Here’s South Africa’s real problem: Ethics tossed out the window

JOHANNESBURG — Revelations last week about a dodgy Gupta involving SAP resulted in the several SAP South Africa executives being suspended. Similar dramas have played out at KPMG and McKinsey, and more is on its way. One thing is for sure, corporate ethics are under the spotlight in a way that they have never been before in South Africa. But at the heart of State Capture and the struggling economy is a fundamental trust deficit and lack of ethics that Patrick Kuwana highlights so well in this piece below – Gareth van Zyl

By Patrick Kuwana*

We often get so focused on the ‘hard’ issues in business and economic strategy that we forget and ignore (at our peril) the so called ‘soft’ issues. The ‘hard issues’ speak to the transactional aspects of what we do and the results we need to deliver and achieve whereas the ‘soft issues’ focus on relational aspects, such as ethics, integrity, trust and our ability to work with others to make the transactional things happen.

Patrick Kuwana

The current economic meltdown and the avalanche of evidence of a corruption infested economy (as per what we are seeing through the GuptaLeaks now even touching on big name players like KPMG, McKinsey, SAP, etc) should urgently bring us back to shine the spotlight on the ‘soft issues’ upon which sustainable ‘hard issue’ success is dependent upon.

The collapse of the ‘soft’ foundation

Could the real challenge South Africa be facing economically be a collapse of the foundational pillars of an ethical value system (integrity, ethics, values, clean living) that is a prerequisite to creating a conducive environment that encourages people to trade and do business with each other? Have we become a society so driven by greed and selfish material accumulation that we have tossed out the values of moral humanness that are a major ingredient for achieving collective prosperity?

So perhaps a critical component in the solution building process to SA’s economic growth woes lies in an intentional process of moral regeneration across all sectors of the nation so that we can rebuild relationships and trust. Without this we will unfortunately see more people looking to extract for selfish gain (corruption) from the system rather than invest to sustainably grow the engine.

Number 1 constraint in South Africa today is trust deficit

The South African economy is running on such a huge trust deficit and this deficit continues to grow with every new GuptaLeak email that is released. Business and economic activity is foremost a relational discipline. If there is no trust (or you longer know who you can trust) no transactional activity takes place and the system dies a slow and painful death. It’s a simple equation; more trust = more transactional activity = increased economic activity = growth = prosperity. Likewise, no trust = lesser transactional activity = economic decline = poverty. It’s not rocket science.

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The building blocks of sustainable business and economic success

The principles that formed the foundation of the most successful economies (the USA for example) were based on Judeo Christian insight. The core of this foundation is an ethical value system that is driven by the premise of the respect of private property, incentivises prosperity through work and diligence, provides an environment of distributive equity with dignity for all people (full access to economic resources and opportunity for everyone), freedom, economic security (respect of the rule of law), economic efficiency and critically a system to bring the poor into productive economic participation so that as many people as possible contribute and participate in the system. It is a system that also premises that mankind cannot prosper by injustice and that indebtedness creates bondage.

China’s search for the ‘secret sauce’ of economic success

It’s worthy to note that even the phenomenal economic growth of China is linked to the adoption of Judeo Christian principles. In the mid 1980s the Chinese government started sending economic researchers and experts to America to learn ‘the secrets’ of the USA’s economic success. The researchers and experts came back and reported that the main thing they found and learnt is that the fabric of a Judeo Christian based ethical value system was the ‘secret sauce’ of America’s sustainable economic success. The Chinese government decided to adopt this ‘secret sauce’ (the principles albeit without the religion) as the foundation of their economic reform strategy. The rest is history.

The search for solutions through the Judeo-Christian lens

The 2017 Christian Economic Forum (CEF) kicks off next week (16th – 20th July) in San Francisco and brings 150 Christian business and economic leaders from all over the world. The gathering will discuss economic trends and related problems confronting the world today and ideas that work to resolve those problems. The conference will focus on 6 main themes – (1) Business Excellence & Spiritual Integration, (2) Solutions to improve lives and nations, (3) Macroeconomics, (4) Global Job disruption and opportunities, (5) Poverty, Charity and Impact Investing and (6) Technology trends – disruption and innovation.  

Interestingly one of the key experts from China who advised the Chinese government central command on economic reform will be participating at the conference and sharing the journey they have been on and what lies ahead especially regarding China-USA relations.

Could some ideas and solutions come out of this conference that will be applicable to the challenges that the global economy is facing today and even more importantly for us in South Africa and the rest of Africa?

Relationship is the currency of business and South Africa has lost its economic currency

We need to understand that relationships are the currency of business and not money. When relationships are broken it becomes impossible for the business and economic system to flow according to the market forces that enable it to grow. For as long as we elevate money to a position ahead of people we lose our humanness and contribute towards our own economic decline and social decay.

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