Government can’t do it alone

2008-08-04 00:00

Finance Minister Trevor Manuel went to the press last week and outlined many of the considerations he feels should be taken into account in respect of SA’s economic policy over the next five years. The world’s financial pundits have for many years acclaimed Manuel’s performance and control over the country’s finances.

I have also sung his praises, even on one occasion suggesting he would make a good president.

However, I do feel, on reading the article, that Manuel has failed to place sufficient emphasis on the role to be played by South African business (in particular, its labour) in maintaining a successful economy. Of course, Manuel would say that it is not for him to dictate to commerce and industry how they manage their affairs. Rather, he would see his responsibility as being to use economic policy to create an environment in which industry and commerce can become both competitive and successful.

Until a year ago, the British economy was being hailed as one of the world’s greatest, yet today it is imploding in all directions. This time, unlike with previous implosions, the reasons are not rooted in massive unemployment or high inflation levels, but something far more simple: government, business and, most importantly, the population, have spent money they haven’t earned. All parties have been creating ever-increasing debt levels.

South Africa will fail to produce sustained wealth unless its industry and commerce also review their practices and policies and plot a path that preserves what is working and changes what isn’t.

I would go further and say that the key to a successful economy is, to a large extent, in the hands of South Africa’s individual and collective workforce. Unless labour is on the same side as capital, success will never be achieved. Labour causes the production ills, yet it also has the wherewithal to produce the success.

All the considerations raised by Manuel in his article, one way or another, come back to labour — growth of GDP, job creation, increased savings, developing an export culture, attracting investment and poverty relief.

The question that needs to be asked is: “What do we need to do to make it in the interest of labour to want to become the most successful in the world?”. If this question is not properly answered, current labour apathy will not only continue, but could escalate from disinterest into violent protest.

Economic policy has to work towards fulfilling the needs of the people. It cannot be designed without making people’s needs uppermost. Manuel’s words indicate that he is very mindful of this.

However, great governance alone is not enough. Captains of industry must begin to think very differently about how they manage and, in particular, how they remunerate employees. The methods they have currently adopted breed apathy in our workforces and result in everything that is economically bad. If current labour practices do nothing more than mirror yesterday into tomorrow, we will never produce the wealth levels that this country (and its people) desperately need, however good the financial strategy of government.

South Africa is in a unique position, not just in Africa, but also across the world. It has a major share of the world’s most important and valuable minerals with a sophisticated infrastructure in place to help with the production and transport of these minerals. It has a wonderful climate, abundant space and people desperate for the opportunity to earn. The responsibility of our management is to look for every opportunity to do things differently that will result in economic success — for shareholders, management, workers and the country.

Next week, I shall continue this debate by looking more analytically at Manuel’s suggestions and how labour impacts directly upon them.

frankgreenfield@iafrica.com

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