Clem Sunter

Time for an Economic Codesa

2015-12-17 08:08

Clem Sunter

That was the week that was in South Africa, to quote the title of an old British comedy series. Three finance ministers in one week must be a record of some kind and certainly proves that the future is unpredictable and beyond your control. Sometimes there are no flags to indicate an imminent drama and even a fox is taken by surprise.

One of my recent articles for this website was entitled: The perfect storm: why waste it? It went through all the red flags fluttering in the breeze concerning the global economy and South Africa. Now, all of our own making, the breeze is turning into a hurricane with an epicentre not far off our shores.

So rather than write yet another negative article about the current situation, I want to stress the idea that I have been advocating in public for the last few years. We need an Economic Codesa to set our economy on a new path just like the political ones did in creating a new democracy in the early 1990s.

We achieved political freedom without economic freedom and that is a very dangerous mixture, particularly at a time of low economic growth.

We never completed the job and we still have economic apartheid dividing the haves from the have-nots. In addition, we have a national unemployment rate of around 25% which is equal to the record figure in America at the time of the Great Depression in the 1930s.

No presidential council of business advisers meeting privately behind closed doors with government ministers is going to resolve the basic problem we have of widespread exclusion from the formal economy suffered by township and rural entrepreneurs.

We need to start creating an inclusive economy right now that encourages widespread participation in the wealth creation process.

 I do not mean by this an old-fashioned socialist economy driven from the centre, but I do mean a centrally conceived and agreed platform which allows the entrepreneurial spirit to flourish. I guess the best way to express my wish is that the objective of an Economic Codesa must be to construct a level playing field instead of the highly slanted one we have at the moment.

 I also totally agree with Julius Malema when he talked in the UK at my old university about employee share ownership programmes so that workers too - rather than a few politically connected individuals - can share in the capital gains of business.

I even wrote a column in February 2012 expressing the view that Esops, as these programmes are known, are top of the pops. If it works in the UK with the John Lewis chain of upmarket department stores, it can be made to work here just as effectively.

None of this is easy to achieve and it requires a big-bang event with plenty of fanfare and media coverage. Indeed, it should be beamed live on one television channel.  

At the convention should be government and the leaders of the other political parties; big and small business; representatives of the unions, the professions and civil society; and especially the South African entrepreneurs who have created companies with world-wide interests out of nothing. One could perhaps ask Mark Shuttleworth and Elon Musk to come from overseas to attend as well.

Moreover, we should have a hashtag #EconomicCodesa so that the public can join in with innovative suggestions and make their own comments on the proceedings. Just like the political Codesas, there will have to be plenty of negotiation because sacrifices will be needed on all sides to reach the goal of economic freedom and employment for all.

However, the final document should be as sacrosanct as our Constitution with measurable outcomes that can be tested in a court of law.

The main argument which has been used against the viability of an Economic Codesa is that there is not the same sense of crisis as existed in the late 1980s and early 1990s. As a result of the domestic events of this last week, I think this issue falls away.

Equally, people contend that the economy is too complex a topic and the participants too wide apart in circumstances and ideology to reach consensus. In response to the second objection, I would like to quote the final paragraph of the very first book I wrote in 1987 about South Africa taking the High Road:
 “My parting shot is this. Just think that 200 years ago, in the summer of 1787, there was a nation which was in danger of falling apart. Then fifty-five men assembled at a convention and drew up a document which has served as the basis of government for that nation ever since (with 26 amendments). The place was Philadelphia and the nation was America. That event was not predictable - it was made to happen by great men. The same can be made to happen here. I hope this book has sown the seeds of action, because in the end it is only action that counts.”

We did it once against all the odds. We can do it again.

- Send your comments to Clem.

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