TALKS WITH BUSINESS: FIRST STEP OR LAST GASP

How serious are the partners in last week’s agreement with government?

Sphamandla Zondi

The two rounds of dialogue involving leaders of business, labour and the government about their response to the economic challenges facing South Africa is a significant show of collective leadership - but is it enough? While this agreement is important as a first step towards the serious economic reforms that are needed, whether they realise that it makes them collectively responsible for what the country becomes in the coming years, is debatable.

The downgrading of South Africa's credit worthiness by rating agencies, Standard and Poor's and Moody's, recently affirmed that the country is facing an economic crisis. If economic growth declines and unemployment grows, the country will collect less taxes and thus have a reduced pool of funds to finance growth measures, social security and the provision of basic services. We are all likely to feel the consequences of this.

We are already experiencing the decline in national mood and a growing sense of despair. One weekend newspaper described last week as the country's "week from hell". Economists embedded with big capital link this to policy uncertainty, meaning that nationalisation is not yet off the ANC agenda. Political analysts point to factionalism in the ANC and creeping political uncertainty, but there is no unanimity on whether Zuma is to blame. Thabo Mbeki thinks all ANC leadership, including his, shares the blame. Social commentators point to ever-growing poverty, unemployment and inequality with millions unable to afford even basic groceries.

Whichever way one looks at it, South Africa cannot survive this crisis without making some drastic and even unpopular decisions. Our problems have to do with the failure of the new South Africa to undertake radical transformation of the economy and the social compact through which business, government and civil society agree on how to change the country's course for the better. This is why I am sceptical about the outcomes of the dialogue on the state of the economy that Jacob Zuma convened last week.

Contrary to a common view, I believe Zuma has shown some political leadership in the aftermath of Marikana, appointing a judicial commission of inquiry, meeting Lonmin miners directly and convening this high-level dialogue with big business (both white and black), organised labour and ministers in the economic cluster to discuss the country's economic problems. That this has not been adequate is obvious, but no government can resolve our issues alone; so, the governmental leadership we need is that which will build a strong social compact in favour of inclusive growth and poverty eradication. Zuma is waking up to this. He convened the first dialogue on October 12, where the partners agreed to improve private and public investor confidence in the economy through collective and individual action, to encourage the use of collective bargaining to deal with worker pay grievances and to allow law enforcement to deal with criminality. They affirmed the values of the Constitution, which protect the rights of workers and citizens alike. Importantly, they committed to work towards inclusive growth and poverty eradication.

When they met again last Wednesday, the parties put together a common response document in which the most important point made was that they had "one voice, one message and strong confidence in our capacity as a society to address the immediate challenges we face". The measures outlined - which include the normalisation of industrial relations in the mining sector, the call for workers to return to work and the agreement that the rise in executive pay needs to be clipped - are unachievable unless all partners believe in the capacity of South Africa to weather these storms, unite and grow again.

The task of rescuing the country is no longer just the government's. If things do not change, it can no longer be Zuma's failure, but that of all the government's social partners.

But it is very clear that this pact must still take root in each of the constituencies. Over the weekend, business and union leaders were still apportioning blame, mostly to the government, meaning they do not yet understand the implications of agreeing on a collective response. On the plus side, it is positive that all social partners realise that they need each other. The agreement reached is not radical and will not do much to undo inequality and poverty, but it is a positive start.

• Siphamandla Zondi is the executive director of the Institute for Global Dialogue, but writes in his personal capacity.