AHEAD of this week’s World Economic Forum (WEF) in Davos, President Jacob Zuma and four Cabinet ministers met the South Africans attending Davos, most of whom are CEs and directors of South Africa’s largest companies.
These gatherings have been happening for a few years now, led from business’s side by Business Leadership SA and Brand SA, and from the government’s side by the Treasury. On the face of it, the aim is to get South Africa’s delegation together informally so that the government and business can work together to fly the flag in Switzerland — even if they disagree at home.
Davos is no place to air the domestic dirty linen, and business and the government have cause to try to repair the damage done in the past couple of years to international investor perceptions. But these meetings are really less about Davos than about South Africa. The WEF excursion is a good excuse for the government and business to meet in a neutral environment that doesn’t pretend to be representative (and so avoids the issues of who should or shouldn’t be there) but requires them to work together on the practical tasks of preparing for South Africa’s presence at the WEF.
That probably has more potential to build trust and open communication than do more formal talk-shops. But the government, which in the first couple of years of the Zuma administration had very little contact with big business, is now making some quiet but concerted efforts to build that relationship.
In addition to the WEF are two more formal processes — one in the mining industry, where business and the government have been meeting over the past 18 months to seek solutions to the industry’s woes, and the other a wider business-government lekgotla, which will happen again next month to discuss progress on five agreed areas of activity.
The shock of Marikana, and the damage it did to South Africa’s image, provided impetus. But it does seem to have struck the government lately just how much the "developmental state" needs business if it wants to deliver on all those promises of growth and jobs.
At last week’s meeting, Zuma sounded almost as if he had just realised that the state couldn’t do it all — or perhaps he was indicating to business that he has conceded (at last?) that it is important. The private sector accounted for 70% of South Africa’s economy, he noted — a surprise to him, perhaps, but surely not to them.
"Looking to the state only to create jobs as it happens in SA is a nonstarter," he said. Who knew? The business leaders in the room were certainly not under the illusion that the state was the economy’s primary job creator.
Zuma was clearly out to cosy up to business, though, and he did say some of the right things, calling for joint action to promote growth, and, importantly, saying the government’s particular role is "to create a conducive environment for growth".
An effort to partner with business is there, too, in the nuances of the African National Congress’s election manifesto, which, again, emphasises that the private sector is 70% of the economy and calls for the state to work in partnership with it (and everyone else) to create the conditions to accelerate growth and stimulate job creation.
The trouble is that it is not clear how many in the government really get what it takes to create the conditions that will lure business to invest and create jobs. And the language of the ruling party’s manifesto suggests why: it says things such as: "The private sector must actively contribute to inclusive growth, investment, social development and economic transformation."
Must? Why? Businesses make commercial decisions to invest or not, and to hire more labour or not, based on their calculations of the risks and the potential returns. Of course, if they take a longer-term view, they will want to contribute to an environment that will be good for doing business, so these are not just narrow commercial decisions. But they can’t just be instructed either. As one businessperson at the pre-Davos meeting put it, businesspeople don’t just wake up in the morning and decide it’s a good day to create jobs.
So the government should be asking business what must be done to make it attractive to create jobs. Equally, business should not be shy. It should be clear about what it wants: what the government must do to create the "conducive environment" Zuma promises — and it should take advantage of the forums that exist to convey that.
• Joffe is deputy editor.
A chalet stands in front of the Intercontinental Davos luxury hotel in the Swiss mountain resort of Davos in this December 16 2013 file photo. Picture: REUTERS
AHEAD of this week’s World Economic Forum (WEF) in Davos, President Jacob Zuma and four Cabinet ministers met the South Africans attending Davos, most of whom are CEs and directors of South Africa’s largest companies.
These gatherings have been happening for a few years now, led from business’s side by Business Leadership SA and Brand SA, and from the government’s side by the Treasury. On the face of it, the aim is to get South Africa’s delegation together informally so that the government and business can work together to fly the flag in Switzerland — even if they disagree at home.
Davos is no place to air the domestic dirty linen, and business and the government have cause to try to repair the damage done in the past couple of years to international investor perceptions. But these meetings are really less about Davos than about South Africa. The WEF excursion is a good excuse for the government and business to meet in a neutral environment that doesn’t pretend to be representative (and so avoids the issues of who should or shouldn’t be there) but requires them to work together on the practical tasks of preparing for South Africa’s presence at the WEF.
That probably has more potential to build trust and open communication than do more formal talk-shops. But the government, which in the first couple of years of the Zuma administration had very little contact with big business, is now making some quiet but concerted efforts to build that relationship.
In addition to the WEF are two more formal processes — one in the mining industry, where business and the government have been meeting over the past 18 months to seek solutions to the industry’s woes, and the other a wider business-government lekgotla, which will happen again next month to discuss progress on five agreed areas of activity.
The shock of Marikana, and the damage it did to South Africa’s image, provided impetus. But it does seem to have struck the government lately just how much the "developmental state" needs business if it wants to deliver on all those promises of growth and jobs.
At last week’s meeting, Zuma sounded almost as if he had just realised that the state couldn’t do it all — or perhaps he was indicating to business that he has conceded (at last?) that it is important. The private sector accounted for 70% of South Africa’s economy, he noted — a surprise to him, perhaps, but surely not to them.
"Looking to the state only to create jobs as it happens in SA is a nonstarter," he said. Who knew? The business leaders in the room were certainly not under the illusion that the state was the economy’s primary job creator.
Zuma was clearly out to cosy up to business, though, and he did say some of the right things, calling for joint action to promote growth, and, importantly, saying the government’s particular role is "to create a conducive environment for growth".
An effort to partner with business is there, too, in the nuances of the African National Congress’s election manifesto, which, again, emphasises that the private sector is 70% of the economy and calls for the state to work in partnership with it (and everyone else) to create the conditions to accelerate growth and stimulate job creation.
The trouble is that it is not clear how many in the government really get what it takes to create the conditions that will lure business to invest and create jobs. And the language of the ruling party’s manifesto suggests why: it says things such as: "The private sector must actively contribute to inclusive growth, investment, social development and economic transformation."
Must? Why? Businesses make commercial decisions to invest or not, and to hire more labour or not, based on their calculations of the risks and the potential returns. Of course, if they take a longer-term view, they will want to contribute to an environment that will be good for doing business, so these are not just narrow commercial decisions. But they can’t just be instructed either. As one businessperson at the pre-Davos meeting put it, businesspeople don’t just wake up in the morning and decide it’s a good day to create jobs.
So the government should be asking business what must be done to make it attractive to create jobs. Equally, business should not be shy. It should be clear about what it wants: what the government must do to create the "conducive environment" Zuma promises — and it should take advantage of the forums that exist to convey that.
• Joffe is deputy editor.
Change: -0.47%
Change: -0.57%
Change: -1.76%
Change: -0.34%
Change: 0.02%
Data supplied by Profile Data
Change: -1.49%
Change: -0.04%
Change: -0.47%
Change: 0.00%
Change: 0.08%
Data supplied by Profile Data
Change: 0.36%
Change: 0.61%
Change: 0.12%
Change: -0.29%
Change: 0.82%
Data supplied by Profile Data
Change: 0.31%
Change: -0.42%
Change: 0.33%
Change: -1.40%
Change: -0.96%
Data supplied by Profile Data