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Optimism fuels the SA delegation to Davos

22 January 2018Jonathan Faurie

From tomorrow, the worlds eyes will once again turn towards that small town in Switzerland called Davos where the World Economic Forum (WEF) will be holding their annual meeting.

The focus of the meeting promises to be very interesting indeed. While the main focus at last year’s conference was the Fourth Industrial Revolution, there is no doubt that the focus this year will be on political populism and its effects on world markets. 

We have Trump in the White House, Great Britain leaving the European Union, a Zimbabwe coup, and the continued fall from grace of President Jacob Zuma. 

FAnews spoke to Mary Vilakazi, Deputy Chief Executive Officer at MMI Holdings, to find out what some of the important focal points from a South African perspective will be. 

Nation building

After the birth of democracy, we experienced a honeymoon rainbow nation phase where reconciliation and nation building were national priorities. 

After this, we entered a period of clarity where the glaring inequality demanded addressing. “Our country developed the National Development Plan that laid out a vision for partnerships in building a developmental state within a socially just market system. It came complete with solutions, proposals and actions for a phased implementation,” said Vilakazi. 

After some incremental progress in addressing our nation’s triple challenge of poverty, unemployment and inequality, we now realise the full scale of the problem – at a time when our economy is almost stagnating, with real GDP up by 0,8% year-on-year in the third quarter of 2017. 

It is almost certain that the South African delegation going to Davos will be attending the meeting hoping to find a key to unlock growth. South Africa is the continent’s second biggest economy and has the infrastructure for international investment. We need to transform this investment from a trickle into a stream. 

Renewed engagement

None of this is new; however, what’s working in our favour is that South Africa may see economic growth of 1.5% during 2018, if all of the cards fall in our favour. 

The problem with South Africa has been its political stability or corruption. In the past, South Africa sent massive delegations to Davos just to assure investors that all is well politically. The last time South Africa sent such a delegation to Davos was in 2014. Ironically, one of the main players in this party was Pravin Gordhan, who was then the country’s Minister of Finance. Even more ironic was that a few months later, he lost his job to Nhlanhla Nene in an overtly political gambit orchestrated by President Zuma. 

It is four years later, and South African politicians are once again called to settle the fear around our political stability.  At least this years delegation is going to be led by newly elected African National Congress President Cyril Ramaphosa. 

“The national policy and elective conferences see the party trying to reconcile the need for inclusive growth with its vision of a united, non-racial, non-sexist democracy. This is being done against the backdrop of fiscal inefficiency and growing allegations of state corruption. This complex social environment is fraught with uncertainty, and tension; however; paradoxically, it has seen a renewed level of engagement, awareness and mobilisation. Like elsewhere in the world, groups that were previously apathetic are now marching and campaigning for change. New partnerships are being forged,” says Vilakazi. 

Where previously the party line would be sacrosanct, we see dissenting, independent voices. There are signs of realignment in our politics and in society.  There is every indication that the South African delegation will have a lot of hard work to do in Davos. 

Entrenched inequality

A perpetual problem for South Africa has been inequality. Often, women are the main victims of this. 

“The systemic nature of the problem becomes clear from the slow progress of change. Industry ownership, employment and supplier transformation targets have been low, and even then, are proving difficult to attain despite near unanimity on the need to transform.

On social media and in society at large, we are seeing increased militancy on the part of formerly marginalised communities – black people, women and the youth, especially, as well as people with conditions and disabilities. Racism, sexism and bigotry are being exposed and actively opposed,” says Vilakazi. 

This is not a situation unique to South Africa. Female leadership, when it comes to politics, is low worldwide. Perhaps this is an issue that will be addressed at this years meeting.   

“Creating a shared future in a fractured world is an accurate formulation in South Africa’s social context. Individualism is also rising as a disruption of legacy group identities, even if it often sees society recrystallise into new group identities and more progressive values,” says Vilakazi. 

Again, this is not a problem that is unique to South Africa. However, this is a place where we can take the lead in providing the world with a blue print to overcome this problem. 

“The final challenge that needs to be addressed is the boundary where pragmatism slips over into corruption, which is becoming increasingly blurred. New elites are emerging as the prime beneficiaries of our new liberation dispensation,” says Vilakazi. 

She adds that all is not lost. Politically, our country is in the throes of addressing this situation. Political awareness is as high as ever, but whether this will lead to meaningful participation remains to be seen. 

Editor’s Thoughts:
While South Africa goes to Davos to address a number of concerns that international investors have, there is a positive light. South Africa has now become aware of the dangers of corruption and are taking visible actions to get rid of this. We may benefit a lot from Davos and leave it in the pound seats. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts

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