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Prepare for the worst and innovate

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Prepare for the worst and innovate

16th December 2011

By: Terence Creamer
Creamer Media Editor

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As we bid farewell to 2011, which seemed to pass at a more unseemly pace than usual, many of us will be looking towards the start of 2012 with a sense of unease. The macroeconomic and political outlook in many territories appears grave, if not depressing. At this stage, few would be arguing, therefore, with the notion that next year is likely to be tough.

But given that confidence is a rare commodity and optimism is ebbing, what should South Africa be doing to prepare for the worst, while not blinding itself entirely to the opportunities that the environment could still throw up?

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The answer, I believe, lies in fixing our focus firmly on those issues that are within our power to control.

In other words, actually delivering on the capital budgets of government departments and State-owned companies as intended. Dealing decisively with unnecessary red tape. Showing diligence in implementing the already agreed trade facilitation mechanisms that could unlock trade and investment in the Southern African Development Community. Cracking down firmly on corruption and criminality, which are increasingly threaten- ing the country’s standing as an international investment destination. Implementing and monitoring the skills, basic education, local procurement and green economy accords signed under the New Growth Path, while seeking to forge a larger social compact between government, business and labour on the reindustrialisation of the South African economy.

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It would also be helpful if South African corporates, which have deleveraged and are cash flush, showed a willingness to risk some of those cash reserves on fixed investments, or training schemes that might not deliver short-term returns, but which have the potential to stimulate the economy in the short run and lay the foundations for growth when the clouds eventually lift on the business climate.

That said, there is also little question that government has to take the lead in efforts to ensure that the country does not again fall victim to the recessionary conditions elsewhere, as it did during the earlier phases of the crisis, when around a million jobs were shed.

Most of its interventions should be geared towards incremental improvements. But there is arguably also space, given the state of the world economy, to pursue some bold innovations.

On this latter point, it might well be worth drawing on some lessons of innovative governance practices emerging elsewhere.

For instance, what is to stop South African provincial leaders from emulating the inspirational example of Nitish Kumar, who, through understated diligence and a zero tolerance for corruption, seems to have made remarkable progress in improving the workings of government, as well as the economic outlook, for the once lawless Bihar State.

And what about some of our municipalities taking a leaf from the extreme transparency experiment currently being pursued by Albuquerque mayor Richard Berry. The city’s website now contains the names, salaries and benefits of each of its more than 6 000 employees, all vendor contracts, expense reports and more. Berry says he aims to make Albuquerque a leader in municipal government transparency, adding that residents “deserve to know how your government spends your taxes”.

Surely, similar innovations could, and should, be pursued in South Africa.

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