RELEASING the results of a ranking of SA’s cities last week, its promoters opted for the "You are all winners" approach that the teachers and coaches of small children adopt when they’re trying to make those who didn’t win the prize feel better.
The "Doing Business" ranking measures how each of the nine largest cities has done on five indicators, which measure how easy it is for a small-or medium-sized firm to get through red tape.
However, the World Bank and the Treasury, which conducted the research, did not publish an overall ranking for the cities, releasing only the rankings on each of the five indicators. One reason no doubt is that this is potentially a political minefield ahead of next year’s local government elections. You don’t have to be good at arithmetic, for example, to work out that Nelson Mandela Bay — the metro the Democratic Alliance (DA) most hopes to take from the African National Congress — definitely did not win the prize. Nor that DA-controlled Cape Town must be near the top of the table overall, while Johannesburg is quite close to the bottom.
That’s a problem, because the World Bank’s global "Doing Business" rankings, which use a similar methodology, measure SA’s largest business city — Johannesburg in our case. SA would do better on the global rankings if Cape Town or even Buffalo City were the chosen city. But there’s not much of an economy in Buffalo City. And these rankings don’t measure factors such as the size of the market or the investment climate.
They also focus on the regulatory environment for more entrepreneurial businesses, not necessarily on all the issues that affect larger corporations. But smaller businesses provide more than half the employment in the economy and should be the engine of job creation and growth, so if city governments aren’t able to create an environment in which they can prosper, that will hamper prosperity within cities as well as for SA’s economic growth in aggregate.
Though the study doesn’t measure service delivery as it affects citizens directly, chances are that the metro authority that takes 333 days to let a business have an electricity connection, or 169 days to issue a construction permit, may not be efficient at providing services to citizens either.
The point the World Bank and Treasury make is that almost every one of the cities is good at something. Mangaung is particularly good on electricity and enforcement of contracts, and even Nelson Mandela Bay is quite good when it comes to construction permits. The Treasury’s objective in requesting the study from the World Bank was to try to get SA’s cities to learn from each other to improve the business environment. Competition won’t harm either and the idea of "outing" their weaknesses is to get them to try to fix these before the next rankings in two years’ time.
That the government wanted the study to be done reflects a recognition of how central big cities are in driving economic growth, how much investment in the cities matters and how metro authorities are not just any local authorities. That’s in contrast to an attitude to urbanisation and the growth of cities that has sometimes been quite wary, even negative.
But in launching the Doing Business rankings last week, Deputy Finance Minister Mcebisi Jonas emphasised the role of the cities as engines of growth, noting how much faster the metro economies had grown than the national economy — and pointing to the need to ensure the cities were "real players".
Even more interesting, perhaps, was the rhetoric last week about the centrality of the private sector. Investors and business people often don’t realise just how uncomfortable some in the government are with business, and with the very notion that the state on its own can’t really create growth and jobs — that what it’s supposed to be doing is making it possible and attractive for the private sector to do so. Jonas wryly acknowledged this at the launch, with an off-the-cuff line about how people from his background (activist, left wing?) sometimes found this hard to say, but that "we need to acknowledge as government that the decisions we make are critical in creating an enabling environment for business to thrive".
If city governments compete (and collaborate) to win prizes for that, it can only be good for the economy.
• Joffe is editor at large
A view of the Johannesburg skyline. Picture: THE TIMES
RELEASING the results of a ranking of SA’s cities last week, its promoters opted for the "You are all winners" approach that the teachers and coaches of small children adopt when they’re trying to make those who didn’t win the prize feel better.
The "Doing Business" ranking measures how each of the nine largest cities has done on five indicators, which measure how easy it is for a small-or medium-sized firm to get through red tape.
However, the World Bank and the Treasury, which conducted the research, did not publish an overall ranking for the cities, releasing only the rankings on each of the five indicators. One reason no doubt is that this is potentially a political minefield ahead of next year’s local government elections. You don’t have to be good at arithmetic, for example, to work out that Nelson Mandela Bay — the metro the Democratic Alliance (DA) most hopes to take from the African National Congress — definitely did not win the prize. Nor that DA-controlled Cape Town must be near the top of the table overall, while Johannesburg is quite close to the bottom.
That’s a problem, because the World Bank’s global "Doing Business" rankings, which use a similar methodology, measure SA’s largest business city — Johannesburg in our case. SA would do better on the global rankings if Cape Town or even Buffalo City were the chosen city. But there’s not much of an economy in Buffalo City. And these rankings don’t measure factors such as the size of the market or the investment climate.
They also focus on the regulatory environment for more entrepreneurial businesses, not necessarily on all the issues that affect larger corporations. But smaller businesses provide more than half the employment in the economy and should be the engine of job creation and growth, so if city governments aren’t able to create an environment in which they can prosper, that will hamper prosperity within cities as well as for SA’s economic growth in aggregate.
Though the study doesn’t measure service delivery as it affects citizens directly, chances are that the metro authority that takes 333 days to let a business have an electricity connection, or 169 days to issue a construction permit, may not be efficient at providing services to citizens either.
The point the World Bank and Treasury make is that almost every one of the cities is good at something. Mangaung is particularly good on electricity and enforcement of contracts, and even Nelson Mandela Bay is quite good when it comes to construction permits. The Treasury’s objective in requesting the study from the World Bank was to try to get SA’s cities to learn from each other to improve the business environment. Competition won’t harm either and the idea of "outing" their weaknesses is to get them to try to fix these before the next rankings in two years’ time.
That the government wanted the study to be done reflects a recognition of how central big cities are in driving economic growth, how much investment in the cities matters and how metro authorities are not just any local authorities. That’s in contrast to an attitude to urbanisation and the growth of cities that has sometimes been quite wary, even negative.
But in launching the Doing Business rankings last week, Deputy Finance Minister Mcebisi Jonas emphasised the role of the cities as engines of growth, noting how much faster the metro economies had grown than the national economy — and pointing to the need to ensure the cities were "real players".
Even more interesting, perhaps, was the rhetoric last week about the centrality of the private sector. Investors and business people often don’t realise just how uncomfortable some in the government are with business, and with the very notion that the state on its own can’t really create growth and jobs — that what it’s supposed to be doing is making it possible and attractive for the private sector to do so. Jonas wryly acknowledged this at the launch, with an off-the-cuff line about how people from his background (activist, left wing?) sometimes found this hard to say, but that "we need to acknowledge as government that the decisions we make are critical in creating an enabling environment for business to thrive".
If city governments compete (and collaborate) to win prizes for that, it can only be good for the economy.
• Joffe is editor at large
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