You can’t ‘create’ industrialists like magic

2014-09-28 15:00

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Industrialists are people who are diligent and hard-working. Can government train people to become industrious?

I don’t think so.

Even during my schooldays, I could tell who was most likely to become a success and who was not.

You could see it in their attitudes.

I think everyone would like to see 1?000 new industrialists develop in South Africa to grow the economy, provide jobs for the unemployed, and produce goods and services to serve South African consumers.

It is good that the government is thinking about such things, but I have a problem with the execution of the idea.

How will it be achieved?

I have never heard of a success story in which a great industrialist emerged from a government programme. Most of them seem to achieve success by themselves and in fact many have had to fight to overcome government-created legal barriers.

Politicians sometimes seem to think there is some kind of magic they can employ to make things happen, like creating 1?000 industrialists in the same way that a magician pulls a rabbit out of a hat. But industrialists are not rabbits and politicians are not magicians.

The country desperately needs industrialists, but if the government wants to make sure they are all black, it will mean introducing measures to prevent people of other races from succeeding.

This would be unwise from the point of view of the many consumers and jobseekers in this country. In fact, it will be bad for everyone.

Apartheid was bad for South Africa’s economy and the more strictly the laws were applied, starting from the 1950s, the worse it was for the economy.

Economists say South Africa’s steady economic decline started at that time, compared with other nations that had previously had lower incomes than ours.

For some years after 1994, the time when Archbishop Desmond Tutu called us the rainbow nation, the freedom South Africans gained from democracy gave the economy a push.

There was excitement in the air as most people welcomed the normalisation of our society.

We must not forget that 68.73% (more than two-thirds) of white South Africans who voted in the 1992 all-white referendum (in which more than 85% of eligible voters participated), voted to end apartheid.

When it talks about industrialists, government does not need to add a race tag.

If we embark on a sustainable model, black businessmen and businesswomen will be the biggest beneficiaries, based purely on the racial composition of the country.

One of the greatest tasks lying ahead for South Africa is to get the 8.3?million unemployed people who are working and supporting themselves and their families.

That is a job not for 1?000 industrialists or for government, but for thousands of entrepreneurs and small businesses that see the unemployed as a source of labour to produce goods and services they can sell to local or foreign consumers.

Mauritius is an example of how the GDP of a country can be increased by transforming large numbers of unemployed people into wage earners. In the 1970s, cultural attitudes prevented many Mauritian women from working outside the home.

This changed when the government attracted foreign manufacturers into its Export Processing Zone (EPZ) to manufacture knitwear and clothing for export.

The factory jobs appealed to the women and a large number joined the workforce. Starting in 1981, the country’s average growth rate for the next 20 years exceeded 5% per annum.

Besides the EPZ policy, the country introduced a range of economic reforms that have taken Mauritius to sixth place on the Economic Freedom of the World rankings.

Instead of destroying jobs like those in the clothing factories of Newcastle, KwaZulu-Natal, the government should create an enabling environment as Mauritius did to absorb the unemployed into the workforce.

I want to repeat the words of Reverend William Boetcker, who wrote The Ten Cannots, which are 10 truths that are as relevant today as they were in 1916 when he wrote them:

»?You cannot bring about prosperity by discouraging thrift.

»?You cannot strengthen the weak by weakening the strong.

»?You cannot help little men by tearing down big men.

» You cannot lift the wage earner by pulling down the wage payer.

»?You cannot help the poor by destroying the rich.

»?You cannot establish sound security on borrowed money.

» You cannot further the brotherhood of man by inciting class hatred.

»?You cannot keep out of trouble by spending more than you earn.

»?You cannot build character and courage by destroying men’s initiative and independence.

»?You cannot help men permanently by doing for them what they can and should do for themselves.

All of us in South Africa should heed these truths. We should stop trying to do what cannot be done and start doing what is possible. 

100 black industrialists in three years

In the next three years, government’s intervention in radically transforming the economy will be felt by many.

This is according to Deputy Minister of Trade and Industry Mzwandile Masina, who told a stakeholders’ engagement session last month that his department would create 100 black industrialists in three years.

Masina said the government was promising radical economic transformation to get more black businesses involved in transforming society and getting more people to work.

Much of the emphasis will be on new and current black industrialists who are experiencing difficulties in making their businesses grow.

An advisory panel has been set up to look into how government can create these industrialists in the next three years. The plan will focus on:

»?Upskilling businesses involved in the manufacturing sector to produce goods and services.

»?Ensuring government and state-owned enterprises buy local products, thus opening markets for them and strengthening their sustainability.

»?Reviewing the current incentives schemes, which are stringent and which make it difficult for black industrialists to access funds.

»?Launching an incentive scheme that will focus on black industrialists.

»?Centralising BEE accreditation. This will preferably be housed in the department.

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