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SUMMIT TV: Tricky relationship between government and business

In this article

Hlengiwe Mkhize is deputy minister of economic development.

SUMMIT TV: Antagonism between business and the government has ratcheted up significantly over the past few days, with Anglo American Platinum announcing restructuring and the First National Bank ad campaign. In an interview with Business Day, you cited "business cynicism" as one of the reasons behind the strained business relationship. Why do you think business is cynical?

HLENGIWE MKHIZE: As you know I’m deputy minister of economic development and we are fully aware that there are quite a number of bottlenecks in the system in terms of achieving our objectives. Sometimes one gets the impression that when the government encounters difficulties, then there are those who say, "We will go to Australia or New Zealand or Mauritius." That’s cynical.

STV: If we look at the role of the private sector in South Africa’s economy and the Reserve Bank’s figures, it still accounts for about two-thirds of fixed capital formation. One can’t say the private sector is not investing in the country but it comes up against big challenges with the government. If I could use a specific example, the infrastructure development programme that Finance Minister Pravin Gordhan announced in numerous budgets over the past few years was R800bn and is now probably more than R1-trillion, but that’s just not coming through. So isn’t it to be expected that business feels a bit cynical when the intention is there but the work doesn’t come through?

HM: I think we have to go back to the president’s announcement in 2011 where he said a lot about partnerships between the government, labour and business. Exactly as you have articulated the scenario in terms of the economics of South Africa, if you were to address government we will tell you since Economic Development Minister Ebrahim Patel came out with the National Growth Path, 670,000 jobs have been created, and if you talk to the mining sector it’s the same thing. At the same time we remain highly unequal, so there are tensions and contradictions.

STV: What do you mean by unequal? Are you talking about society or about capacity in the private and government sector?

HM: When I say our society, if an investor looks at South Africa, we read the headlines and come out with the feeling that too many people are still excluded.

STV: I understand that is one of the many social problems that we have to address, but you talk about partnerships between the government and business, and for example we saw Gwede Mantashe saying Anglo American "stole our money", which is not the sort of thing one says in a partnership. It’s inflammatory. What do you make of a comment like that? Surely that does incredible damage to the relationship between business and the government?

HM: Wearing my government cap, I’m going to say our role in economic development is to really strengthen and deepen engagements between business and the government, and of course organised labour and civil society structures. It’s really a question of saying, how do we ensure that we all remain committed to achieve the set objectives? Take for instance the objective of 5-million jobs by 2020. If we do not stabilise the relationship, we are not going to achieve that. If we do, we are likely to surprise everybody and exceed expectations.

STV: Does that mean the government will have a word with Mr Mantashe and other members of the ANC to say, "You can’t actually say things like that. We are trying to create an enabling environment and we need to be on a better footing with one another"? Is that something you will address in the upcoming national executive committee meetings?

HM: I think he has to do what he is expected to do as a politician. As officials and the government we have to work harder in doing what we are expected to do to normalise the relationship and be accountable not only to the ruling party but also to the government and civil society. We all have different roles.

STV: Are you saying the government could do better?

HM: The government is working very hard. Look at the achievements so far and the commitment. With the infrastructure development plan that was announced some time ago, there we have a presidential infrastructure co-ordinating commission and already big projects have been announced and business is happy with that.

STV: That is a good point, but look at, for example, the experience of business in the most recent round of labour unrest where it seemed the government did not come to the aid of business, and where the relationship between business and labour broke down as in the farm workers’ strike in the Western Cape in the bargaining councils and with the wage agreements. Why did the government not come to the aid of business, saying to labour they needed to toe the line because wages had been agreed for the next year? Why was the government not more supportive of business?

HM: My understanding is that virtually all the ministers that were affected by the tensions we’ve seen in the mining sector and with labour have been working very hard talking to labour and trying to assist so that a solution is found as soon as possible. Remember when you intervene at a time where emotions are already high it becomes difficult for the dust to settle. That also raises the question of us showing our commitment to assisting the most vulnerable people in the system.

STV: I understand the government has to try to lift citizens out of poverty. Going back to the government wanting to create 5-million jobs by 2020, wouldn’t it be better to create an environment for businesses to create those jobs? Shouldn’t that be the government’s role? Rather than creating the jobs, the government creates a better environment where businesses can create the jobs that will lift people out of poverty?

HM: I think the government has to do all that, it has to stimulate in some instances. Without that, business people would just be cynical and look at their profits and so on. If and where the government has invested and assisted a community to buy land without business commitment, it has to ensure that it assists the beneficiaries all the way through. There is really cause for high-level commitments from all parties for us to succeed. That is our commitment.