Business and state need to forge a shared view
This week’s 10th Brics Summit, hosted by President Cyril Ramaphosa, took place at a crucial moment in global geoeconomic, geopolitical and geostrategic affairs. The global trade war unleashed by US President Donald Trump has a direct impact on all the Brics nations.
The summit was a crucial strategic moment for Ramaphosa as he seeks to consolidate his home base and deliver on his $100-billion (R1.3-trillion) target of investment over five years.
The local economy received a huge boost from $1-billion in investment by the New Development Bank and about $15-billion from China alone. This was after recent $20-billion investment commitments from Ramaphosa’s expedition to Saudi Arabia and the United Arab Emirates.
But more needs to be done by more roleplayers to drive inclusive, job-rich growth. There are things the president and things business leaders must do.
There are three key things that Ramaphosa must to do to reset the economic growth trajectory. First, business and the ratings agencies have raised the issues of boosting investor confidence and growth-enhancing structural reforms. Let’s commend the work started after the Nasrec conference. But more must be done to accelerate the process, especially by ensuring we have fit-for-purpose stateowned enterprises. Most of their problems seem to be self-inflicted and linked to our tolerance of mediocrity and corruption, and lack of a culture of high performance, accountability and consequence management. Changing all this requires decisive leadership underpinned by shareholder support.
Second, the management of land expropriation without compensation requires the attention of Ramaphosa and his ANC colleagues. Investors’ concerns cannot be dismissed. The merits of redistribution to correct historical imbalances are not in question. The big issue is how.
Third, mining remains a key, although declining, part of the economy with its farreaching links to other crucial sectors. The need for policy certainty and predictability cannot be overemphasised. Delays in finalising the Mining Charter are unhelpful. What are the three key things local business must do? First, it has a huge role to play by investing in the local economy. If it does not walk the investment talk, why should foreign investors? The silent investment strike must end.
Second, business must make its expertise available to build capacity in government. South Africa has most of the skills to solve most of its problems. There is a need for collaboration across the public and private sectors to find lasting solutions.
Third, business needs to actively engage with the policymaking space to advance its agenda and that of an inclusive, prosperous society. The challenge is that business is perceived to be in permanent opposition to government initiatives, especially those that promote transformation.
Labour has a crucial role to play by embracing the productivity and global competitiveness of local companies and avoiding making crippling wage demands.
The 24 years of a nonracial democratic South Africa should be sufficient for a shared view of the transformation project among government, business and labour. That we do not have a shared view of this project is an indictment of the leadership of the political, labour and business elite.
Countries that lack a common purpose and destiny fall behind in the global competitive battles. We dare not.