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Opinions: Business needs to stand up on SA’s ideological pathologies

DAILY FRIEND / 14 AUGUST 2020 - 05.30 / TERENCE CORRIGAN

With South Africa now at a point of crisis – or, better understood, the intersection of multiple crises – the recovery plan proposed by Business for South Africa (B4SA) is heartily to be welcomed.

This is not just because we require frank and well-informed discussion about how to escape the current impasse, but because an economic strategy that revolves around a wealth-creating private sector is simply infinitely more credible than one built around our compromised state.

That said, for its own sake and for that of the country, it is to be hoped that B4SA has not spoken the last word on its plan.

To be sure, the strategy has had its detractors. For example, director of the Centre for Development and Enterprise Ann Bernstein wrote in a recent contribution that the plan seemed to assume competent governance – the ‘will and the capacity to do the right things’. She likened the situation rather to an ocean liner whose passengers are dissatisfied by a range of issues, but failing adequately to acknowledge a looming hurricane.

Here she is correct, and the hurricane itself has a name: ideology.

When the pandemic hit, there was a widespread assumption that Covid-19 would not only bolster the presumed reformist impulses of President Cyril Ramaphosa, but would make reform inevitable. Months later, there is little to support this.

Nothing illustrates this quite as vividly as the decision to hang on to South African Airways in the face of its disastrous record over the past few years, the dire fiscal picture and the state of aviation worldwide. Unfortunately, this is a relatively minor part of the problem.

As business took a hammering from the pandemic and the lockdown, the tourism department announced that BEE would be used to apportion relief. As a general principle, Ramaphosa said that the pandemic provided an impetus to ramp up empowerment demands. ‘The Broad-Based Black Economic Empowerment policy thrust of this government, if anything, needs to be enhanced,’ he told Parliament in June.

More rigid racial prescriptions

To complement this, it remains government’s intention to impose more rigid racial prescriptions on firms’ workforces, as was proposed last year.

Property rights remain under threat, with the expropriation without compensation drive still being central to government policy. The committee to change the Constitution was recently reconvened.

And the politicisation of the civil service through the ruling party’s cadre deployment policy is to remain in place. There is no consolation in the comment from the Minister for Cooperative Governance and Traditional Affairs, Nkosazana Dlamini-Zuma, that the stress must be on the ‘right cadres’; we’ve heard this before, and it offers no escape from the fundamental perversion of constitutional governance and professional administration that cadre deployment entails.

All of this reflects deeply held ideological commitments. And until they are dealt with – properly and thoroughly – South Africa will not be able to make the economic ascent that the country so desperately needs.

Which is where B4SA’s approach falls short.

It recognises in broad terms the problems that each of these issues – BEE, the threat to property rights, poor governance – pose, but skirts the phenomena that have produced and driven them. And it avoids coming out clearly about any demands, or even firm preferences.

Bland generalities

Instead, it defaults to broad and bland generalities about ‘certainty’, ‘clarity’, ‘resolution’ and ‘review’.

Such is the call in the document in respect of both property rights and empowerment. Investment would be promoted ‘if property rights can be absolutely clear and backed by legislation and institutions’.

But this leaves a wide berth for interpretation. ‘Certainty’ can take many forms – including confirming a bad or destructive decision. While certainty on policy positions can help business in planning its operations in an economy, it may also warn it off.

Shortly before the pandemic, the African National Congress (ANC) indicated that it wished to amend the Constitution to place decisions around compensation in the hands of the executive as opposed to the courts. ‘Certainty’ about this would hardly be encouraging for business or investment.

Similarly, on BEE, the document suggests a ‘review of the efficacy of existing regulation and policies in achieving sustainable economic transformation and B-BBEE’. So should BEE in its current form remain or be abolished? Is the overall framework to be kept, but the specifics simplified? It’s not clear.

In both cases, business would presumably want good policy, and not just ‘certainty’. But just what it thinks that policy would look like is far from clear.

Cadre deployment

And on improved administration, issues like cadre deployment are not mentioned in the document at all.

Business does itself no credit by avoiding these issues. Nor will it forge the operating environment that it – and the country – needs by doing so. ‘If we’re going to have cowards in business, we’re not going to get very far either. You must have that counterweight if you want progress,’ former finance minister Trevor Manuel said in frustration at the deferential attitude of business.

What confronts South Africa will not be fixed purely by offering technical solutions or by hoping that some sort of deal can be struck down the line. It is the product of a worldview, and must be understood as such.

Business needs to realise this and take a stand on it, now.

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Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER

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