Tuesday, April 15, 2014

ANC fights on against its worst enemy: business

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15 Apr 2014 | Tony Leon | Original Publication:  BDlive

The acquiescence of the National Planning Commission as its plan dies a slow death is strange, writes Tony Leon

IN APRIL 1962, President John F Kennedy, at a dinner he hosted for the then living Nobel Prize winners of the western hemisphere, said: "I think this is the most extraordinary collection of talent, of human knowledge, that has ever been gathered at the White House, with the possible exception of when Thomas Jefferson dined alone."

Jefferson, the third US president, had an extraordinary and wide-ranging intellect. He left to posterity many aphorisms that seem far more contemporary than when they were written more than 230 years ago.

For example, he wrote: "When people fear the government, there is tyranny; when the government fears the people, there is liberty." Just how much South Africa’s ruling party has to fear from the people will be revealed when the votes are counted after May 7. If opinion polls are accurate, it need not fear much at all.

For South Africa’s private sector, a different set of expectations applies, and the verdict against it has already been delivered, apparently.

It is the enemy, or at least that section of it that has not submitted to the government’s itch to control it.

Anthea Jeffery of the South African Institute of Race Relations has produced research that examined 11 items of legislation in immaculate detail — from tightened rules for black empowerment to controls over mining and offshore gas and oil exploration to mandatory gender quotas for the boardroom and reduced protection for foreign investors and local property owners. She headlined her research, "the ANC government’s war on economic rationality". The Economist magazine — presumably well read by the foreign investors desperately needed to realise the National Development Plan’s vision of 5.4% economic growth, as opposed to our less-than-2% present growth path — weighed in.

Its verdict was harsh, but accurate. Last week, it opined: "These business-bashing bills are part of an ominous trend … the common thread is that they weaken property rights, reduce private sector autonomy, threaten business with draconian penalties and undermine investor confidence."

Undeterred by any such warnings, two weeks ago, the Department of Rural Development and Land Reform made its own contribution to this heady brew. It proposes that all farmers (or the fewer than 40,000 large-scale commercial farmers remaining) will be required to hand over 50% of their farmland to their workers. Never mind the constitution and food security, the real deal here was the process followed in this "final policy proposal" or, in this case, not followed.

At the weekend, I met one of South Africa’s largest and most politically progressive farm owners. Like other more thoughtful members of his tribe, he told me the department had engaged with him and other farm owners and they, in turn, had made very significant proposals to create a more just land order in South Africa. "And," he advised, "when the department published their new proposals, not a single item had been changed from the original draft."

More or less exactly the same happened to the oil and gas provisions, despite the lengthy process of parliamentary engagement, of the controversial Minerals and Petroleum Resource Development Amendment Bill (disclosure: I consult in this sector).

On this page recently, Rhodes University’s Gavin Keeton pointed to a striking fact: South Africa’s still relatively good standing in the international benchmarked global competitiveness index is almost entirely attributable to the "spectacular performance" of the private sector’s contribution to it and, conversely, is weighed down by the underperformance of our public sector, other than the Treasury and the Reserve Bank. And then along comes Public Enterprises Minister Malusi Gigaba, whose only regret is that the government ever privatised anything! Go figure this one out.

But competing for space in the parallel universe, heedless of how the real world really works, up comes African National Congress secretary-general Gwede Mantashe. He informed a business gathering last week that the government’s solution for small business was to create a new ministry. As if the installation of yet another layer of bureaucracy will assist. As Clem Sunter, who knows something about the practice of business and the scenarios for a better future, archly noted: "In most countries, a red carpet is rolled out for investors. In South Africa, we roll out the red tape."

As for the much commented-upon loud silence of South Africa’s business leadership as its interests get trampled in the dust of the legislative and regulatory steamroller, perhaps the fact that more than 60% of the top JSE-listed firms earn most of their revenue offshore provides an explanation. The acquiescence of the members of the National Planning Commission as its plan dies a slow death by a thousand cuts of legislation and regulation is stranger. If we do not have a clear explanation for the silence of these lambs, Jefferson at least left us a warning. He said: "All tyranny needs to do to gain a foothold is for people of good conscience to remain silent."

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