Together more can be achieved

2009-05-04 00:00

It is a relief that the electorate has spoken at last. The electioneering was interminable and not particularly elucidating. There was a good deal of character assassination and as much hypocrisy as leaders promised to correct deficiencies that many have failed to address before, despite their having been in positions to do so.

Public representatives and officials can now return to the responsibilities for which they are being paid, and we can get on with our lives and our endeavours to deal with the economic challenges that lie ahead. These, as much as any other factors, will restrain government from making radical changes. It is so much easier to preach radical change when in opposition than it is to effect it when the responsibility of government rests on one’s shoulders. In one sense, at least, we would all hope for radical change, however, and that is in the area of corruption. This was central to the election, it seemed to me, and showed that we have developed a conscience which should spark the more earnest will to use the legislative framework and bring corruption under control. Jacob Zuma has made encouraging statements, not the least of which have revealed commitment to efficient delivery. Let’s see what transpires. I know of stalwart African National Congress supporters who are perfectly capable of doing far better jobs than some of those who have been deployed for reasons unrelated to their abilities.

As we move into the months ahead, it will be particularly interesting to see how the relationships between the public and private sectors develop. In developed countries where governments have had to come to the rescue of the market economy by the diversion of billions, it is inconceivable that there should be a reversion to the ultra-free market which displayed scant respect for self-regulation and undermined the concept for years to come. Here, because of the inherent strength of the finance sector and the restraining effects of the National Credit Act perhaps, the government has not had to consider similar bail-outs and has found other ways of promoting the recovery of the economy. It has done this by reinforcing its position as the major investor. Whether we like it or not, the economy currently is not in the hands of the private sector, and it is anybody’s guess when the situation will return to what free marketeers consider to be normal.

The pertinent question concerns the manner in which the government will deal with these circumstances. It will realise, surely, that the role of the private sector in growing, as opposed to saving, the economy, is inalienable. That Trevor Manuel could afford to allocate such large sums for investment is attributable to his prudence and, particularly, the huge increase in the amount collected by way of taxes. If this decreases steadily as a result of a moribund business community, the amount available for similar investment will decline rapidly. Beyond the immediate term, therefore, business has to grow if economic stagnation is to be avoided. This will not be possible if the government sees its new role as a regulator. There is a degree of concern all over the world that regulation will increase beyond a point of enablement. Once the technocrats in the government get on a roll of regulation, they find it difficult to stop. This is already evident here in the plethora of procedural rules that prioritise compliance ahead of delivery and, contrary to intention, create even greater inefficiencies. So it is with many aspects of the Municipal Finance Management Act, for example.

What is clearly required is a new-style partnership between the public and private sectors which is built on the understanding that together a lot more can be achieved than if the government makes the rules and business makes the profits. Many of the frustrations experienced by each party could be overcome if it were acknowledged, in practice, that optimal economic growth requires a real partnership between the government and the private sector. This may not be so easy to accomplish here in view of the formal political alliance between the government and labour which, in the international scheme of things, is not normal at all. We live in hope.

• Andrew Layman is the CEO of the Pietermaritzburg Chamber of Business.

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