Emergency plan still required

Eleven weeks ago, this column argued for an emergency national response in tackling the plethora of our country’s pressing problems and challenges.

The reasons for this are self-explanatory – the structural nature of the challenges at hand inevitably require coordination, a consciously organising hand and an integrated, purposeful direction.

Moreover, no social institution, acting on its own, will be able to resolve the enormity of what requires untangling, especially under the current social, political and economic climate.

This much seems innocuous and hardly provokes disagreement from many, and especially serious quarters.

In fact, one finds references to a common national response in many public pronouncements by political, business and labour leaders; and the National Economic Development and Labour Council (Nedlac) is arguably a vehicle for a degree of socio-economic codetermination.

Of concern is that despite the rhetoric, the available institutional framework such as Nedlac and a broad national consensus for the country to move away from the self-negating path of the last decade, there is little sign that the social partners are at one with respect to the nature, enormity and potentially disastrous consequences of the country’s problems; which would inspire conception and implementation of an emergency national response.

What is more, some in politics speak as if objectives, however noble, can be willed into existence by dint of statements that are supposed to have the magic to leapfrog the country from the present to an utopian world of milk and honey.

This lends credence to a view that, as with much of the post-colonial African experience, politics might be part of the problem, rather than serving as a mobilising factor in search for solutions.

Additionally, there is vital need for a frank discussion about the reasons for inadequate levels of investment by business in the past 25 years.

Attached to this discussion is whether South African business understands, or believes, that democracy is in its interest and, if so, whether it has posed the question: how do we support democracy?

None other than the muchmaligned businessperson, Johann Rupert, attempted to open this discussion in December last year when he pointed out that business had failed satisfactorily to invest in the economy during the Thabo Mbeki era. Mbeki, he said, “created a perfect scenario for business to invest, but I think we couldn’t believe our luck and we should have invested more”.

As usual, the anti-Rupert machine – which is, frankly speaking, pointless and counterproductive – swung into overdrive and failed to appreciate that, implicit in his remarks, were vital questions that must still be answered because the answers – or nonresponses – would help us to understand the complexity of our situation.

Why did business fail to invest adequately in a political context in which Mbeki’s detractors sought and successfully caricatured him as a Thatcherite, slavishly doing its bidding?

Do the answers lie in economics or elsewhere? We will never know until we summon enough strength for frank discussion, which also means that the political class had better understand that business cannot be a social partner – a strategic one, if one might add – in the boardroom and an ogre in the political and public discourse spaces.

Currently, South African corporates have more than R4 trillion of investible cash at their disposal, which is not being invested in the economy. This is despite the fact that we have had, for a considerable period of time, a low-interest-rate environment.

Add to this, growing levels of the externalisation of funds by legal and illicit means and the picture is more worrisome.

While the last decade provided perfect excuses for lack of investment in the economy, those arguments cannot be advanced today because, imperfect as it is, the situation is somewhat different.

Why is business not investing in the economy under a president whose curriculum vitae also includes a stint in business? How conducive is a conducive investment environment and will there ever be one, at least insofar as South African business is concerned? Recently, former Public Investment Corporation chief executive officer Elias Masilela warned that “the country will burn because of a lack of investment in development projects” and called on business to play a leading role in breathing life into the economy. The point hardly requires emphasis that the flaring-up of the country, for whatever reason, would not be in the interest of any sector and stratum of society.

Masilela adds that “the South African private sector needs to understand they should not invest for narrow profit only, but for broader economic gain”.

And “what they do has to have a broader impact than just influencing the bottom line. The investments have to be visible so that the poor understand that they’re not just being made to benefit the owners of capital, but to benefit them, as well”. His remarks underscore the question whether South African business considers democracy to be in its interest. If so, whether it shoul dbe infused with a social content to guarantee its sustainability.

Other jurisdictions seem to exude a more nuanced appreciation of these questions and the multiple issues that attach to it.

Nearly 30 years ago, the former chair of the Australian Western Mining Corporation, Sir Arvi Parbo, stated that “performance [in dealing with the social and political environment] must have increasing weight in the way in which managers are recruited, trained, evaluated and rewarded, because of the critical nature of these issues to the success of our enterprise. We can do our sums, be great at production and marketing, fine-tune our cash flows – we can do all those things well, but fail badly if we haven’t managed the social and political issues.”

The dexterity to which Parbo referred will grow in scope for business and political leaders alike as the negative effects of the Fourth Industrial Revolution – especially its displacement of people from employment – asserts itself in an already unequal society.

All the more reason why we should insist on a genuine national response to our social problems, which made-for-media public relation exercises will not solve.

There is a vital need for a frank discussion