Jobs and Procurement Accord

When Pragmatism Becomes the Only Way Out

South Africa’s economic policy elite must bear its fair share of blame for the increasingly polarised tone of the country’s public discourse over the past year. Honest and robust debate between policy stakeholders in government, business, and labour is healthy for balanced economic development, but under certain conditions restraint in rhetoric and a greater public show of unity can achieve the same objective more optimally. Given the jittery global economic environment of recent years, circumstances demanded somewhat more of the latter. Yet, on certain occasions during this period their angry exchanges suggested that, despite public commitments to inclusive solutions, some policy actors were prepared to defend sectoral interests at any cost.

The nationalisation debate, the pending Walmart deal, and public wage demand disputes, all became battlefields on which stakeholders have fought their acrimonious battles for sway in this highly-charged policy environment. Yet, when stripped from their ideologically-marked jargon, the diagnoses of the major bottlenecks to progress were not that far apart. There appeared to be equally little dissonance around what to ought to happen to address them. Yet, somehow there has been an inability to move from the logical problems to the obvious remedies.

True to South African form, we have exhaustively analysed the problem, but when push came to shove, parties have chosen to retreat and wait for others to bear the burden of sacrifice. Elsewhere in the world public exasperation with endless negotiations and preciously few outcomes to show for it, are increasingly driving people, across class lines to the streets. Also here there are indications that frustration is mounting, not only amongst the marginalised poor, but also vulnerable wage and salary earners who feel insecure in their jobs.

In recent weeks, however, a number of encouraging developments should have served to counter some of these perceptions. Equally true to form, it seems as if momentum is now developing around the search for a collective action at a time when all indicators appear to be pointing towards an imminent threat to our post-apartheid economic gains.

Probably the most significant of these has been Monday’s joint accord between government, business and labour representatives that saw signatories commit themselves to protect and create jobs by means of a local procurement target of 75 per cent. Admittedly, as some stakeholders have acknowledged afterwards, the devil may be in the detail, but at a time when global pundits gravitate between hope and despair several times in one day, disabling cynicism may not be an option.

At present the weight of (optimist) opinion seems to favour a global scenario of low growth over a protracted period. Any truthful assessment would suggest that under such circumstances the odds are highly stacked against reaching some, if any, of government’s New Growth Path (NGP) targets. And let us be honest, this week’s accord was as much about the fear of slippage as it was about achieving these targets. As the world waits with bated breath for a resolution to the European economic crisis, it may indeed be this realization that injected new urgency amongst stakeholder to search for common strategies. Each of them, and by extension all of us, have much to lose in the absence of a response that counters the impact of the current economic climate.

A number of things about this accord should be cause for cautious optimism. The most obvious is that it has bucked a trend of angry discourse, which has largely been fanned by some who sought to exploit, rather than address, the sources of material distress that so many people experience at present.

Another is the solid groundwork that was laid last week in the presentation of the medium-term budget statement when Finance Minister, Pravin Gordhan, provided a very candid assessment of the unique challenges that we face, and the practices that we can no longer afford. Very few could disagree with his analysis. A centerpiece of this presentation was the emphasis on policy clarity and stability, and to this end he strategically emphasized the centrality of the NGP as a guiding instrument.

The fact that signatories to the accord couched these targets within the NGP framework is therefore of particular significance. While some role-players within business and labour have expressed reservations about aspects of this policy document since its release last year, they offered a united front on Monday, which is critical for policy certainty. This surely does not signify complete buy-in by all, but a commendable prioritization of the national interest above political expediency. This is the kind of predictability that people want to see – not only those in the local and international investor community, but also the millions of struggling South Africans, who are desperately seeking signs of urgency and commitment to address their plight.

The most encouraging aspect, however, is that the accord seems to form part of an emerging, often underreported, movement towards pragmatism in the search for solutions. When one looks back more closely over the past few months, there have been a number of sector-specific solutions, which have been brokered between labour and business in order to avert calamity within certain industries. One such recent example has been the agreement between the Cape Town Chamber of Commerce and Cosatu in the Western Cape, to save the province’s clothing industry from demise. Pride and ego have been set aside and an inclusive solution was found that served the sectoral interests of both. It required give and take, but ultimately it signaled a commitment to a broader social imperative.

Understandably such agreements cannot be replicated without qualification. In some sectors they may find bearing and in others not. What is important is the inclusive approach to problem solving that underpinned them.

These may be early days to call it a trend, but any movement in the direction of a more consensual approach to the solving problems that tend to polarise should be encouraged. Not merely because there is no other alternative at this point, but also because it makes long-term sense to do.  As we move into a period that will be distinctly different from the high growth environment of the first years of this millennium, better resource management, particularly of our social capital, will be critical to steer us through what seems to be an unsettling few years ahead.

A version of this article first appeared in the Sunday Independent.

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