Let private-sector leaders lead: Facilitating business would go a long way to creating jobs

Post February 28, 2011

By David Shapiro

At one of the Berkshire Hathaway annual shareholder meetings I attended, Warren Buffett tackled a question about joining the board of directors of companies in much the same way Groucho Marx voiced his reservations about club membership. The comedian confessed that he would never join a club that would accept him as a member.

Buffett’s reputation as the world’s most successful investor was established by his knack of buying into good businesses and then leaving the proven management alone to run the company.

I have immense admiration for managers who have the talent to grow small businesses beyond the constraints of their local borders. It is a flair that easily compares with the aptitudes of gifted sportsmen, actors and musicians.

It has little to do with academic achievement, but rather an innate understanding of the mind-set of the consumer, a persuasive belief in a vision, a prophetic sense of timing and an ability to inspire colleagues.

South Africa has a proud heritage of fostering top-ranked business people. It has produced giants such as Harry Oppenheimer, Anton Rupert, Donald Gordon and Raymond Ackerman.

Playing catch-up is a generation of expansive thinkers such as Koos Bekker, Phuthuma Nhleku, Brian Joffe and Adrian Gore.

All achieved prominence in openly contested commercial markets without the aid of government privileges or exclusive trading rights.

Growing a business is not the art of merging spreadsheets. It is a lot tougher than that. It takes decades of long hours at the office, the stress of trying to outwit the competition, the pressure of satisfying customer demands and the continuing burden of trying to balance the cashbook.

No wonder Buffett pays homage to these distinctive world leaders by not confusing his gift of identifying investment talent with their flair for increasing earnings.

In Minister of Finance Pravin Gordhan’s Budget speech last week the message was abundantly clear. The country needs to deliver on the promise made 17 years ago when the ANC took the reins of power: that it would improve the quality of life by eliminating poverty through the creation of decent jobs.

While the job-creation mantra was repeated relentlessly in the minister’s speech and is the underlying theme of the government’s new growth path strategy, precise details on how the government hopes to achieve its goals are hopelessly deficient.

From my personal perspective, if it comes to the challenge of creating jobs for the millions of unemployed, my instinct would be to lean towards business rather than a collection of politicians whose combined experience, exposure and accomplishments in commerce hardly makes them eligible to refill the canteen vending machine, let alone take responsibility for industrial policy.

Yet the closer we examine the ANC’s agenda the more determined it appears to put impediments in the path of private-sector efforts to expand domestic operations.

Without sufficient column space to elaborate, top of the list is the government’s resolve to toughen its already rigid and widely unpopular labour practices, a move underwritten to discourage industry enlarging its workforce. Add to that its insistence on enforcing stricter compliance to its costly and onerous BEE strategy and plans to invoke even higher levels of affirmative action, putting political ideology above the need to improve productivity and the country’s competitiveness.

African leaders in the north of the continent are being swept aside by uprisings instigated by youths marshalling their frustrations through the use of social networking sites. The young activists have demonstrated little consideration for the struggle credentials or revolutionary exploits of the ageing leaders and political elite, instead demanding an end to corruption and rule through fear and the creation of decent employment.

The protests have been confined to Arab League nations, with local disempowered youth showing little fervour for changing the status quo.

Admittedly, unlike our northerly neighbours, South Africa is a well-functioning democracy that allows the disenchanted ample opportunity to express their grievances through the ballot box.

That might be wishful thinking. With 42% of those between the ages of 18 and 29 unemployed, the texts are flowing freely.

The private sector is more than happy to play its part in alleviating the growing discontentment among the young, but the government, too, must come to the party by putting aside its wasteful political imperatives in favour of supporting simple, common-sense business rules.

Posted on http://www.timeslive.co.za

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