Growing economy only way to save SA, say business leaders

 

Growing the economy is the only way to transform it and reduce inequality‚ business leaders said on Tuesday night writes Katharine Child.

But they warned that the current ANC leadership race would detract from real conversations about how to improve the economy and create jobs.

Nedbank CEO Mike Brown‚ former finance minister Trevor Manuel and AngloGold Ashanti chairman Sipho Pityana were speaking at Pretoria University’s Gordon Institute of Business Science.

Brown warned that not only had business been unsuccessful in influencing government policies to be friendly to job creation‚ the next six months of the ANC leadership contest would drown out the ideas of businesses.

“In the next six months nothing is going to get heard. There is an awful lot of political noise. We [business] may have to wait a while before we are heard‚” he said.

The ANC is getting ready to elect its new leader in December.

Brown had another warning. If the economy didn’t grow‚ populist policies would win elections‚ but people would not get richer. South Africa‚ hit by growing unemployment‚ is experiencing a recession‚ which is defined as half a year of negative growth.

He said wealth redistribution in countries like Zimbabwe‚ Venezuela and Cuba‚ had shown that seizing wealth without creating enough for everyone had not led to the population becoming richer.

“A populist policy will get votes‚ but it will not create sustainable jobs or the redistribution of wealth.”

To reduce inequality‚ economic growth was needed.

“You would have thought it is obvious in a country that has a growing population that in order to develop an equitable society‚ we need to grow the cake [economy].

“If it is a diminishing cake that we are seeking to share‚ we are going to fight amongst ourselves.”

But he admitted the country was in a recession.

Pityana warned of further job cuts in the mining industry. These were not done lightly‚ he said‚ and mines looked everywhere else but jobs to cut expenses. In the end‚ some people had to be retrenched or the entire business would collapse.

But he said growth was essential for creating an equitable society and reducing unemployment.

“The exclusion of people who feel marginalised is the greatest threat to the sustainability of our nation. Quite simply‚ we have to get the economy to grow.”

Manuel said from 2000 to 2008‚ when the economy grew‚ major poverty reduction took place. But then leaders who were not interested in policies to grow and share the economy took over the country.

 

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