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Light at end of economic tunnel stays dim - business leaders

Feb 09 2017 18:02

Cape Town - South Africa faces economic decline, capital flight and a collapsing currency if it fails to act urgently, warned Business Leadership South Africa (BLSA).

BLSA is an independent association whose members represent South African big business leadership and major multinational investors.

It said in a statement ahead of President Jacob Zuma's State of the Nation Address on Thursday that the country can make major strides in 2017 to address the triple challenges of unemployment, poverty and inequality.

The association maintained that South Africa made substantive progress in some certain key areas but "the light at the end of the tunnel remains faint".

BLSA said the struggling economy that does not give it the platform to address the country's challenges, including the vast number of unemployed South Africans who live in poverty.

"If we do not act, we face economic decline, capital flight and a collapsing currency. These will lead inexorably to rising unemployment, rising prices, the curtailing of social grants and contracting social services. This downward spiral would reverse the gains we have made since 1994 and the social consequences would be calamitous," it warned.

READ: Look at your mess, Pityana tells Zuma in 'real SONA'

BLSA is of the view that the economy needs to be transformed to make the country prosper and to ensure that it works for all South Africans.

"This is the challenge of 'inclusive growth', which is the foremost priority of BLSA. It is also the basis of the National Development Plan (NDP), which remains our 'North Star'."
 
The association explained that an inclusive economy is only possible with a thriving economy.

"This enables us to employ more people, grow the national budget, improve education, build infrastructure and deliver services. As we have seen, a thriving economy requires cooperation, joint problem solving, certainty, predictability and a rational and consultative approach to policy-making."
 
However, BLSA added that a thriving economy is not enough.

"We also need an economy that works for all. It needs to work for the millions who can’t find work and for the working poor who struggle to make ends meet. It also needs to be an economy that addresses our historic racial imbalances. We need an economy where all South Africans can build a better life for themselves and their families."

Failure not an option

This year all South Africans and all sectors of society must pull together to continue to build the foundations for “inclusive growth”, it said.

"This requires a major, national, war-like effort. Failure is not an option. BLSA is committed to actively play its part, with government, labour, civil society and citizens, to build on the successes of 2016 and advance the goal of inclusive growth."

BLSA highlighted some of the gains made through working with the government and labour leaders.

READ: SA has failed to share economic growth - Zuma

These include the introduction of a national minimum wage, the introduction of labour reforms to help stabilise the labour environment and promote investor confidence, the establishment of a R1.5bn small business fund to promote small businesses and create jobs, and the planning of the ambitious private sector Youth Employment Services (YES) campaign to give 1 million economically marginalised young people job experience.
 
It said government, business and labour leaders also embarked on global roadshows and meetings with investors and ratings agencies to build confidence and encourage investment.
 
BLSA added that business, labour and civil society are also working closely in the National Education Collaboration Trust to find joint solutions to improve basic education, and in the National Education Crisis Forum to find a resolution to the universities crisis.
 
"This is not to disregard real differences and indeed conflicts that exist between the sectors of our society on many issues. BLSA has been vocal on some of these issues, including the governance of SOEs, the need for certainty and confidence in the mining sector, and the need to sign the FICA amendment into law."

It said on these and other issues there will continue to be robust public and private debate and engagement. "This is healthy in a constitutional democracy."

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sa economy  |  sona 2017

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