We cannot be oblivious to the dramatic events that have engulfed South Africa in the past 10 or so days. This country has gone through some hard knocks in what I term “the cracking of a broken window”.
The fragility of our deeply divided socio-economic architecture is in tatters, and the country is going through an unparalleled litmus test since the dawn of democracy.
Society has been shaken to the core. We find ourselves been downgraded to junk status. Of course this is not a laughing matter; it is a very serious state of affairs that has adverse effects on many aspects of our lives in many different ways, depending on each one’s socio-economic position or economic activity.
One Wayne McCurrie was quoted as saying junk status was not automatically a death sentence. “If adequate steps are taken, investors will quickly forget about junk status and life will carry on. If this happens, actual upgrades will take time to happen, but the markets will ignore this.”
McCurrie further pointed out that “plenty of countries have survived junk status. A very powerful argument can be made that junk status was actually a blessing for many of these countries, because it forced change. Junk status can, however, be a death sentence if no action is taken.”
So what can we do?
We can continue to shout slogans of all sorts, or we can decide to focus and have our ducks in a row. It is a wake-up call to the reality that we should be doing a multiplicity of extraordinary things, some of which will be unpopular. Business, in particular, has the supreme responsibility to lead this charge, with the government playing an unwavering supportive and constructive role towards recovery.
Meanwhile, there have been a flurry of comments and views in response to this column. I have had very supportive and encouraging views from various quarters, of which I will cite a few.
One Hein van der Walt, director of the Confederation of Employers of Southern Africa (Cofesa), in reference to “The hard fact is that you need money to make money”, retorts that “another hard fact is that colonial bargaining council systems (have restrained) growth since 1994”. He says we should note that we inherited the colonial bargaining council system in 1914 to protect British artisans against the entry of untrained South Africans to the trade.
Hein further points to a case in point: “Some time ago a hard working entrepreneur came to Cofesa. He has a bakkie and two workers and installs kitchen cupboards and barely makes a living until the inspectors of the bargaining council steps in, and because of not registering with the council and not contributing to a number of funds, he is slammed with a R20000 fine.”
Of course this talks to the constraints small, medium and micro-sized enterprises (SMMEs) continue to experience. It talks to labour regulations and its effects on SMMEs and job creation. What do we do as part of the multiplicity of extraordinary things we need to do?
Another contributor, Marius du Toit, makes an interesting contribution in relation to Christo Wiese’s fortunes. To quote him: “Then one obvious question is where the ‘first’ money came from? The answer to that question may sometimes have value.” Marius says "first" money came from Renier van Rooyen who started Pep Stores, and he supports this with an article that appeared on Business and Economic History Online in 2007 from Anton Ehlers, of the Department of History at the University of Stellenbosch.
The reading provides valuable lessons, particularly to young entrepreneurs who are keen to enter the world of business, and for them to take a long-term view with a staying power that breeds success.
While there is polarisation that seems to lend itself to a number of opinions and strong, differing views, it behoves all of us to engage honestly and robustly, and put South Africa first.
There is no doubt that the subject of radical economic transformation does not sit well in some sections of big business.
Read also: 'Junk'-rated debt could cost more than $10bn in lost funds
But is it a bad thing? A good friend of mine, Mteto Myati, the newly appointed chief executive of Altron, is quoted as saying (relating to radical economic transformation): “In the short term politicians will use it to convince people that it will benefit them, while in the long term it will have destroyed this economy.”
Is that factual, though?
Interestingly though Altron, founded in 1965 by Dr Bill Venter as a 33-year-old telecoms engineer, is a product of Afrikaner "radical economic transformation". Dr Venter was to become the chairman of the CSIR, the same innovation and technology parastatal responsible for a number of cutting-edge ICT products, demonstrable of the relationship between the then state and Afrikaner businesses.
In the late 1940s the Afrikaner volk under a variety of political formations, philosophies and religions came together and formed its own economic movement, what was termed Volkskapitalisme, which sought to benefit every single member of the volk. To quote the Volkshandel, November 1940: “The mobilisation of Afrikaner capital for the erection of our own commercial and industrial undertakings, as envisaged by FBV, will ensure inter alia that the large profits yielded by these undertakings will flow back to Afrikanerdom; the Afrikaner would become both the employer and joint creator of the field of labour for his own fellow members of the volk, and the conditions under which the Afrikaner employee carried out his work would be determined by his fellow Afrikaner.”
I agree with Mteto that "we shouldn’t go break up IBM or Dimension Data in order to create space for others”. We can certainly learn a lot from our rich past.
The general understanding and interpretation of radical economic transformation should not be different from the resolve by Afrikaners to empower themselves, that in today’s South Africa we need to distribute new opportunities to create new Altrons.
Read also: ANCWL 'not surprised' by junk rating
If we are to do a multiplicity of extraordinary things to attain a better GDP growth, we need not demonise radical economic transformation, but rather analyse it and remove any political or partisan emotion. Let's embrace its merits as one of those multiplicity of extraordinary things we need to do.
Xolani Qubeka is the founder of the Small Business Development Institute, and chairperson of Redis. He writes in his personal capacity.