How I'd fix SA - free up the economy

It was he who taught me about the "four legs of the retail table". According to this simple but useful principle, each leg needs to be strong to balance the table for consumers. The four legs of his table were administration, merchandise, advertising and social responsibility, and a company's people.

In the years that followed, I applied Trujillo's "four legs of the retail table" to my own company, and from that have flowed many of the lessons a long life has taught me.

My career has also been greatly influenced by Prof William Hutt, who taught me when I was a commerce student at the University of Cape Town. It was from him that I learnt the primacy of the customer in economic relations and the principle of consumer sovereignty. And drawing from his teaching, I believe the welfare and prosperity of the individual "sovereign citizen" should lie at the very core of government.

I believe Trujillo's analogy, too, may be applied to the SA situation, in which four elements of governance assume equal importance if the equilibrium of our society is to be maintained.

Where Trujillo and Hutt spoke of consumers, I transpose the voter - regardless of his or her party of choice. My hopes for SA have always been firmly embedded in my conviction that we are an extraordinarily resilient, innovative and talented nation. With government, I believe our people are entitled to a better life through access to opportunities. But to achieve this, we need to free the economy from the restraints that impede entrepreneurship and job creation. We need greater flexibility in the labour market, so more young people can take the first step toward a rewarding livelihood. Similarly, we need to radically improve the quality of education if an entire generation of youngsters is to escape the trap of crime and despair.

Government's mid-term review, published this month, quite rightly says that youth unemployment remains a serious challenge and points out that employment levels are still below those of 2008, before the recession.

Nor should we underestimate the impact of the rigid employment regime on the public sector, where taxpayer-funded services are considerably less efficient and effective than they should be, due to the cumbersome disciplinary and corrective procedures that protect the civil service from rigorous quality control.

Trujillo's insistence on sound administration translates naturally to the national scene. Our ability to collect taxes efficiently is one of the areas where the world holds us in awe, but we must learn to spend these revenues effectively, eliminate the waste and corruption that compromise the impact of budget allocations, and cut the red tape in order to create more businesses and let natural entrepreneurial spirit prevail. This will not only help grow the economy, but will move many South Africans away from a social welfare dependency that is unsustainable in the long term and into jobs that give self-respect, reduce their dependency on the state and broaden the number of taxpayers from its worryingly tiny base.

As I write, the rand has dropped to a three-year low against the dollar and is at its weakest against that currency since mid-2009. This should create welcome opportunities for SA exporters, but we continue to squander such advantages because of high input costs - in electricity, labour and municipal charges - poor productivity and bureaucratic red tape.

Given the chance, I would establish a commission of senior and experienced business leaders to advise government on those practices, statutes and policies that need to be scrapped if the economy is to grow at a rate that is able to generate employment and expand our tax base.

Merchandise - or the material with which we shape our society - would see a reduction in the number of provinces, to lighten the heavy hand of bureaucracy that is stifling our economy.

Provincial administrations with less capacity to create obstacles in the path of business, with reduced salary bills and with fewer opportunities for corruption, would relieve the country of a burden it can ill afford. In their place, we need a state administration that promotes competence and free enterprise, does away with cronyism, facilitates investment and champions the private sector as a natural ally. We simply have to find ways of accelerating our poor rate of economic growth and I believe it is realistic to aspire to a growth rate of 6% or more. But this will be achieved only if we greatly improve the machinery of government and experience the quality of political leadership that dares to make the bold decisions called for in the National Development Plan.

If I ran the country I would not only give the impression that I had actually read the plan, but would lead the nation in absorbing its analysis and incorporating its eminently sensible recommendations into national policy.

It is difficult to avoid the conclusion that opposition to minister Trevor Manuel's proposals is driven not by economic or social imperatives but by an ideological mind-set at odds with private-sector-led growth.

As a nation, we should reflect seriously on the latest Transparency International report, in which SA's ranking has dropped even further, suggesting that corruption is getting worse, despite government's stated commitment to tackle it (and let no-one argue that corruption is the preserve of the public sector).

If I had the power I would establish a high-powered anticorruption body, ideally a section 9 institution, and quarantined from political or commercial interference.

Finally, for advertising and sales promotion, I would lay considerable emphasis on the need for open, transparent government that is committed not to the belittling and circumvention of the constitution, but to the realisation of all the freedoms, rights and obligations that it encompasses. This requires Nelson Mandela's style of leadership, which inspired in us a sense of hope and determination to succeed.

But, above all, I believe we need a completely new attitude to the private sector, an attitude that trusts and acknowledges the contribution that business makes to our society as contributor to the national fiscus and as investors in social upliftment programmes.

The negativity towards the private sector often displayed by too many of our leaders is not helpful. It acts as a discouragement to those who have a contribution to make to the advancement of our national objectives, if only they were made to feel more welcome and appreciated.

Tony Bennett sang that if he ruled the world, every head would be held up high. I, too, look forward to a time when every South African, free of poverty and hunger and with a rewarding job, will take pride in what our country has achieved.

If I were leading this country, I would concentrate on the four legs of the national table and treat citizens as sovereign, instilling hope into the minds of all our people and inspiring faith in the future of a country that, despite its numerous challenges, remains a place of boundless potential and opportunity.

Source: Financial Mail