As the “gradually…then suddenly” impact of the ANC’s socialist economic policies become apparent to all, Corporate South Africa’s appeasement approach is coming into sharper focus. In this episode of UNDICTATED, Free Market Foundation CEO David Ansara urges corporate executives to grow a pair, as the evidence proves business’s “ask nicely” approach has been a waste of time. He uses the unaffordable, bankruptcy-inducing NHI as an example: Big Business invested massively in time and resources over many years – but not a single of its suggestions were included in the final document. Ansara spoke to BizNews editor Alec Hogg.
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Relevant timestamps from the interview
- 00:08 – Introductions
- 01:04 – David Ansara on Big Businesses approach to NHI
- 05:00 – On the chief rabbi’s comment on the ANC and whether business was taking the line of least resistance
- 09:12 – we must also be very careful when we wade into these political waters as business
- 11:16 – On the ArcelorMittal situation in Newcastle
- 14:46 – How do you state proof your business
- 16:27 – Businesses positioning themselves as apolitical is a facade
- 20:29 – Conclusions
An edited transcript of the interview between Alec Hogg and David Ansara
Alec Hogg: In this episode of Undictated, we explore the role of business in challenging the government. David Ansara, Chief Executive of the Free Market Foundation, criticises businesses for their passive stance on the National Health Insurance (NHI). The recent events at ArcelorMittal underscore the consequences of trusting the narratives from Pretoria.
Good to speak with you again, David. Your recent critique of how businesses are handling the NHI prompted this conversation. Why focus on this issue amidst various other pressing matters?
David Ansara: National Health Insurance has been on the table since 2007, gaining momentum in the lead-up to a crucial election. Despite extensive engagement from big businesses and civil society, proposed amendments have been largely ignored. Business’s response seems equivocal, supporting universal health care but hesitating to assert itself forcefully.
Business, especially big corporations, appears to negotiate from a position of weakness, requesting amendments rather than robustly defending its interests. The lack of assertiveness is evident in the unchanged NHI bill despite over 100 submissions proposing substantial amendments.
Alec Hogg: I noted Chief Rabbi Warren Goldstein’s strong condemnation, questioning why business leaders, including those of the Jewish community, are appeasing a seemingly anti-Semitic government. Why, in your view, is business choosing the path of least resistance?
David Ansara: Many fear being frozen out of discussions, opting for a less aggressive approach. However, this strategy doesn’t seem to yield the concessions they hope for. The reluctance to challenge the government is often dressed up as patriotism, but businesses must recognise their bargaining power and the critical role they play in South Africa’s functionality.
Businesses should assert their legitimate social role, defending the interests of staff, shareholders, and customers. Engaging with the government should involve recognising one’s interests and occasionally taking positions misaligned with government proposals. The current social compacting approach reinforces policy status quo, hindering effective resolution of systemic problems.
Alec Hogg: Quoting your speech at the Rand Club two months ago, you mentioned that we are governed by our inferiors, and their power is perceived rather than real. This sentiment hasn’t resonated within the South African corporate business community.
David Ansara: When it comes to engaging in politics, businesses should tread carefully. While claiming to be apolitical and focused on the best outcomes, aligning with specific political factions, as seen in social compacts, risks being labeled colluders. Businesses should assert independence and engage in political contestation without tying themselves to a particular faction, considering the volatility of political fortunes.
The potential change in government within six months underscores the importance of businesses reading the political landscape accurately. Drawing on the example of ArcelorMittal and its struggles, businesses must recognise the challenging operating environment in South Africa, primarily shaped by government policy decisions.
Alec Hogg: Reflecting on the recent struggles of businesses like ArcelorMittal and Volkswagen, where government engagement over five years has yielded no progress, questions arise about when businesses will take decisive action. The closures and downsizing in ArcelorMittal are attributed to the challenging operating environment created by government policies.
David Ansara: The difficulty faced by businesses, such as Volkswagen, due to energy shortages and labor issues, should serve as a warning sign. Waiting for government permission to address problems is counterproductive. Businesses need to proactively solve issues, collaborate with others, and avoid implicit subservience to the government.
Taking cues from recent discussions on governance failures, businesses should translate awareness into action. Melanie Venice from the Association of Chambers of Commerce has been bold in highlighting governance issues impacting businesses. It’s crucial to turn this awareness into proactive problem-solving to avoid a continued trajectory of decline.
Alec Hogg: Returning to an earlier point, the need to prioritise state-proofing businesses should be a top agenda item in boardrooms. Instead of hoping the country holds together until personal share options vest, businesses must consider the long-term impact of continued mismanagement on their sustainability.
David Ansara: State-proofing is a mindset shift, emphasising businesses’ independence from the government. Legislative developments hostile to free enterprise require businesses to adopt a low time preference, focusing on the future of business in South Africa over the next decades. This mindset involves standing up to the state and resisting policies rather than merely minimising their impact.
Alec Hogg: Addressing the facade of businesses positioning themselves as apolitical, the question of business involvement in the upcoming election arises. The opposition parties argue that this election is a last chance for democracy. Should businesses engage, if not in supporting specific political parties, at least in encouraging participation and voter registration?
David Ansara: Participating in the democratic contestation is crucial, especially with the increasing competition in the political space. While acknowledging the ideological alignment of many parties with the ANC, there’s hope for more pluralism in the future. Coalition politics may become a permanent feature, and businesses should encourage values such as freedom, individual freedom, non-racialism, and a market economy. However, state-proofing remains critical, as even capable politicians may struggle to address deep-seated issues in municipalities and government departments.
A radical restructuring of South Africa’s political institutions is needed, addressing issues like a bloated cabinet and extensive state intervention in the economy. The Free Market Foundation advocates for privatisation as an urgent necessity to minimise state power. While changing political leadership is welcome, the government, not the country, is at risk of sinking in its current form.
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