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Anil Sumaraj
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Big Business MUST change or we will be destined to be another Zimbabwe

12 March 2014, 20:30

Most people agree that Zimbabwe has gone terribly wrong and is run by a dictator and his henchmen. No one seems to ask: Why, What, When, Who and How this happened.

A summary of the Zimbabwe Story

The British promised to compensate Zimbabwe in order to allow the white farmers and business leaders to continue. This happened at the Lancaster Agreement. The British did not fulfill this agreement. Big business tried to hide and pay less tax as is done in the west not considering that the problems of Zimbabwe were just beginning. They also did not invest in the infrastructure of the country. After the first General Elections (1980) to date, no viable coherent political party was formed that could credibly stand up against ZANU- PF. The current MDC is even fighting with itself for leadership positions. A clear indication of greed and power instead of service to the people. Also that civil society as well as business did nothing when they saw the ship began to sink. The eminent persons of Zimbabwe chose to leave and come to South Africa rather than fight for the defenseless. What would have happened if people like Tutu, the late Kader Asmal etc. had decided to leave instead of making themselves heard? It should be noted that the Archbishop has spoken up against both, the evils of apartheid as well as those committed by the current administration. Successive African leaders paying homage to Robert Mugabe, almost a saint like figure!

In South Africa the biggest legacies of apartheid is land ownership and opportunities for all.

On the question of land ownership, the State owns the majority of land in South Africa. Yet, it wants to expropriate land from the current owners, land that was originally stolen, but as time passed, successfully and legally changed ownership. The question of the majority of the land in question is owned by successful farmers. A program on Carte Blanche (DSTV Channel 101) some time ago, revealed that most farms that were transferred (using the willing buyer, willing seller principle) to the original owners have failed to yield the same as before.  The result has been that many successful South African farmers migrated to Zambia and are now applying their trade with happiness. This is a loss to South Africa. If we continue on this route we will in the future be importing grain etc. The State must start or be forced to think differently. It can compensate people for land claims or give up some of the land it owns. How far back can a land claim go? The Act was promulgated by the British in 1912; hence, using this logic some might argue that the British should be held responsible? Taking from those that have to give to those that don’t is communism. (The old story that if I have 2 cows then I must give you 1)

 The State must allow for businesses to get involved. I think that when people talk of land that most people are talking about homes, good education and hospitals. This is where the ever so shy business community in South Africa must step in. We need to accept that we cannot be a pure capitalist country like the USA, but rather like the UK, France and India. The current administration is taking us the route of Eva Duarte and Juan Domingo Peron of Argentina which has resulted in that country never recovering.

In India, businesses like Tata, Mahindra, Mittal and Aditya Birla, have made massive contributions to the infrastructure development in the country. They have contributed to housing, hospitals, roads, schools and universities, electricity and even water and sanitation. They have done this together with the approval of the government, and contributed where it was needed. India’s largest hospital (3000 beds) is in Bangalore. It is funded by private enterprise, using world class equipment and doctors. The charge is “pay what you can afford”. Indians, both rich and poor go to this hospital. In the north of the country in the Province of Bihar, is India’s largest cancer hospital that was built and is serviced by Tata Enterprises.  Why can Anglo American, De Beers, Sasol, Armscor and other South African companies not do similar? If I consider Sasol, it is making massive profits as the selling price of Sasol is based on the imported price of crude oil. Hence, they should either invest in the infrastructure of the country or reduce the selling price of Sasol to cost plus margin.

Affirmative action was necessary in order to create a change in the mindset of those that had, that those who did not have could also perform and excel.  I totally agree with the philosophy for entry level candidates, however, thereafter it must be based on merit. If the State follows this rule then it will not have to spend as much money as it is currently to fight unjust promotions in the labour courts. This will also result in South Africa becoming a much more productive country. In the last productivity index of 2013, South Africa was in the bottom 50% of the list with our BRICS partners (Brazil, Russia, India and China) in the top 25.  South African businesses sometimes complain that the productivity is below standard because we have too many public holidays. Gujarat is the most successful State in India (contributing 12% of GDP), yet it has the most public holidays (38+ depending on your caste and religion). The reason is simple, businesses must invest in its employee’s education, and it will result in increased productivity.

If Big Business do not take note of what is currently happening, adapt and start investing in the development of South Africa, the price to pay will be devastating. A sports stadium or a swimming pool is only a publicity stunt and must be seen as such by all South Africans and rejected. I understand that businesses are trying to reinvest in society, unfortunately nothing is visible when we look at the state of roads, hospitals etc. A glaring failure is that of education, the State tells us that it is doing well. The facts are different. When 30% is considered as a pass, then what of caliber of people are entering into the job market? Why does business not react?

Most successful countries have proven that the policies of Adam Smith do not work in isolation. Pure capitalism just like communism does not work. If we look at the South African Communist Party, I consider them to be more pure capitalists then communists (look at the cars they drive, the houses they live in compared to what they preach). Societal change is heavily dependent on the South African business community as they are the ones that hold the key- “MONEY”   

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