(Delwyn Verasamy/M&G)
Across South Africa, businesses on 18 July will recognise Nelson Mandela International Day, brought into life by the United Nations in a 2009 resolution. They will provide resources to schools, offer skills-based volunteering or participate in other community initiatives. And they will inevitably widely publicise their efforts.
We should respect all good deeds, however small. But we in business are expected to study market needs as well as the strategies and operations required to meet them. We must admit that these acts, even counted all together, will have little discernible effect on the plight of the poor and vulnerable in South Africa. They do not constitute a business plan for dealing with extreme poverty.
This is in part because of the paradox of the South African economy since the transition that Mandela led. According to World Bank figures, private sector led growth has more than doubled our per capita GDP in purchasing power parity (PPP) terms to above $15,000. This has resulted in enormous profits to the private sector (as well as tax revenues that have contributed, for example, to notable improvement in access to electricity and healthcare for all).
Yet over that same period, undernourishment has doubled, the labour force participation rate has declined, and millions more live in what United Nations Habitat characterises as slums. Even if lower than at the worst moments of the liberation struggle, violent death rates are astoundingly high — 45 per 100000 South Africans a year, compared with five per 100 000 globally or even 14 in sub-Saharan Africa, including countries at war.
In other measures, we are also grossly underperforming our peers. Brazil has a population that is more than three times as large as South Africa’s. It is a poorer country, with a per capita GDP in PPP terms only two thirds as large. Yet more than 1 000 children will die of malnutrition this year in South Africa, three times as many as in Brazil.
Given these sober realities, the actions that businesses take on 18 July (even if sustained throughout the year) will be palliative measures at best. At worst, they do nothing to sustainably nourish the poor while they feed the self-justification of those in business who have profited greatly these past decades.
Honest reflection requires recognition by business leaders that the model of global capitalism that South Africa embraced in 1994 and of which they are part has failed to deliver for the poorest. Across Africa, the arrival of foreign direct investment will actually lower development outcomes for the already vulnerable. Even investments sponsored by the World Bank Group and explicitly promising to be peace and development positive will predictably increase violent conflict.
In South Africa we see these outcomes in the platinum belt, which accounts for more than 70% of global production. Investment, production and profits more than doubled in the post-apartheid period. Meanwhile, neighbouring populations suffer some of the worst development outcomes in the country, with Statistics South Africa 2020 data showing, for example, that the unemployment rate in Bonjanala Platinum district municipality stands at 49%, fewer than 20% of homes are connected to running water, and fewer than a third of adults have finished high school.
Under these dire circumstances, small acts of charity by businesses that profit from the status quo economy while a quarter of the country’s population suffers from food insecurity flies in the face of the wholesale, systemic change that Mandela Day was originally meant to stand for: promotion and protection of human rights; reconciliation; gender equality and the rights of children and other vulnerable groups; the fight against poverty; and the promotion of social justice — that is to say, a society in which the need for corporate acts of charity is rare.
Why are we still having this conversation?
A group of leaders across sectors convened last month to consider the private sector Africa needs for peaceful and inclusive development. This unfolded under the aegis of the Business & Conflict Observatory, an initiative for evidence-based dialogue in cooperation between Stellenbosch University and the United Nations Peacebuilding Support Office.
One of the most important questions grappled with was why we (as South Africans in general but as those concerned with business in particular) are still having this conversation about a bad-fit private sector that seems largely divorced from delivering on the promises of the Constitution for the country’s poorest and most vulnerable — even though the nature of the economy was always considered core to both apartheid and the success of the democratic transition.
They concluded that part of the answer may lie in the timing and abruptness of the economic transition, with South Africa (as one participant noted) “experiencing globalisation before country knew who it was” and its disruption to generational ways of making a living as well as community structures of mutual support of the poorest grossly underestimated. We can feel stuck in a system that was probably bad-for-fit from the beginning.
Part seems to lie in the culture of businesses: labour treated as a disposable factor of production, a cynical or hostile orientation to black economic empowerment, or the chasing of greater profits abroad rather than reinvestment in the productive economy at home, as just a few examples. Some may not recognise the degree to which they are acting out a mindset inherited from the Apartheid era.
But the most important seems to lie with contemporary business leaders themselves. Many simply do not consider the plight of the poorest and most vulnerable, even if touched by or proximate to their operations. Many fail to move beyond opportunistic, enterprise-focused investments towards the coherent sectoral or place-based approaches at the heart of human development.
And they may live largely in echo chambers of blame-shifting (most prominently to government) in which a vision for the private sector’s role in a peaceful and inclusive economy that reaches the poorest and most vulnerable doesn’t even come into question.
A true Mandela Day contribution by business
The Consultative Business Movement — the most progressive private sector voice during the democratic transition — engaged already in 1990 in self-critique that still rings true today:
“While business leaders have been willing to participate in externally focused initiatives, they have proved less willing to apply themselves with equal rigour to transforming their organisations so that the organisations reflect the culture of non-racial democracy and human rights at organisational and operational levels.”
This suggests that leaders this Mandela Day should not look outward for charitable opportunities, but rather inward towards the transformations required from businesses themselves. Here are a few that business leaders can undertake today.
Listen and learn. We can sit with those in government and civil society most directly involved in the problems of the poorest and most vulnerable. We can make it our business to be informed citizens with respect to issues of human security and human development such as hunger, violence, housing, education and livelihoods at both local and national levels.
Commit in the organisation. We can examine our own roles — direct and indirect, intentional or not, by act or omission — in extreme poverty. We can declare it part of the strategy of the organisation that no person touched by the company — starting with employees and suppliers and building towards customers and proximate communities — be denied the full promise of our Constitution.
Take calculated risks. Where the problem or the solution are beyond the scope of the individual enterprise, we can adopt the mindset that the failure to achieve a transformed South Africa may not be our fault, but it is our shared responsibility. We can invest not only financial and technical resources but relationship and political capital in coalitions demanding systemic transformation to end extreme poverty.
In doing so business leaders might see, in the spirit of the day, that a true Mandela Day contribution to his vision as enshrined in our Constitution can be built from discrete but consequential actions — but only if we start with change within ourselves.
Professor Brian Ganson heads the Centre on Conflict & Collaboration at Stellenbosch Business School.