Building capacity to help Africa trade better

SA fails to clarify its domestic and foreign polices


SA fails to clarify its domestic and foreign polices

SA fails to clarify its domestic and foreign polices
Michael Spicer, chief executive of Business Leadership SA. Photo credit: iafrica.com

Though Africa is rhetorically South Africa’s first foreign policy priority, in reality it runs a poor second to the rest of Brics (Brazil, Russia, India and China), the former Business Leadership SA chief executive Michael Spicer believes.

And the government’s theoretical commitment to African regional integration is contradicted by the protectionism inherent in its Industrial Policy Action Plan – a subset of its development state concept.

Many people traced the country’s “reputational decline” to Polokwane, the 2007 ANC conference at which Jacob Zuma wrested party leadership from then president Thabo Mbeki, Spicer said in a keynote address to the SA Institute of International Affairs at its 80th birthday celebration.

But “the seeds of today’s parochialism and narrow racial nationalism can be traced back to the second Mbeki term, and particularly to the 2004 10-year review, which brought to the fore the ideology of the developmental state”, said Spicer, who is on the institute’s council.

Although never clearly defined, the developmental state was “essentially a garbled form of the south-east Asian experience of the post-war period without some of the key drivers, such as a professional, competent state”.

South Africans had always been guilty of exceptionalism, believing the country was unique and could not learn from others, Spicer said.

“The full flowering of this parochialism and exceptionalism, with the added ingredient of celebrating mediocrity and scorning clever (read educated) South Africans, black and white, has been a product of the post-Polokwane years.

“The contradictions of this posture are nowhere more clearly to be seen than in relation to South Africa’s Africa policies.

“The natural market and hinterland for South Africa, the mother continent, is rhetorically first in South Africa’s foreign policy commitments, but runs practically well behind the obsession with the Brics nations.

“First embraced as a counterweight to the West and as a political device to help rebalance the global institutional architecture – certainly in need of reform in the much-changed circumstances 60 years after the founding of the UN and the Bretton Woods institutions – the global financial crisis has cruelly exposed the economic limitations of the Brics.

“Not only [do] the members [have] competing trade and economic interests, but India, Brazil and South Africa have all turned out to have deep economic structural problems, which must be faced before their growth engines can be re-ignited.”

Spicer said it looked, though, as if newly elected Indian Prime Minister Narendra Modi might be setting out to tackle his country’s structural problems.

“Meantime, South Africa’s claim to leadership in Africa has not been matched by a determined attempt to root out the xenophobia that has been stoked by our regrettably low post-2008 economic growth.

“That, in turn, owes something to South Africa’s confused posture on regional integration: the purpose of such steps in economic terms is to facilitate the easier, quicker and cheaper flow of factors of production across boundaries in order to create larger markets, which more compellingly attract investment and production, thereby benefiting the population of the larger whole,” Spicer said.

South Africa’s market was only 52 million, versus Brazil’s 200 million, India and China’s 1.3 billion each, Indonesia’s 247 million and Nigeria’s 173 million. But the Southern African Development Community (SADC) countries together constituted a market of over 250 million.

“Unfortunately, while there are welcome steps to bring together the southern and eastern African countries represented by SADC, Comesa (Common Market for Eastern and Southern Africa) and the East African Community into one larger regional entity, business people are often struck by the fact that this is essentially the product of political rather than economic thinking.

“Certainly, many of South Africa’s economic policies seem to be going in the opposite direction. To take just one example, the protectionism inherent in the Industrial Policy Action Plan, a key subset of the developmental state concept, is essentially antithetical to regional integration.

“And… too little attention is paid to the nuts and bolts of regional integration – common visas, open skies and trade facilitation.”

Spicer said the anti-business stance of much of the ruling alliance was preventing the government and business from joining forces to present a “Team South Africa” project in Africa, rooted in clear economic diplomacy.

This contrasted with the co-ordination between business and political elites in many of the other countries that South Africa was competing with in Africa, as well as China, India, Brazil, Russia and Australia.

Despite this lack of co-ordination and the confusion of policy, South African businesses had invested extensively in the rest of Africa. But they could have done much better with a clear economic diplomacy strategy.

Spicer warned that South Africa now needed to confront the challenge of Nigeria, which had just overtaken it as Africa’s largest economy.

Nigeria had a naturally more dynamic and entrepreneurial culture, an unashamedly capitalist orientation and a much larger and rapidly expanding population, which is forecast to reach 440 million by 2050 – although South Africa was fortunate not to face the same religious terror and conflict.

“The question is whether South Africa’s leadership is up to the challenge or whether it will retreat into a myopic parochialism,” he said.

He also blamed business for the failure to establish an effective Team South Africa.

“Aside from the legacies of the past and the racialisation of business organisations, often driven by crony capitalism and the vested interests of narrow black economic empowerment, business leaders and… organisations have failed to articulate clearly their interests and a domestic and foreign strategy, notably an African strategy, that would help grow the South African economy in the interests of all South Africans.”

Spicer acknowledged that he shared some of the blame because of his leadership positions in companies and business organisations. “With few exceptions, business leaders have failed to find the right balance between courageous frankness and empathetic engagement. Too many have either given up and tuned out, or been drawn into sycophantic co-option and cronyist patronage relations.”

The concepts of business unity and business leadership “seem oxymoronic”, Spicer said.


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