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Publication

THE STAR - BUSINESS REPORT

Page

14

Date

Wed 06 Sep 2017

AVE (ZAR)

61454.15

How SA businesscan help govt fix economyA STRATEGYFORCHANGE

ProfSteveFriedmanHAT BUSINESS is willingto say to itself is as im-portant as what it says tothe government. Which iswhy the document, a con-

tract with society, released by an organi-sation representing big business, BusinessLeadership SA's Contract with South Af-rica may be setting a new tone not only onhow business deals with the government,but also how major economic actors dealwith the economy 's problems.

When most commentat ors are asked howSouth African business should respond togovernment, the common response is thatit should complain, loudly and in pub-lic. This view has no doubt firmed sincethe March cabinet reshuffle damaged theeconomy and denouncing "white monopolycapital" became a refrain of the ANC'spatronage faction.

Business, as the argument goes, shouldstand up for itself, even if that meansoffending government. But, while thisapproach makes great headlines and makesmany people feel better, it does little ornothing to advance business interests orfix the economy.

Those who want business to shout atgovernment seem to assume that this coun-try has no history. But it does, and it is ahistory in which business is associated- and not only in the minds of patronagepoliticians - with the minority privilegewhich apartheid ensured.

Yelling not helpfulNo one would use the phrase "white mon-opoly capital" if it did not seem to describethe world in which many black businessand professional people feel that they live.This makes the relationship between busi-ness and government more difficult thanin most other countries. It also meansthat politicians cannot afford to be seento be ordered about by business. After all,what better way to confirm that "whitemonopoly capital" rules us all than toinsist that business people tell politiciansoff in public?

Yelling at government is not helpful

Conversation between government and businesswas beginning to blossomduring the later days of former finance minister PravinGordhan and his deputy Mcebisi Jonas.

to the economy, because it keeps alivethe myth that its difficulties are causedby government alone. But, as very main-stream figures such as International Mon-etary Fund deputy MD David Lipton havepointed out, the fault is not government'salone. Other economic actors, includingbusiness, have also contributed to theproblem.

If businesses want a healthier economy,they need to look at what they can changeas well as what the government can fix.This will undermine the "white monopolycapital" claim by showing that businessesare willing to change what they do as wellas asking the government and other inter-ests to change.

This is precisely what Business Leader-ship SA's contract seeks to do. It feels asstrongly about the "white monopoly cap-ital" slur as others. It's chief executive offi-cer, Bonang Mohale, said at the contract'slaunch that it hoped to undo the legacy"of the ugly and deceitful white monopolycapital campaign (which) sought to blamebusiness for all the problems that besetthis country".

He said the campaign was "dishonest";it "tried to deflect from the real issues ofstate capture". It had severely damagedbusiness' s reputation.

Thisistheessentialroutetochange,becausenoneoftheeconomicinterestsarestrongenoughtoimposetheirfavouredsolutionontheothers.

All of this is music to the ears of the"give government a proper scolding"school. The key difference is that theorganisation seeks to counter the campaignnot simply by denouncing it, but by tak-ing responsibility for fixing the problems

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which made the campaign possible in thefirst place.

The contract recognises that corruptionis a two-way process. It vows to root out cor-ruption in the private sector too and wantscompanies to sign an integrity pledge, tofight corruption.

It also commits to fighting economicexclusion by creating jobs, encouragingand empowering senior black leadership,building skills, investing in communitiesand suppor ting small businesses.

Only after making these commitmentsdoes the organisation 's document say some-thing about government. It says it cannotachieve these goals on its own.

The government "must also step up"and create the conditions necessar y for thecountry and economy to succeed.

This approach is more likely to dispelthe "white monopoly capital" campaignthan one which yells at the government.

While those who coined the slogan willnot be impressed, it's not them to whombusinesses are talking.

Their audience is the tens of thousandsof South Africans who have no axe to grind,

but want the economy to offer oppor tun-ities to more people.

The contract recognises the problemthat undermines the image of large busi-nesses as arrogant vehicles of power.

By showing that they are sensitive toeconomic exclusion and those who suffer, itoffers to do something to solve the problem.

Conversationis the keyThe document also creates oppor tunitiesfor mending the economy by opening theway to a bargain between government,business and other economic interests.This is the essential route to change, be-cause none of the economic interests arestrong enough to impose their favouredsolution on the others.

By spelling out in broad terms a will-ingness to change, the contract enablespoliticians and government officials whodo want to negotiate change to begin adiscussion on the specifics.

This promises to restar t the conversa-tion between the government and business,which was beginning to blossom duringthe later days of Pravin Gordhan (formerfinance minister) and Mcebisi Jonas (for-mer deputy finance minister) at NationalTreasury.

It also makes negotiation possible bytaking the three steps all the parties needto take to create a negotiation climate: itacknowledges that the economy needs tochange, spells out what business is willingto do to change it, and what it expects inreturn.

This opens the way for the other partiesto do the same -if they do, the negotiationswill have effectively begun and a way outof the economy 's dead end will be possible.

Business Leadership SA's contract ishardly guaranteed to succeed.

In the past, initiatives which dependedon business and other economic interestsmaking changes ran aground, becausebusiness leaders, like the other negotiators,lacked the muscle to take those they repre-sent with them.

It is not at all clear how many businessesare willing to follow Business LeadershipSAs approach. Nor is it clear if the gov-ernment and labour, whose participationis crucial, are willing and able to respondwith their own bargaining positions.

What is clear is that the economy 'srevival depends on the business strategyfor change.

ProfessorSteve Friedman isdirector of the Centrefor the Studyof Democracyat the UniversityofJohannesbur g.