too publicly.
But do not expect too much by way of heroics from business either, he says.
“Most business leaders just want to batten down the hatches and wait out the Zuma presidency.”