Mills Soko | Business and government must work together to rebuild SA after Covid-19

The South African government and
business sector must work together to drive the post-coronavirus economic
recovery. But they can only do that if they overcome their history of mutual
distrust and alter their relationship from being tactical to strategic. Notwithstanding
their different business philosophies and practices, South African companies
have been by and large among global leaders in terms of recognising and fulfilling
their societal obligations.

The problem, though, is that a great
deal of the things they have done in the post-apartheid era have occurred out of
historical guilt, fear of government or for philanthropic reasons; they have
not been guided by a clear strategic approach. The absence of a strategic
vision by domestic business partly explains why it has not been proactive and
effective in shaping South Africa’s policy direction.

Undeniably, the relationship between
the government and business has been previously paralysed by tensions that have
mirrored mutual distrust between these two key societal actors. The
relationship became strained under former president Thabo
Mbeki’s leadership, and it deteriorated during his successor Jacob Zuma’s
tenure which was, among others, notorious for the rise of the Gupta brothers as
kingmakers in the ANC-linked corporate patronage networks.

Trust
deficit

The trust deficit was highlighted, for
instance, by the spat in 2004 between Anglo American’s former CEO, Tony Trahar,
and Mbeki over Trahar’s views on South Africa’s political risk profile, the controversy
in 2007 over the anti-crime campaign launched by the First National Bank (FNB),
the searing criticism in 2012 by the former Nedbank chairman Reuel Khoza of the
ANC’s governance track record, as well as the
discord in 2013 over the ‘You Can Help Campaign’ initiated by the FNB – which
the ANC denounced as an attack on its leadership and the capabilities of the
government.

Historical tensions have hampered the government and corporate sector from engaging in candid and
constructive dialogue about what needs to be done to grow the economy and
tackle the country’s pressing socio-economic problems.

The government has tended to accuse business of being
unpatriotic and uncaring for the national interest. For their part, business leaders have
deplored the quality of leadership in government and voiced a lack of
confidence in the ability of government officials to understand the needs of
the South African economy and act in its best interests.

Ill-advisedly, however,
business has had a habit of displaying an arrogant know-it-all attitude towards the government. What’s
more, all too often it has evinced a reactive posture on policy issues and has not
provided a much-needed counterbalance to the government’s policy positions. This
is a function of its failure to invest sufficiently in ideas to influence national discourse.

Building
trust

Building trust will require not only a
continuous conversation between the government and business, but also a
cultivation of new and meaningful relationships that can sustain that trust. These relationships ought to be built on the acceptance that both the government
and business have different yet complementary strengths that must be harnessed
to address South Africa’s present-day challenges.

The Covid-19 pandemic has provided an opportunity
for the government and business to cast their differences aside and collaborate
in the national interest. Under the aegis of Business for South Africa, business
has played an invaluable role in keeping the economy afloat during the
nationwide lockdown and in supporting the government’s efforts to mitigate the
effects of Covid-19.

Even so, there needs to be a paradigm shift
both in terms of how business stands up for its interests and in relation to
how it interacts with the government. International experience has demonstrated
that countries that have attained a degree of success are the ones that have
managed the convergence between government and business in a strategic way. Both
the government and business must transform their relationship from being
tactical to strategic.

Common good

To this end, they need to delineate
specific areas of agreement on what constitutes the common good in South
Africa. They ought to agree on the types of economy and society that are needed
in the country.

They need to agree on the strategies
that will be pursued, and the trade-offs and compromises that need to be made,
in order to secure the desired economy and society. There needs to be agreement
on the notions of competitiveness, social solidarity and inclusivity.

They need to agree on what the
obligations of government and business should be in respect of providing public
goods, especially in terms of building human capital and growing South Africa’s
skills base. And they ought to agree on the kind of foreign policy that South
Africa must pursue, one that will enable the country to maintain its
international obligations while also fulfilling its domestic social and
economic objectives.

Visionary and effective
leadership from government and business is required to undo the economic damage
caused by Covid-19 and to reverse South Africa’s chronic economic
underperformance and ensure that the country achieves its considerable economic
potential. Government and corporate leaders ought to recognise that the separation
between business and government is false and superficial. One cannot
exist and function without the other. South Africa’s problems are too big for
government to be able to act alone, and they are too complex for business to be
able to solve alone.