Mark Barnes Columnist
Job seekers wait for work beside the road near Cape Town's Khayelitsha township in 2003. Fourteen years later, the jobless situation in South Africa is even worse.
Job seekers wait for work beside the road near Cape Town's Khayelitsha township in 2003. Fourteen years later, the jobless situation in South Africa is even worse.

This is not sustainable, we all know that. We need radical economic transformation - we all know that as well. Desperate populism isn't the answer.

No matter how much force is brought to bear on the productive units in our society, it will not change the outcome. Simply because that force works in the opposite direction to the force that gives impetus to the productivity.

The more force applied to achieve economic outcomes not driven by economic logic, the faster the demise of the enforcer, and the economic ecosystem with it.

You cannot force banks to lend money. If you do, you remove the responsibility that underpins sound lending - the outcome is obvious.

Perhaps a different approach to charters and allocations and expropriations should be considered?

Feed the successful players in the economy, don't restrain them and apply rules to them that discourage foreign investment. Profit pays tax and employs people. Profits fill the purse. What the state does with tax revenue will be the significant determinant of the longevity of its power.

The state has a dual mandate, social and economic, a challenge more easily achieved with more economic capital.

The preservation of capital does not only require maintenance of infrastructure, be it roads or education, but the development within the state of capacities that will enable it to compete with the private sector in the provision of essential services, at the right price.

Transformation, by definition, changes the status quo. Business has chosen its markets, the price at which it does business, and with whom it wishes to deal. Investors have chosen where they hold shares. These decisions were not driven by transformation and will not sustainably be changed by force.

The state, having harvested taxes from successful enterprises, should invest in growth at the base of the economy. In doing so, it will have to analyse risk in economic equations not obvious to big business.

The returns may not come immediately, but they will, in time.

The real upside for the state is not only the direct return on investment, but the creation of a tax base, the creation of employment and the inclusion of more and more of our people in the formal economy.

In turn, that will create a middle class, a fundamental foundation for a peaceful democracy.

• Barnes is CEO of the South African Post Office

Please sign in or register to comment.