The country should not waste a good crisis

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IF THE public debate is a guide, we are again wasting a “crisis” — this time, the fact that the economy shrank by 0.6% in the first quarter, apparently because of the platinum strike. The phrase “don’t waste a good crisis” is commonly used. But few who use it take much notice of what it means. A “crisis” is a turning point, an event that convinces people what they have been doing is not working and they need to change course. To waste a crisis is to get a message that we need to change but carry on the same.

Crises are vital here: we usually need them to move us forward. Our divisions run deep and so the powerful actors tend to blame the others for problems rather than looking at their own role. But occasionally we land in a crisis that jolts key actors into realising that they need to change some of what they do.

Is our worst economic showing in six years one of those crises — particularly as it seems to stem from the failure of business and labour to end a strike? Not if we look at the attitudes of business and labour.

The new Cabinet may not display great sensitivity to business sentiment. But this does not necessarily mean there is no sense of crisis in the government. It insists that it knows there is a problem and wants to fix it — in the past few days, Finance Minister Nhlanhla Nene and Gauteng Premier David Makhura have said as much. Will the demands of factional politics prevent it doing what it says? We don’t know. But that it recognises the problem at least raises the possibility of a willingness to change tack.

There are no similar signs in a labour movement mostly concerned with its internal difficulties. There is little of the fresh strategic thinking needed to get unions out of what looks like a cul-de-sac.

But the clearest sign of a wasted crisis is the response of commentators close to business and the few business people who speak publicly on our economic plight. Some responses display deep-rooted bigotry — one corporate economist compared unions to criminal gangs. Most simply insist that we are in a bind because unions are unreasonable and the government won’t fix the problem.

If this approach is shared by much of business, there is no turning point in sight. If only the government caused the problems and only it can fix them, business has no need to look at what it could do to help solve problems. This is simply not credible. Has business no role in fixing poverty and inequality? Are there no racial biases in business that need attention? Has business contributed nothing to the hostile relationship between it and the government?

Those who insist the problem is simply the government might care to read economist Nouriel Roubini on these pages this week. He points out that, across the globe, a tide of nationalism is challenging free markets — he worries that, if nothing is done, this could trigger the rise of right-wing authoritarianism like that which destroyed so much in the 1930s. And he argues that one reason is a model that insists businesses should be freed from the regulation that governed market economies for much of the past century.

This challenges one of the great myths of economic debate here — that all we need is for our politicians to behave the same way as those everywhere else. Politicians here who are suspicious of business are part of a global trend. And changes to ways of doing business are needed to make the problem go away.

Those who demand “business-friendly” people in the government are also selfdefeating. They clearly believe that a constructive relationship between business and the government is needed — otherwise who cares who is appointed to the Cabinet? But their attitude makes that constructive relationship impossible.

In serious negotiations, the parties choose their own negotiators — they don’t get to choose the other side’s. If business should deal only with Cabinet ministers it considers “business friendly”, should the government deal only with business leaders it considers “government friendly”? Businesses need to build a relationship with the office holders government chooses, not those they would like it to choose.

It is also impossible to build a working relationship with people you refuse to take seriously. A basic truth is that how you react to others shapes how they react to you. Noone ever built a constructive relationship by yelling at the other person or dismissing them. And yet much of the present debate seems to assume that business will get the government it wants by yelling at it or dismissing it rather than talking to it.

There will be no solution to our problems without some changes to the way business is done here — and without a more constructive relationship between business and the government. If business leaders and commentators do not recognise this, there is no turning point, no crisis — and no prospect of getting out of the mess.

By Steven Friedman

Steven Friedman is director of the Centre for the Study of Democracy.

Source: Business Day