Success of national development plan depends on increased collaboration between business and government, says Professor Raymond Parsons
Giving a keynote address at the Steel and Engineering Industries Federation (SEIFSA) Annual Conference in Midrand today on the National Development Plan (NDP), Professor Raymond Parsons, of the Potchefstroom Business School at the North-West University (Potchefstroom Campus) and Special Policy Adviser to Business Unity South Africa (BUSA) said that the NDP might be SA's last opportunity for a long time to avoid a 'low growth trap' in the economy in the years ahead. SA had reached a fork in the road to the goal of shared prosperity. The challenges of unemployment, poverty and inequality could not be adequately addressed at current growth rates of 2 to 3% and that the SA economy needed to triple in size by 2030 on the basis of much higher rates of inclusive growth. This was the only way in which SA could have an economy that was bigger, stronger and better by then, he said.
Professor Parsons said the NDP presented a unique opportunity to inject more 'long-termism' into decision-making in both the public and private sectors, going beyond the electoral and short-term business cycle to create a more certain framework for future policy creation. He said that it was now essential, given the external and internal challenges facing the SA economy, that not only should the plan gain widespread acceptance in both the public and private sectors, but that its successful implementation would also require a high degree of collaboration between business and government. In the spirit of the NDP, the government had already indicated its desire to work more closely with the private sector, such as in infrastructural development, in order to secure favourable outcomes, and that it was now necessary for business to gear itself accordingly, said Professor Parsons.
Professor Parsons said that while there were many ways in which business was willing to 'step up to the plate' of the NDP, he wanted to concentrate on the significant role that organised business could play in representing and mobilising the business community in the matter. Business associations had flourished for many years in SA and had made a valuable contribution to policymaking in this period. The first Chamber of Commerce had been formed in Cape Town in 1804. Since then, the organised business network in SA had evolved in line with economic developments in the country, and as businesspeople felt the need to pursue certain issues on a collective basis in a changing scenario. Organised business had been especially active in the formative years leading up to 1994 and had become involved in many advisory structures, including playing an important role in the formation of NEDLAC.
In the meantime, the concept of ‘freedom of association’ had become entrenched in SA’s constitution, as part of our democratic framework, Professor Parsons said. This recognition supports the principles that make organised business possible – freedom to meet, to speak and to organise. In the business world, this keeps the door open to collectively achieve those things that no businessperson or corporate can achieve alone. In a mixed economy, such as we have in SA, the right of business to organise itself remains an essential balancing factor in policy formation. The NDP has now added, both practically and symbolically, a major new dimension to the policymaking environment for business in SA through its emphasis on consultation and collaboration, he said.
Although business had come out in general support of the NDP, Professor Parsons queried whether business is now sufficiently well organised and structured nationally, sectorally and regionally to meet the new NDP challenges and to respond to President Jacob Zuma’s stated increased receptiveness to the private sector’s role. Although there were presently many pockets of excellence in organised business, given its current fragmented nature, organised business in SA is perceived by many to be structurally weak, with insufficient political credibility to always generate enough clout. SA business associations must grapple with the imperatives of rationalisation and deracialisation within their ranks in order to extend their influence. It calls for the highest skills in diplomacy and negotiation to bridge the deep divide that still persists between white and black business in SA. We need to see the development of larger and more meaningful black-white business coalitions in future, for which involvement in the NDP could be a catalyst. Apart from forging closer cooperation between black and white business, there also has to be greater unification within black business itself. We must bring together those who belong together, if the sphere of influence of business in the unfolding NDP scenario is to be maximised, he said.
Continuing, Professor Parsons said that, all over the world business associations, like their members, have been facing a changing and more complex environment. When private enterprises change their strategies in order to become or remain competitive, their expectations of their business associations or employer organisations also undergo change. What this all means is that organised business has to constantly renew its relevance. In SA, the implementation of the NDP will invest the policy environment with a new dynamic that hopes to transform the economy significantly by 2030. Government has undertaken to steadily align its policies with the NDP. Business associations should see this as an opportunity to build their capacity, demonstrate their relevance, and increase their importance. They need to strengthen their role in effective policymaking and, where necessary, form strategic alliances or promote mergers to help translate the vision of the NDP into reality. SA certainly needs greater business unity, although the much sought-after ‘single voice for business’ is, as a prominent business leaders once said, ‘an oxymoron’.
He added that national business associations also often underestimate the importance of interaction with provincial and local governments. Despite its long tradition, the organised business network is very uneven in its coverage across the country as a whole and there are large gaps geographically. Although SA is not a federal system, there are significant points of access for business at other levels of government in this country. There are 283 local authorities and nine provincial governments with whom to engage. This is where much of the ‘delivery’ takes place and where extended cooperative action can not only help to improve delivery, but also enhance business opportunities. Business associations need to strengthen their collaboration with structures such as SALGA and the relevant state departments to mobilise business more effectively at the local level, as part of the implementation of the NDP, Professor Parsons said.
In conclusion, Professor Parsons said that the navigation and implementation of the NDP will require regular adjustment and correction within its broad framework and organised business in particular needs to be effectively coordinated at the policy level. In addition, although the NDP emphasises the need to improve SA’s global competitiveness, this needs to be concretised to enable SA business to project more successfully on the international stage. The NDP needs more active champions and it is not necessary for a business leader to agree with everything in it to recognise its importance as a confidence-building roadmap for SA’s future. The business sector is allocated a definitive role in the NDP, and without its active participation at all levels, the goals of the Plan cannot be achieved.