Many people, but not shrewd investors, go into a decline every time there is an economic crisis. Many see the end of the world looming because international markets look sick, or the Rand loses value or commodities become less sought after.
Sensible investors know that just as markets go down, they go up again and in the longer term people who know what they are doing make money because they see setbacks as opportunities. They use the business cycles to clear the decks, ready for the next upswing.
South Africa, along with a number of other emergent markets, has felt the brunt of the latest crisis. We could now all sit transfixed, fearful for the future, expecting the worst and doing nothing to prepare our country for better times that will come if only we get our priorities right and follow sensible policies.
My advice to President Zuma is to focus on the single most important thing facing South Africa: putting the economy right. He and his cabinet and his advisers should focus on that to the exclusion of almost everything else. The question to be pursued with single-minded intensity must be: how do we get the country to produce jobs - any jobs? And that means going for growth.
Apart from more and more public sector jobs which are unaffordable, the only way jobs can be created is by the private sector through a growing economy. A rising tide will enable all to rise, reducing poverty and inequality. A five per cent growth rate will double our economy in a few years. The forecast growth rate of less than two percent, if we are lucky, means that millions more youngsters will be added to the ranks of the jobless. This is a criminal waste of good human material and it endangers our society.
President Zuma will be out of office by 2019 and his power is already starting to wane. If he wants the abiding memory of his rule to be the Nkandla story, he and the cabinet should carry on as they are now. If he wants to be remembered as the president who started putting South Africa’s economy back onto a growth path, now is the moment for action. He might be amazed at the reaction of people in his own party and many others outside it. A determined lead by him would change the climate of pessimism overnight and lead to a better South Africa.
The first decision should be a pragmatic rejection of ideologies and fancy theories. What is needed is policies that work and that are diligently applied by every cabinet member and every senior government official. Policies that work are those that increase growth, increase investment, local and overseas, and increase jobs. Any policies that don’t produce the goods must be dumped. Those who second-guess, insisting on clinging to outdated and failed policies, dogmas, ideologies, even cherished ones, must go.
The trades unions will not like this approach at first. Tough. They are less and less important as time goes by. This country is becoming less of a manufacturing nation; less of a mining nation; agriculture is mechanizing; services are growing and COSATU is now a Public Service union, more or less. They need to learn that growth will do more for their members than anything else.
The Communists will not like it. Tough. The only Communists in the world who are riding high, leeching on the backs of ANC voters, are Dr Blade Nzimande and his friends who overpopulate our cabinet. Most of them in their personal actions and lifestyle are about as communist as my Aunt Fanny but they feel the need to push and manipulate and bend government action to move the country towards the failed socialist ideology of the 1950s, rather than the declared economic policies of the ANC. And they are making our country fail.
Investors will like it if they are convinced that President Zuma is serious about making the country an attractive destination for investors. They are not charitable institutions. They need to make a profit. If that need is respected and assisted, they will invest here.
We are the most resource-rich country in the world. Resources are in a ghastly slump at present. But that will not last forever and investors in mining know that the wheel will turn and good profits are possible in the next boom provided the investment is made now or soon because those investments have a very long lead time, sometimes of a decade or more.
Stop the political foefies like the Glencore licence withdrawal- done to punish them for saying they are losing money and need to go into business rescue. Were they lying? By now it is clear they were telling the plain truth.
Stop the nonsense like dreaming that the government must have a larger ownership of mines so that jobs can be saved. Dream on. The surest way for mines to close completely is if the government and its cadres get anywhere near running the mines. Many mines are now for sale because they are not profitable. Does anyone truly believe government can run mines profitably?
Stop the nonsense about a developmental state. We simply do not have a Public Service remotely capable of running a so-called developmental state. This is not China. SAA, Eskom, the Post Office, PRASA, SABC and many state owned entities teach us that the less government has a say in running businesses, the better.
The government must govern; it must defend the constitution; it must create a favourable climate for growth; it must help the private sector (properly regulated) to flourish. Then we will see jobs created. Then the newly –employed will remember the Zuma era much more kindly. And the legacy will not just be about Nkandla.
Douglas Gibson, a former Opposition Chief Whip and ambassador to Thailand is a writer, political analyst and public speaker.
