Transformative leaders needed to help SA change

The world’s leaders are going to be descending on Davos from next week to discuss issues affecting our rapidly changing world. The theme for this year’s World Economic Forum’s (WEF) annual meeting is “The Great Transformation: Shaping New Models”.

The world is affected by the European debt crisis which came about because of old models. For the first time in the history of credit rating agencies, Standard & Poor’s in 2011 downgraded the US rating from triple-A, based on the political wrangling between Democrats and Republicans. South Africa recently had Fitch pronounce a negative outlook primarily based on the policy uncertainty on the nationalisation of mines. So this highlights the need to re-examine the models that we have been following with regard to rating agencies methodologies and the sustainability of government debt structures.

Interconnectivity is shaping the manner and speed of information sharing, which has changed how business is done. Young people are at the forefront of these technological transformations and their role in the world is becoming increasingly important. They play a crucial role in shaping the agenda for the future. The Arab Spring brought down the regimes of Tunisia, Egypt and Libya within the space of a year.

In South Africa, the theme of economic transformation has been on our radar screens for years but it took more of a militant approach last year with the ANC Youth League marches. The reason why economic transformation is important is obvious, but it is difficult to implement if there is not a complete buy-in from all the players in the economy.

When the political negotiations in the 1990s took place the sticky points probably related to the economy. In order to drive the process forward, the ANC made concessions relating to the economy with the hope that the free markets would deal adequately with the issue of economic empowerment. Hindsight shows that the free markets prefer the status quo because it brings more certainty to the markets. So the results of economic transformation efforts have not fully yielded the desired outcomes.

Incidentally, this WEF annual meeting will mark the 20 year anniversary of the first public interaction between former presidents FW de Klerk and Nelson Mandela at Davos in 1992. The issue that was debated then focused on political transformation and 20 years later the issue to be debated is economic transformation, not only in South Africa but in the world.

For economic transformation to work, it is critical to understand what works and achieves the desired results and what needs to change. This requires changing mindsets, which can be more difficult. We have a short history of black economic empowerment in South Africa and changing mindsets is still a work in progress.

The mindset of those with economic power – black and white, seems to be fixated on keeping power rather than sharing it meaningfully. The consequence to this mindset is that those without economic power will grab it regardless of the results of their actions. This reveals the significance of the engagement model, which makes sure that everyone is involved in the shaping of the new model.

Transformative leadership to shape new models is required. This is a point continuously made by Dr Mamphela Ramphele in her book Laying Ghosts to Rest: Dilemmas of the transformation in South Africa. These leaders see the big picture of what we need to transform to and are able to come up with the tools needed for the journey.

So German Chancellor Angela Merkel is under pressure to sort out the EU debt crisis by the virtue of running the biggest European economy, while the young people of the Arab countries collectively provided transformative leadership.

In South Africa, who holds the transformative leadership mantle that will allow us to shape the new economic models of dealing? Only time will tell.