The Free Market Foundation (FMF) impresses upon the 115 CEOs – who recently ‘pledged’ to help ‘build the country’ – the dire necessity for them to extract substantive policy concessions from South Africa’s hostile and destructive government. This pledge follows last month’s announcement by Business Unity SA (BUSA) and Business for SA (B4SA) to enter into a ‘partnership initiative’ with the government.
Allowing government to continue dictating the terms of South Africa’s reconstruction, when the government itself is the primary cause of social and economic collapse, would be folly.
Business cooperation with government must not be unconditional. Government must concede significantly on policy matters before business engages.
New philosophy
David Ansara, FMF CEO, recently addressed the 1926 Club in Johannesburg, where he set out the philosophy with which corporate South Africa must henceforth engage with government in light of the various policy-imposed crises we face.
‘Government’s “assurances” are often meaningless – it ends up conceding very little, while business concedes the whole field,’ said Ansara.
‘Instead, business must demand immediate and tangible reforms before committing to any indefinite or permanent partnership.’
The ‘access’ to government that many business leaders prize should be used for leverage.
Access should be used to achieve tangible results rather than merely securing good relations with government. Obsequiously following government’s lead amplifies bad policy and prolongs South Africa’s pain under the yoke of malicious government.
Social compacting and consensus
The current administration of Cyril Ramaphosa has not yielded the market-friendly reforms that many in the business community expected it to.
Under Ramaphosa, harmful legislation like the National Minimum Wage Act, the Expropriation Bill, the National Health Insurance Bill, and the Employment Equity Amendment Act, have been shepherded through Parliament. These policies have the potential to amount to a death-knell for the economy.
At an FMF event on 26 July, Dr Anthea Jeffery of the Institute of Race Relations rightly argued that ‘one could see Ramaphosa as the most successful RET [Radical Economic Transformation] president, rather than Zuma.’ Business would do well to appreciate the malicious nature of their government partners.
These and other policies are among those that business must insist the government abandon or repeal before it avails itself to assist government. If business is expected to clean up the mess that government has created, then business must determine on what terms that will be done.
Ramaphosa’s ‘social compact’ model of engagement with business and civil society is one to be approached with extreme caution.
‘Social compacts tend to ignore the elephant in the room: the deeply ideological orientation of government policy which is intrinsically hostile to a market-based economy,’ said Ansara.
Business must do all it can to avoid being co-opted by hostile government actors who seek to legitimise bad policy and use the capacity of commercial firms to implement those policies.
Business is ‘not a support mechanism for government and its agendas. [Instead, it has] and must have [its] own agendas: to make money, to provide goods and services, and to allocate scarce resources in the way that most benefits economic growth and job creation. [Business] must be a check and a balance on government, rather than an amplifier of its power over society.’
Ansara explained that ‘business must shift from attempting to build consensus with government, to a posture of negotiation. It’s time for business to understand its significant bargaining power. Currently business “engages” with government from a position of assumed weakness, when government is in fact the weaker party. Government needs business, not the other way around.’