Swift action vital to save the economy, says Busa’s Cas Coovadia
Business urges Cyril to declare a crisis and whip cabinet into line
● Cas Coovadia, CEO of Business Unity SA (Busa), says the government has not treated the economic recovery plan presented to it by Business for SA (B4SA) a month ago “with the urgency and sense of crisis” the situation demands.
“We’ve indicated that the economy is in severe stress and if we don’t make the necessary interventions it can only get worse. We need to make those interventions now. We need to stop deluding ourselves that we have more time. We don’t.”
Business believes the B4SA plan is the only data- and fact-driven economic recovery plan on the table, says Coovadia.
“We say the potential is there to decrease unemployment to 15% and increase GDP to $550bn (R9.5-trillion) by 2030 if we implement what we suggest.”
Other plans on the table are the ANC’s economic development plan and a paper on economic strategy produced by finance minister Tito Mboweni a year ago.
Coovadia says they need to be examined by a small, high-level team from business, labour, government and civil society “sitting down and thrashing through these things and extracting what is relevant for economic growth”.
“Ninety percent of the stuff in the three plans we agree on, so that can be implemented.
“All of this needs to be done yesterday. We’ve been pushing for it. We don’t have any more time.”
But President Cyril Ramaphosa needs to give the word.
“The president needs to say we are in a situation of crisis, this is urgent.”
Coovadia agrees with Sandile Zungu, the president of the Black Business Council, which signed off on the B4SA plan, that business in SA has never been more united or in a better position to pressure the government to act.
Could business be using the leverage this gives it more effectively?
“I don’t think we should be conducting ourselves as business in a way that puts threats on the table,” Coovadia says. “We need to impress upon government through fact-based work that we are in crisis, that this is urgent. And keep demonstrating what the implications are if government does not act on some of the things we’ve put on the table.”
In spite of the government ignoring the B4SA plan, he hails the formation of a Covid19 rapid response team with the government and labour as evidence that its interactions with the government have borne fruit.
“This collaboration has been very good in the interventions we’ve had to make to manage the impact of the crisis,” he says.
Pick n Pay chair Gareth Ackerman said last week there was little sign that the government had listened to or consulted business over its economically ruinous lockdown regulations.
“I would not disagree with him that it’s been extremely difficult to interact with government,” says Coovadia.
“We’ve had to push all the time. But when we talk about government we’re not talking about a monolith, we’re talking about a government that is not together on a lot of stuff, a cabinet that is not together on a lot of stuff.
“That’s why we’ve consistently been saying that the president needs to rise above the fray and show decisive leadership.”
He reacts angrily to suggestions that organised business, represented mainly by Busa, has demonstrated little effective leadership itself while the government has brought the economy to its knees.
“We have shown leadership.”
Is leadership just about submitting economic plans, or is it about making those plans happen?
“Leadership is not expecting that everything you want will happen tomorrow. That’s not leadership, that’s cloud cuckoo land,” he says. “Leadership includes being strategic and tactical in the interests of the country.”
Given its considerable muscle, couldn’t business have done more to prevent the economic calamity facing the country?
“Business has muscle, but we can’t change the politics or the laws, we can’t dictate how labour should conduct itself in the current environment. We can only talk to them and try to get on the same page.”
Business has had extensive bilateral engagements with the government, he says.
To little effect, given its destruction of the economy?
“We’ve struggled to make progress. We agreed with government on the initial level 5 lockdown and we’ve been interacting with them on opening up the economy since then.”
Indeed, B4SA insisted that the government move the country from level 4 to level 1 by the end of May, and seemed confident it would do so.
“With the exception of liquor and tobacco I think the economy has been substantially opened up,” says Coovadia.
“Has it been easy? Of course it hasn’t been easy. Have we put in our best effort to work with sections of government such as the presidency and cabinet? We have. Are there certain members of cabinet that have been more forthcoming in understanding that the economy needs to be opened up than others? There are.
“But we need to continue to push, and to impress on government that certain things need to be done and they need to be done urgently.
“History will judge us harshly if we don’t move with urgency.”
As far as getting the government to implement the economic recovery plans on the table is concerned, the options for business seem to be limited to presenting its own plan to foreign embassies “so that when the embassies talk to government they will ask government why there isn’t more movement on this”.
Why is labour so much better at bending the government to its will — in spite of a 40% unemployment rate — than the united voice of business?
“Labour can threaten to go on strike if things don’t go their way. This is not an option for business.”
All business can do is engage with stakeholders, “which we have not done effectively in the past but are doing now”, and “continually impress upon the president that we’re at the T-junction where the wrong choice takes us to a failed state”.
Meanwhile, “we are trying to keep the economy chugging along”.
Without the right structural, regulatory and legislative changes there’s a limit to how much more business can do, he says.
“There are fundamental levers the government needs to pull or things don’t happen. You don’t want a situation where business says to hell with government and just goes ahead and adopts a laissez-faire attitude.
“That doesn't work. We’ve seen that in Lebanon.”
We’re at the T-junction where the wrong choice takes us to a failed state
Cas Coovadia
CEO
Business Unity SA