Corporate world afraid to unite against the presidential road to ruin

Corporate world afraid to unite against the presidential road to ruin

Fearful kakophony drowns business voice, writes Tony Leon.
‘Who do I call when I want to speak to Europe?” Apparently, Henry Kissinger never uttered this great quip attributed to him, on the impossibility of receiving a coherent and unified response from the EU.
But the line is useful shorthand right now, with local substitution, to frame the same question for South Africa’s business community in our year of national economic peril.
Perhaps some were burnt by the experience of Tony Trahar, CEO of Anglo American. In September 2004, he offered the unremarkable observation: “I think the South African political-risk issue is starting to diminish – although I am not saying it has gone.”
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Our very thin-skinned president of the time, Thabo Mbeki, responded with an outpouring of angry resentment in his weekly newsletter: “Was Anglo now saying that democratic South Africa presents the business world … with a higher political risk than did apartheid South Africa?”
Of course, back then we were a different country – with an economically competent though irascible head of state presiding over four times the near zero growth rate of current times.
And Anglo still bestrode the economy as a colossus, although its primary listing had moved by then from Johannesburg to London.
Anglo’s fall from a great height has mirrored the decline of the mining sector, although in recent weeks two outlier mining chiefs have found their voices in calling for the head of the politician who has driven our economy into a ditch.
First, there was the recent funeral oration of AngloGold Ashanti chairman Sipho Pityana, who did not hide his disdain for President Jacob Zuma, describing him as a “man of no integrity” and calling for him to resign. Perhaps Pityana’s pigment and prominent membership of the ANC provides him with some insulation from the usual counterattacks on “white monopoly capital”.
Less insulated, although he has populated his board with some ANC eminences, is Sibanye Gold CEO Neal Froneman. This week, from Denver, Colorado, he also declared that “Zuma has to go”, given the deterrent effect his poor governance was having on both the investor and ratings climates here.
But it’s not at all clear whether, to adapt an old mining phrase, these two canaries in the coal mine are brave, maverick warning voices or indicative of a wave of public pronouncements to follow.
Don’t hold your breath on business being bold. While civil society, the political opposition, the media and now the courts have found their voices and postures to counter the misgovernance which is capsizing the ship of state, this does not hold for organised business. It either goes along to get along, or simply cannot define its position in the public space.
Kakonomics” is not an impolite term derived from Afrikaans. According to Financial Times “Undercover Economist” Tim Harford, it describes the “economics of rottenness”
For example, a few weeks ago, Business Leadership South Africa, the group whose name suggests it is the pre-eminent voice of the private sector, published an advertisement of such diplomatic politeness at a moment of economic meltdown that it is a wonder they bothered to put their heads above the parapet at all.
At the height of the Hawks assault on Finance Minister Pravin Gordhan and the National Treasury and the total inaction of the president to interdict this and get a grip on his own government, BLSA offered a bromide, not a well-aimed bazooka.
True, it called the Hawks’ investigation lacking any “legitimacy or credibility” and referred to the “insidious” subversion of the national collective effort on avoiding a ratings downgrade. But it went on to laud the “unity and progress we have achieved since December”.
One wonders whether this impressive “unity and progress since December” includes the Constitutional Court’s damning judgment in March on the president violating his oath of office, or the addition in this period of more than 300,000 people to the ranks of the unemployed?
Futuregrowth chief investment officer Andrew Canter had to quickly recant. Image: Supplied
Either this is a new example of the “quiet diplomacy” that was the excuse for temporising with the tyranny of Robert Mugabe in Zimbabwe, or, perhaps, it is the application of the old adage from Dale Carnegie. In his 1936 bestseller, still in print 30million copies later, How to Win Friends and Influence People, the self-help guru suggested readers should “praise by name, criticise by category”.
But the “December” reference is exquisite politesse for the reckless act of Zuma in firing Nhlanhla Nene for dishonest reasons and wreaking billions of rands in damage on our equities and bonds, at inestimable cost to our sovereign status.
Since it is well-nigh impossible to separate the category of governance from the outsize powers of the president and his wrecking ball, it is time perhaps to call things for what they are.
Still, the elisions of BLSA are nothing compared to the lateral arabesque recently performed by Old Mutual and its offshoot, Futuregrowth. Financial Mail editor Rob Rose called the group “gutless” and “lily-livered”.
First it announced it was freezing lending to state-owned companies, many of which have become nothing more than sites of spectacular misgovernance and feeding troughs for the “schemers, skimmers, middlemen and rentiers” who populate some of their boards.
Sibanye Gold CEO Neal Froneman said Zuma had to go because of misgovernance. Image: Martin Rhodes
No matter the merits of this call, Futuregrowth chief investment officer Andrew Canter was obliged to apologise and recant for what his boss, Old Mutual CEO Dave Macready, called an “unfortunate and regrettable” statement. Of course, Macready and Co had been given the “big bamboozala” treatment by then. They were slammed as “anti-transformation” and “stooges of white capital”. The capitulation followed in short order.
All this is reminiscent of the Woody Allen movie Annie Hall. He is desperately trying to woo Diane Keaton in the film with vacuous phrases on a first date. But what the two are really thinking of each other is conveyed in subtitles.
“Kakonomics” is not an impolite term derived from Afrikaans. According to Tim Harford, the well-known Financial Times “Undercover Economist”, it describes the “economics of rottenness”.
As he wrote recently, “a true kakonomy is collusive, a tacit agreement to be mediocre at someone else’s expense”. Pity for us, then, that the cack-handed collusion between some in business leadership and the Presidency happens to be at the expense of South Africa.
• Leon is a former leader of the opposition. Follow him on Twitter: @TonyLeonSA

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