This is one of the key issues debated and discussed at a thought-leadership forum, [THE INSIDERS], hosted by Glacier by Sanlam and TIME magazine. The panel - which comprised John Mauldin, chairman of Mauldin Economics, political commentator Justice Malala, and MonteGray CEO Michael Jordaan - discussed issues pertaining to the economic and political landscape in South Africa, together with our standing in the international community.
According to Jordaan, our biggest problems are crime and our dysfunctional education system. "We're falling short when it comes to basic education," he said. Mauldin said that many countries the world over are struggling with their education system, not just South Africa. Malala agreed, saying that perception is key. "Perceptions of South Africa are not the same as they were ten or 15 years ago, or even pre-Marikana. We must manage those perceptions."
Mauldin stated that in order to attract foreign direct investment, South Africa must make it easy for people to do business with the country. "People see South Africa as a difficult place to do business," he said. "We don't only compete with Africa, we compete with emerging markets everywhere. South Africa should be opening up free trade zones and encouraging business."
Jordaan felt that competition within South Africa could be more intense. "The benefits of competitiveness include a lower cost structure and better productivity," he said. Mauldin agreed, saying that the SA economy is growing, but we need to get rid of competitive disadvantages.
Commenting on the fact that Nigeria has recently overtaken South Africa as Africa's largest economy, Mauldin re-iterated that if it is easier to conduct business there, then that is where investors will go.
South Africa currently has a 24% unemployment rate, 15 million people on social grants and only eight out of 50 million people paying taxes. Considering these figures, Malala pointed out that China is single-minded when it comes to ensuring employment and says we should be obsessed with creating jobs and making a dent in the unemployment figure.
On the question of performance, Jordaan said that growth is a decision, it's not automatic. He added that in studying common themes in, for example, Singapore and China, the same underlying factors were present. These included institutional efficiency, a skilled workforce and certainty for investors. He admitted we are under-performing and that we need an internal locus of control. "We have a negative mindset. We need to remember the successes, for example the 2010 World Cup."
Mauldin stated that South Africa has the raw talent and there are many entrepreneurs. We just need to make it easier for them. Jordaan said we should be creating special dispensations to support entrepreneurs and creating role models out of the success stories. "We're too tough on people who don't succeed," he said. "A risk culture is important." According to Mauldin, 80% of all new businesses in the US fail in the first five years. His advice to business owners is to just keep going and not give up.
Considering the large income disparities, the panel discussed how best to grow the economy inclusively. Mauldin said that equal opportunity for all was more important than equal income. Jordaan said that South Africa needs to stop talking about the National Development Plan and start implementing it.
Malala felt that, with seven million people unemployed, the economy would be a big factor in the 2014 elections. "We need competition in our elections. The idea that a party could be out of power in the next election, does focus the mind." Jordaan added that accountability was a major factor. People need to be held accountable to ensure execution.
Mauldin stated that politicians need to not only listen, but implement and act as well. In summary, Jordaan said that the future success of the country is up to each individual. "Don't wait for other people." Malala concluded by saying that we absolutely have to be single-minded about jobs, poverty and unemployment. Mauldin said that the next 20 years have to be better than the last 20 years.
