Business ‘the key to success’

PROMINENT economist Raymond Parsons is convinced that organised business holds the key,Picture: Supplied

PROMINENT economist Raymond Parsons is convinced that organised business holds the key for South African economic growth by taking the lead to arrest weak governance, policy confusion, state capture and private sector collusion.

In his latest book launched last week, Good Capitalism, Bad Capitalism: The Role of Business in South Africa, Parsons called on the private sector to cement a bond with the government to ensure solid economic growth. “There is no doubt that the increasingly fragile relationship between business and the government over the years is one of the main reasons for the organised business sector in SA losing its common purpose and much of its clout.

“However, there are inspirational individuals in government, business and civil society who are trying to get people to rally behind the idea of a new, inclusive and resilient economic future for the country,” Parsons writes. “This is the idea Cyril Ramaphosa is promoting.

“He and many others realise that collective effort is required and neither political nor commercial interests should be allowed to get the upper hand.” The book says that SA still has resilient institutions to rely upon and organised business as a result, still has a crucial role to play in putting the economy back on track and becoming a vocal agent of change.

Business has been too passive for too long and has often displayed “tacit acceptance of policies over which it was not consulted and which had obvious shortcomings”, Parsons said. He said the business sector had a wealth of practical knowledge of what was happening at the coalface of the economy, what worked, what did not and what could be learnt from others’ experiences.

He called on so-called “apex organisations” such as Business Leadership South Africa (BLSA), the Chamber of Commerce and Industry (Sacci) and the Black Business Council (BBC) to show unity and return the country to a growth path.

Parsons said that government-business cooperation driven by external events like the G7 meetings, the World Economic Forum gatherings and the interaction with credit rating agencies is valuable but nonetheless ad hoc. “What is needed are national actors from the business world who are able to speak for business as a whole, not just parts of it, regularly over the long haul. “Organised business in SA therefore needs a degree of rationalisation and streamlining in order to enlarge its sphere of influence and to project a stronger voice on behalf of business,” he said.

This would enable business to engage more robustly with the government to help to shape the national agenda, as well as offer creative solutions. What we have at present in SA, Parsons said was “a cacophony of acronyms” in organised business, which is very confusing.

Some analysts agreed that efforts to bring business together with the government and labour had taken a promising turn lately, but is yet to reach the level where the country can see almost 9 million people that are now unemployed absorbed by the labour market.

Last Friday’s meeting of directors where Finance Minister Nhlanhla Nene delivered a key address to the country’s most prominent business leaders did not reveal much in terms of how local companies are planning to invest in the economy.