President Cyril Ramaphosa has been giving some big speeches lately. I thought his address at the funeral of Jesse Jackson was really good and very moving.
This week he spoke to a large conference of business leaders, academics and politicians, trying to cheer them up with a message of recovery and common sense.
The speech, to a conference organised by News24, was wide-ranging but also deeply revealing of a psychological fissure, or perhaps an actual mania, in the creation and discharge of economic policy by the ANC and the president himself.
Spot the intellectual tumour here as the president opens his remarks to the conference on Thursday: “People are often terrified of even talking about transformation. But if we are to move forward, there must be transformation. We’ve got to expand ownership, for how [else] are we going to grow our economy if we’re not going to broaden and expand ownership? Because ownership, the concentration thereof, is what is said to have caused the origins of the problem of unemployment and inequality.”
Nowhere does he suggest that growing the economy could drive transformation. On CloudCyril it’s the transformation that triggers the growth. I’m not surprised he wobbled towards the end, “… ownership, the concentration thereof, is said to have caused the origins of unemployment”.
Said by whom? The ownership he’s talking about prevailed in the 1970s and 1980s when he was organising mineworkers and apartheid was its own special economic circumstance. But 40 years later here’s Cyril, now running the show (unemployment 32% and GDP growth 1%), arguing that once all the white owners are replaced by black ones the economy will suddenly take off and we’ll all be in heaven. “How else are we going to grow?” he asks. Jissus ...
Prioritising growth over transformation would not only shrink your unemployment problem but it would probably solve your transformation problem too.
Pieter du Toit, one of News24’s senior editors, suggested Ramaphosa was perhaps indulging in a little doublespeak. “Ramaphosa’s remarks,” he wrote later, “weren’t aimed at his audience but at a crowd beyond the convention hall. Whenever the president wants to move forward on something, he has to give himself cover — and this is as good a cover narrative as there is. Because no-one can argue against it, and everyone understands that our past has a long tail.”
I disagree. If all we repeatedly hear from Ramaphosa is the absurd suggestion that if we just change the colour of our economy, and not its shape or purpose or size, we’ll be OK, then what are we to do? What if he really believes it is just a matter of replacing white owners with black ones? About 15 years ago I asked him if he thought black capitalists would be very different from white ones, and he vigorously agreed they would. That thinking has cost us 30 years.
The sad takeaway here is that once you conjoin economic growth and racial transformation/ ownership in a stock phrase like “inclusive growth”, you’re stuck. And if, when you contemplate why you’re achieving neither growth nor the transformation you seek, and you emerge with the answer that you’re failing on the “inclusive” part, you’re going to compound the mistake you’ve been making forever. You’re going to continue to crowd out growth and investment with the political messaging you think is going to get you re-elected.
You probably really could blame apartheid for the state of the economy 30 years on, but only if you’re honest enough to admit the extent to which your rage may be clouding your judgment
It’s very simple. To create more jobs, you need investment. To get more investment, you need more companies. To get more companies, you need to make it far less risky and complicated for the people starting them or investing in them. South Africa badly needs a giant injection, philosophical and physical, of enterprise and a new generation of entrepreneurs.
They’re there, but it takes real courage to start a business, to employ people you may not know and to borrow money from banks that want it all back next month. We need to make all of this exceptionally easy for every South African.
But nothing Ramaphosa has ever said makes such an outcome likely. He goes on about the primacy of racial transformation not just because his political base likes it but because he believes it too.
I’m sure he sees the value of big-company private sector participation in the economy, but not to the point that it dislodges the state from the centre of all the action.
It’s our tragedy writ large. You probably really could blame apartheid for the state of the economy 30 years on, but only if you’re honest enough to admit the extent to which your rage may be clouding your judgment. Prioritising growth over transformation would not only shrink your unemployment problem but it would probably solve your transformation problem too.
But first you have to be brave.
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