Letter: Leadership has chosen ideology that will have terrible economic effects - Businesslive
It has been encouraging to hear business leaders speaking forthrightly about the challenges SA faces as it attempts (at least in theory) to rehabilitate its economy.
This is not just about identifying what is wrong, but how it has arisen and what it signifies. SA’s economic malaise was well entrenched long before the Covid-19 pandemic hit or the lockdown was instituted.
The country’s leadership has all too often chosen to position itself on ideological grounds that could only have calamitous economic effects. Think expropriation without compensation, intrusive racial empowerment policy, an obsession with maintaining its state-owned enterprises for “developmental” reasons, eroding the independence of the SA Reserve Bank and the (likely) introduction of prescribed assets.
Business Leadership SA CEO Busi Mavuso's bold call to deal with the inhibitors of business confidence is therefore welcome. She correctly identified the undermining of confidence in property rights — expropriation without compensation in other words — as a key problem. “Nobody,” she said, “makes investments in assets they can’t trust will still be theirs in future. We need to conclude that debate and recommit to protect property rights so that investors have confidence that they can put their capital at risk.”
Her counterpart at Business Unity SA, Cas Coovadia, deserves credit for putting his finger on the driver behind this. The governing ANC’s proposed post Covid-19 plan “resurfaces old ideology and dogma of a significantly increased role in the economy”.
This is commendable, especially as it appears that government is looking at doubling down on the policies that have caused so much damage — expropriation without compensation most obviously among them.
In the perilous months ahead business must find a strong and clear voice to contest this.
Terence Corrigan
Institute of Race Relations