By Clem Sunter*
A month before his release in 1990, Nelson Mandela invited me to Victor Verster Prison near Paarl to discuss the future. He had read my first book containing the High and Low Road scenarios for South Africa. He opened the conversation by saying, with a gentle smile, that the most memorable thing about the book was not something I wrote but a quote I had inserted from Deng Xiaoping: “I don’t care if a cat is black or white as long as it catches mice.” He then questioned me intensely for five hours about what actions it would take to turn South Africa into a winning nation during the 1990s.
Fast forward to May 2006, I was asked to lecture on scenario planning at the Central Party School outside Beijing. It is the leadership academy for the Chinese Communist Party (CCP). After the session, one of the faculty members offered to show me around the school because, at the time, very few foreigners had visited the school. When I saw quotes in Chinese on one of the walls in a lecture room, I asked him to whom they belonged. He said Deng Xiaoping because when he became leader of China in December 1978, he laid down two basic conditions for life under his rule.
Firstly, China had to expand its infrastructure everywhere, including ports, roads and power generation, to accommodate a much higher economic growth rate. The CCP would play a major role in achieving this goal. Secondly, ordinary Chinese people should be allowed to create wealth for themselves. The CCP should back off in this area, contrary to what Communist ideology suggested. In 1978, my guide asserted, the Chinese economy was in nowhere land and in 2006 it was the fifth largest economy in the world. Deng had initiated an economic miracle. Now, of course, China is second to the US. It has elevated 800 million people out of poverty into the middle class.
As Mandela said earlier, it’s not what you say but what you do that counts. Vision without action is daydreaming. The two should go hand in hand if you want to get results. Despite 27 years in prison, his passion was to forge reconciliation between all the citizens here. He went on to demonstrate that in a truly memorable fashion when wearing a Springbok rugby shirt and cap, he handed the World Rugby Cup to Francois Pienaar after the team’s victory in June 1995.
At the end of the section in the book containing the quote that had attracted Nelson Mandela’s attention, I had this to say: “In South Africa, we are still fighting over ‘this-ism’ versus ‘that-ism’, when the world is moving towards’ a bit of each-ism’. That is what South Africa has to do—develop a system that works for South Africans.”
The two crossroads
It is nearly 37 years since that book was published. There were always two crossroads, and we had to negotiate successfully to be truly on the High Road in the long term. The first was political, achieved against all expectations in 1994 with a proper democratic election, followed by the promulgation of a new Constitution in 1996. it was not just Nelson Mandela and FW de Klerk who made it happen. Cyril Ramaphosa and Roelf Meyer, among others, played a critical role in the negotiation process and kept the show on the road when there were signs it might be stalling. Collectively, the two leaders and their teams completed the job. Sanctions were lifted, and South Africa was back on the world stage, conducting business and exercising diplomatic influence.
The second crossroads was economics, which is where we are today. We got rid of political apartheid, but after thirty years, economic apartheid lingers on. We cannot be proud of being called the most unequal society on Earth with one of the highest unemployment rates in existence. Thus, the question is whether the Government of National Unity (GNU) will address the challenge of creating a truly inclusive, vibrant economy with the same degree of pragmatism and inspiration that occurred in the early 1990s or whether it will descend into ideological bickering and internal backstabbing which hinders any chance of progress being made. Even a fragile GNU won’t accomplish much. You need the whole team rowing together with all their heart to win the race.
However, there is one critical difference between getting politics and economics right. In the former case, it can be done in a top-down fashion where the principal politicians of the day go into a huddle with their advisers and produce a whole new political model together. That was how it was in 1787 in the US and occurred here at the end of the last century.
In contrast, solving economic problems requires the reverse process, where the emphasis should be on listening to people on the ground as to their priorities and building structures from the bottom up to accommodate their desires. It is a far more complex and diverse activity requiring plenty of interchange of ideas between communities and politicians. The local and provincial governments are as important as the national governments in lending an ear and engaging in dialogue.
Moreover, the steps taken may vary from area to area, so they will need to be compared according to their success or failure. In short, democracy or people power is more than just giving everyone the right to vote regularly. It is about allowing people a say in how they are governed between elections and how their lives can be improved.
You might criticize this approach because consultation delays action. My response is that, with our limited resources as a country, we must do everything to ensure the moves we make have the highest possible returns. Pragmatism is as much about choosing what you will do as it is about setting deadlines. It is also about adapting your strategy and tactics as the future unfolds and you learn more about the situation you are trying to rectify.
Small business support and finance
I want to give one example of my recommendations for a practical GNU. It relates to my point to Julius Malema in February 2016 when we debated at a dinner in Cape Town. I agreed with him in making economic freedom a central feature of any future economy. It was just that I had a different definition of the phrase. For me, it was not about nationalizing the land, the banks and the mines. It was about giving township entrepreneurs, as well as young entrepreneurs elsewhere, the support and freedom to pursue their dreams of running a successful business in South Africa. Some might one day even spread their business beyond our borders and become a global phenomenon.
If I were part of the GNU cabinet, I would advocate that, besides having an effective Department of Small Business Development, the government should invite a group of successful and highly experienced entrepreneurs to become an advisory panel to the President. They would inform him of the best ways to remove the red tape and make the township economies part and parcel of the mainstream economy. Specifically, I would want them to offer advice on how to construct a ladder whereby champions of the informal sector could transform themselves into formal businesses with greater opportunities for growth country-wide.
In my recent conversations with budding entrepreneurs in the townships, the one issue that repeatedly arises is the lack of access to finance. Therefore, the top of my list would be to form a bank like the Grameen Bank in Bangladesh, which has specialized in small business loans for years without requiring collateral. They have a 95% repayment record on their loans, so that it can be done. I would also recommend that every city in South Africa should have an e-stock exchange where business owners could offer an equity stake in their business on a website and seek crowd-funding to finance their business. They could even allow potential shareholders to visit their operating base physically. Solutions would also have to be found to help small business owners in rural communities.
Conclusion
The shocking news that we lost 67,000 jobs in our manufacturing and service economy in the first quarter of 2024 signals the urgency of tackling the problem. We are at a tipping point. Either the GNU inspires us all to work together to create a better life for all, or we face the prospect of becoming a failed state full of division, disillusionment and misery.
Please, Cyril, be as pragmatic in your approach as you were last time with Roelf. Good luck. I know you can do it.
Clem Sunter – 30th June 2024
Also read:
Cyril expands SA Cabinet, adds 17 new members, drops 15
De Beer: GNU – The End Game
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