Friends & Friction: SA economy’s hopeful moment

2014-06-03 10:00

“Economic patriotism” is what US President Barack Obama called it, and I like it.

Nobody knows exactly what it means because he was vague when asked about it, but it pushes the right buttons. If we adopted it and shaped it to suit our needs, I have no doubt it would lead to a strong economy, with strong companies, and a thriving entrepreneur class, creating jobs.

Recently, the British demonstrated what “economic patriotism” might mean. Pfizer, the

US drug company famous for developing Viagra, tried to take over a UK rival, AstraZeneca, but British politicians were up in arms.

Lord Heseltine, the former trade minister and now adviser to Prime Minister David Cameron on economic growth, said: “Ministers should have reserve powers to protect British companies when crucial interests were at risk.”

The French did something similar too. President François Hollande summoned General Electric boss Jeff Immelt to his residence about the possible takeover of French company Alstom. The list is endless.

If South African politicians tried to block an international takeover of a local company, local experts would complain about how this country is hostile to foreign investors.

As a result, we have already lost strategic businesses such as Vodacom and Iscor. The former to British telecoms giant Vodafone and the latter to Indian steel giant ArcelorMittal.

First World countries don’t sell their silver cheap. They are driven by profit, and so we should not expect foreign companies to worry about our 25% unemployment rate. They will simply cut costs by cutting jobs.

Hopefully, the “radical transformation of the economy” President Jacob Zuma is talking about does not mean a radical change of processes and further complication of the business environment.

The size of our new Cabinet is unprecedented, meaning we now have our biggest government ever. Hopefully this will translate to an infusion of the love of the country and its people in all government policies, which would in turn mean putting national interests above the interests of the self. That is patriotism.

The time for experimentation is over. It is time to build a predictable and stable environment.

Hopefully, the new small business department does not result in radically thick layers of bureaucracy but reduced taxes for entrepreneurs to be able to reinvest. It means government must jump to solve crises such as the platinum mining strike that has led to our economy shrinking in the first quarter.

Hopefully, the cluster of ministers who are in charge of our economic prosperity will infuse “economic patriotism” into their policies and, most importantly, they will make it easy for small businesses to lead economic growth.

Radical transformation should be about radically propelling South Africans forward and not handing our economy to the Guptas.

» Kuzwayo is the founder of Ignitive, an advertising agency

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