In the closing session of the Johannesburg session of the GIBS Business Day Economic Outlook Series 2012 delegates tapped into a live feed from Davos, where world leaders, politicians and commentators are gathering to discuss the precarious state of Europe, the world economy and the year ahead. During the course of a full-day programme at GIBS’ Illovo campus, delegates heard and debated the opportunities and challenges emerging out of the unfolding events in Europe and the slowdown in developed world economies.
Opening proceedings, Business Day Editor Peter Bruce and Abdullah Verachia, Programme Director of the GIBS India-Africa Business Network, set the scene for a day of at times contrasting and sometimes controversial views. Hot topics included:
• The perceived lack of political will to fix education in South Africa.
• The call for free education – particularly at FET college level – nationwide.
• The decline in mining production since 2003.
• How South Africa can tap into the mobile ‘gold rush’ and harness innovation.
• The lack of trust between government and business.
• Whether organised labour is, as Efficient Group Chief Economist Dawie Roodt claims, “the biggest monopoly in South Africa; preventing the unemployed from competing with (union) members.”
Economist Chris Hart, chief strategist of Investment Solutions, pulled no punches both during a discussion on the macroeconomic landscape in South Africa as well as in tandem with Investec Group Economist Annabel Bishop during the closing panel discussion. In contrast to last year’s outlook session, during which the potential for Africa was a recurrent theme, the 2012 outlook was more pragmatic in tone and, perhaps dampened by events in the Northern Hemisphere, concerned with solid foundations, policy stability and, to use rugby parlance, getting the basics right.
For Hart, enabling policies which encourage saving and small business development were critical. “Without savings you will not get growth and if savings are depleted you will run into problems,” he stressed. But with such a small tax base in South Africa – 5.9 million registered tax payers in 2009-10 out of an estimated 13.1 million in work – the squeeze was invariably having an impact. This, said Hart, was hurting job creation because “the only way to increase jobs on a mass scale is through small business. And it’s the one thing which we (through policies and legislation) appear to be trying to avoid.”
Along with job creation, social development and combatting inequality, another crucial thread running through the day was the need to cut red tape to allow business, and particularly small business, to flourish in South Africa. According to Dr Grant Hatch, senior executive, strategy: Accenture SA: “Our restrictive policy environment makes it harder for companies to survive in South Africa. This is a problem. Government needs to make it easier for SMEs.”
That said, a later session on the opportunities and challenges around public-private sector engagement, revealed just how far apart the worlds of government and business have drifted. Dr Miriam Altman, a commissioner in the National Planning Commission, made a strong appeal for combatting the “psychology of a downward slide” perpetuated by “misinformation” in the media. She called for all strands of society to engage in debating the NPC’s Vision 2030 document.
That said, the general consensus was clear: The time for talk is over. We need to act. And fast. If we don’t we risk falling into a category of economic outlook which Cannon Asset Managers Chief Investment Officer, Adrian Saville, termed PAFTOTY. “That well-known economic term meaning Pissing Around For Ten or Twenty Years.”
It seems government is in accord too. Speaking from Davos, Finance Minister Pravin Gordhan put it this way: “We have a 2030 vision emerging and a New Growth Path. We have to go out there and do it.”
Join us in Cape Town (27 January 2012) and Durban (31 January 2012) to dig down into the heart of the matter and debate the outlook for 2012 with leading experts.
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