With labour seemingly sidelined in talks affecting the economy’s future, big business isn’t as hard done by as some believe. (Waldo Swiegers/Bloomberg via Getty Images)
Transition. It’s a word that crops up more often nowadays, particularly in the context of our slow and often painful crawl towards a greener economy.
In South Africa, the word “transition” is especially loaded. It was not so long ago that the country underwent its own economic reconfiguration during its passage towards democracy.
Today, the urgency afforded to South Africa’s energy transition has coincided with what looks to be another period of political rupture, the true extent of which will be exposed in the aftermath of next year’s election.
Said rupture, if it comes to bear, will be the result of the current administration’s failure to bring about a more equal and just economy, a rewiring gone wrong.
As was the case 30 years ago, this transition looks to be shepherded by the more powerful among us, namely the country’s corporate elite. Despite a view that SA Inc’s support is misplaced, given the government’s perceived betrayal of the private sector after apartheid, business has landed itself in a pretty position — its adversaries to its left now seemingly nudged out of the picture.
Last week, business leaders, who have now signed a 115-strong pledge to save South Africa’s economy, met the government as part of their collaboration to arrest the country’s decline. If the collaboration is successful, helping end South Africa’s energy, logistics and corruption crises, it could lift the country’s GDP by 3% or more, the business lobby claims.
The pledge by chief executives, announced the week prior, was met with cynicism from a number of analysts, many of them pointing out that big business was effectively lending a hand to a wrecking ball of a party in the ANC. Behind this criticism is a view that this corporate elite should finally buck up, lest they fall into the trap of hitching their wagon to the governing party — and its less palatable policies.
In a statement, neo-liberal lobby group the Free Market Foundation called on business to demand that the government abandon some of its policies, which have given rise to the National Minimum Wage Act, the Employment Equity Amendment Act, the Expropriation Bill and the National Health Insurance Bill, each of which have been deemed bad for business.
“Business must do all it can to avoid being co-opted by hostile government actors who seek to legitimise bad policy and use the capacity of commercial firms to implement those policies,” the foundation said.
Responding to concerns surrounding the CEO pledge, Standard Bank South Africa chief executive Lungisa Fuzile said he would work with the government if it means improving the country’s prospects. “Because I want a South Africa that works, a South Africa that delivers prosperity for everyone.
“I am not doing it for the governing party. I am doing it for South Africa. South Africa does not belong to the government …. As a chief executive officer of a company that operates in South Africa, I will work with a legitimate government that exists at any given point in time.”
In their analysis, the Brenthurst Foundation’s Ray Hartley and Greg Mills pointed to a sort of moral weakness that has characterised corporate South Africa’s dalliance with the state. “Business has fallen for a political chimera,” they wrote.
“It will help the ANC shore up public enterprises ahead of next year’s election and then, its services no longer needed, watch aghast when the next government (likely to be formed by the ANC or an ANC coalition) brings out the lash with a new raft of populist policies.”
The problem is — as the Brenthurst analysis suggests in its contention that “business never found a government it didn’t like” — if you’re looking for a backbone, you’re not going to find it in SA Inc.
The pitfall of certain analyses of corporate South Africa’s role today is that they tend to overstate the extent to which big business is under siege — and the unearned boost its alliance with the governing party has given it, even during the worst of times.
It should be noted here that Brenthurst has its own history with the ANC. The brainchild of Harry Oppenheimer, the Brenthurst Group brought together members of the country’s white corporate fraternity and the ANC to talk economic policy. The Brenthurst Group — made up of Anglo American executives, and the then chief executives of Sanlam, Old Mutual and Standard Bank — was apparently deeply concerned that progressive forces had an undue influence over economic policy.
At the heart of commentators’ criticism of corporate South Africa’s posture towards the state is a view that it has relinquished a considerable chunk of its power, allowing these so-called progressive forces to establish primacy.
Although this may have been true at some point — for instance, when labour federation Cosatu was able to hold off efforts to unbundle and privatise Eskom — it would be wrong to say labour has managed to maintain its foothold in its dealings with the “talk left, walk right” ANC.
The National Minimum Wage Act was not the win for labour that the Free Market Foundation’s statement implies. In fact the paltry bump in minimum wages, negotiated by social partners, including Cosatu, at the National Economic Development and Labour Council, came with certain trade-offs that ended up being harmful to the trade union movement in the long run. Amendments to South Africa’s labour laws, pushed through with the National Minimum Wage Bill, required trade unions to hold secret ballots to decide on industrial action, thus infringing on the right to strike.
Although Cyril Ramaphosa’s presidency hasn’t been the all-out victory that big business may have hoped for (failing, as it has, to create and hold on to investor confidence) it has propped the private sector onto a political pedestal. Today, despite continued resistance from the left, Eskom’s unbundling and other pro-privatisation reforms are now not so much a question, but an inevitability.
All this to say that it is not surprising that labour has been elbowed out of conversations about the country’s economic future, which Cosatu has complained about.
ANC-induced losses have hit everyone, including big business, although not nearly to the same degree. And as our current economic transition has so far shown, some are still more equal than others