Top 8 #WEF2017 issues as SA heads to Davos
Eight issues are prevalent as we head to Davos for the World Economic Forum (WEF) 2017. The Sekunjalo Group has, for the past years, headed annually to Davos for the powerhouse WEF, led by its chairman, Dr Iqbal Surve.
Each year Davos wrestles with a set of different issues. This year is no different with a number of key themes meant to drive the conversation: the Fourth Industrial Revolution; Responsive and Responsible Leadership, Global Collaboration; Building Positive Identities, Fixing Market Capitalism and Restoring Economic Growth.
In this wide-ranging interview with Business Report, Dr Surve outlines the eight top of mind issues that the Sekunjalo Group of Companies takes to Davos this year:
1. Shoring up foreign direct investment in SA
Foreign direct investment (FDI) is what will make the biggest impact on our economic fortunes and attending WEF gives South African business leaders the opportunity to campaign for this.
In the 10 years that I have been attending WEF, I have relentlessly pursued the story of a country that is worth investing in.
Going to Davos gives us a unique opportunity to tap investors, change the narrative about South Africa and position the country as a good investment opportunity. It is FDI that will lead to job creation, stimulate the economy and build our cities.
The annual growth in real FDI is less than 2 percent. Foreign portfolio investments have grown substantially by more than 6 percent per annum over the last decade. Most other emerging economies experienced the opposite, with FDI outgrowing portfolio investments. In order to reach the goals of the National Development Plan 2030 (NDP); South Africa will have to attract FDI of at least 6 percent annually to achieve a sustainable economic growth rate of the targeted 7 percent per annum, and to reduce the employment rate to at least 12 percent from the current 26.5 percent.
2. SA unlimited
Uniting the South African business community behind a positive story of South Africa as an attractive investment opportunity. The positioning of South Africa as a risk and a global narrative of a country floundering under a corrupt government, not helped by a scandalous Time Magazine article improbably listing South Africa as one of the top 10 risks to the world this year has to be shifted.
Business leaders attending Davos have to sing from the same hymn sheet, that of a South Africa that is positive about its future, focused on growth and development and trying to steer a new course after decades of disenfranchisement.
The story of South Africa that we tell at Davos must be one of this country being one of the leading financial hubs in the emerging market sphere, with one of the best and sophisticated banking systems in the world.
South Africa offers world class tourism destinations, a growing young population, vast amounts of scarce mineral resources such as platinum, palladium, iron ore, as well as a logistical network supporting trade to Africa and the rest of the world, with ports, airports and main road infrastructure and logistical warehousing.
Read also: WEF 2017: Diversity of voices crucial
The other story that we have to unite behind at Davos is that Africa is being earmarked as the fastest potential economic growth continent, and economists predict that Africa could surpass China with a growth rate beyond 7 percent in the next decade. Africa’s gross domestic product growth for this year is predicted at 4.5 percent, the US at 3 percent and Europe even lower.
3. Responsible leadership
Doing good business through responsive and responsible business leadership. African philanthropy is nothing more than bringing the private and public sector together to pool resources; we need to incentivise and unlock public investment ensuring systemic reform and long-term sustainability.
To have the greatest impact, we also need to build government capacity and shape stronger national systems that can sustain progress. Moral imperative is not enough.
Without robust systems and government commitments, we are in danger of just funding an ideology.
4. Inclusive vision
Engaging in the conversation on how to beat back populism, protectionism and nativism by constructing a positive, inclusive and plural vision of the future. Populism thrives on an opposition to diversity and a rejection of the so-called establishment.
The real danger for South Africa at the moment is riding the populism wave on the back of the campaign against corruption as a mask to unseat a democratically elected government. Uniting discrete and even opposing political structures behind populist campaigns is what gave US President-elect Donald Trump the keys to the White House.
With the rise of populism, protectionism, and nativism, the world has come to a historic crossroad where one road leads to war, poverty, confrontation and domination while the other road leads to peace, development, co-operation and win-win solutions, Jiang Jianguo, the head of the State Council Information Office said ahead of President Xi Jinping visit to Switzerland and his first WEF attendance.
5. Creating jobs
Addressing rising income inequality through job creation. Job growth in South Africa has stalled. The responsibility is not only that of government.
Indeed, the responsibility rests with the business community in its smart and prudent choices to stimulate the economy and unlock jobs.
The only way to create sustainable economic growth and job creation is to attract sustainable direct foreign investment in industries such as the automotive, beneficiation of minerals, agri-procession, black industrialisation, alternative energy, infrastructure and logistics and telecommunication sectors.
6. Understand the power of technology
Understanding the advancements in technology robots, artificial intelligence and other developments - the impact of this on the economy and growth and development of our country and our responses as business leaders.
There is no beating back the rapid advancements of our age.
The Fourth Industrial Revolution will not be held back because we fear job losses. Rather the imperative is for us as business leaders to look at how technology can be managed to grow jobs and the economy.
The 2017 Global Risk Report from the WEF names artificial intelligence and robotics as the technologies with the greatest potential for both positive and negative consequences, including exacerbating the threat posed by hacking.
Read also: #WEF2017: Technology will disrupt labour
Without effective governance and retraining of workers, technology may destroy more jobs than it creates at a time when cash-strapped governments can no longer afford historical levels of welfare.
7. Domestic focus
Engaging on the emerging debate on cityness versus nation states as a response to the growing global anxiety about globalisation, populism and exclusionary policies of new world leaders such as Donald Trump.
Benjamin Barber, the architect of the Global Parliament of Mayors, sees nations as “parochial and narrow-minded”.
They are adversaries of change and progress, while cities are conservators of multiculturalism, tolerance and open society, he says.
What this means for us is a renewed focus on building our cities, our city identities and delivery of infrastructure and services to our citizens at local level. Barber is quoted in another think piece ahead of Davos: “Populism is Poison. Plural cities are the antidote” by Robert Muggah and Misha Glenny
8. Realise the impact of globalisation
Focus on infrastructure (broadband and transport); education; empowering local government; and growing public sector investment.
In her excellent paper ahead of Davos, Diane Coyle, Professor Economics at the University of Manchester sets a framework for what needs to be done to address the reality of people feeling they have been left behind by globalisation.
The antidote, she says, to the global anxieties about globalisation lies in taking regional policy more seriously by focusing on infrastructure, education and strengthening local government.
People’s fears and unhappiness are viscerally attached to what they do not have and a response to this can only be done at local level. The more city governments help people access jobs and opportunity, the more we educate young people for the jobs of the future and the more we encourage public sector investment on growing local economies and access to opportunities, the more we beat back the rising tide of global anxiety.
Sekunjalo is the shareholder and partner to Siemens, Saab, British Telecoms and Nokia on the African continent. Dr Surve is a regular Davos and Summer Davos participant, as an attendee and speaker. He is the past chairman of the World Economic Forum Global Growth Companies advisory board as well as vice-chairman of WEF Global Agenda Council for Emerging Multinationals.
He also serves as the Presidential appointment to the BRICS Business Council and is chairman of the SA-Saudi Arabia Business Council. He is a B20 (part of the G20) Task Force member on Responsible Business.
For ongoing coverage of #WEF2017, read Business Report and www.busrep.co.za.