A sign and logo of the World Economic Forum is seen at of the forum's annual meeting in Davos, Switzerland. Picture: AFP PHOTO/FABRICE COFFRINI
A sign and logo of the World Economic Forum is seen at of the forum's annual meeting in Davos, Switzerland. Picture: AFP PHOTO/FABRICE COFFRINI

SA clawed its way back to 60th position in the latest World Economic Forum (WEF) competitiveness report after dropping to a decade low of 67th in 2018. The question is, does anybody really care?

The WEF competitiveness report, a remarkably ambitious project, seems to become more ambitious by the year. The 2019 version runs to a scary 666 pages and provides rankings on every imaginable aspect of an economy — an effort resulting, in part, from a survey of thousands of business executives in 141 economies.

In 2019, for example, 91 South Africans, apparently representing small and large companies from different sectors of the economy, responded to the survey. Angola recorded the most respondents (352) — way ahead of China (306) and the US (250).

Essentially, the report taps into the public’s obsession with titillating lists and rankings. But there is a growing danger that the opinions surveyed merely reinforce the perceptions of a cloistered business class and fail to provide useful insights.

What should we make of the report when SA enjoyed a decade-best ranking in 2016 — at a time the country was in the grip of state capture and Markus Jooste’s accounting gymnastics at Steinhoff had reached epic proportions? That same year executives at EOH and Tongaat were busy with value-destroying schemes. Of course, few of us knew this at the time. We took everything at face value; the sort of face value promoted by reports such as the WEF’s.

Inevitably, the fallout from high-profile corporate scandals meant 2018 was a watershed year, particularly for the JSE and SA’s audit and accounting profession.

For years the JSE had bragged, rather shamelessly, about being the best — or one of the best — stock exchange regulators in the world. It was able to do this on the basis of the somewhat whimsical findings of the executive opinion surveys used by the WEF.

In both 2013 and 2014, the 60 or so SA executives who responded to the survey were more enthusiastic about their country’s stock exchange than respondents from the other 139 countries. This meant the JSE won top bragging rights. Securing second and third place in the following few years meant it could continue bragging.

In 2018 the WEF removed "regulation of securities exchange" from the components of its index. The closest replacement is probably "shareholder governance", which measures shareholder rights in corporate governance.

Given that SA executives were filling out their WEF survey responses against the backdrop of dramatic stories about the implosion of Steinhoff, it wasn’t surprising that shareholder governance scored a lowly 56th place in 2018.

Perhaps more surprising was Kazakhstan securing the top slot. And it seems the 2018 achievement was no fluke. The Central Asian country held onto the position in 2019.

It might be some consolation that SA clawed its way up to 39th place for shareholder governance in the 2019 survey. However, given the unrelentingly grim news on this front, it’s difficult to see how any improvement was justified.

Also deprived of its bragging rights was the SA audit and accounting profession. In early 2017 industry members attempted to persuade a parliamentary committee there was no need for mandatory audit firm rotation. They had been ranked No 1 — for strength of auditing and accounting standards — by the WEF for a number of years. Surely parliament could see this meant, even after 100 years (in the case of Naspers), SA’s audit firms were strong enough to be independent?

Of course, in early 2017 few were aware of the tsunami of bad news building around the profession. Within 12 months KPMG had been tagged to the Gupta family and Deloitte embroiled in Jooste’s accounting chicanery at Steinhoff.

It was hardly surprising, then, that in 2018 SA’s auditors and accountants plunged to 55th place. In 2019 they edged up to 49th slot. Finland held onto the No 1 position for the second year in a row.

SA enjoyed a decade-best ranking in 2016 — when the country was in the grip of state capture and Markus Jooste's accounting gymnastics at Steinhoff had reached epic proportions

Bernard Agulhas, CEO of the Independent Regulatory Board for Auditors, says the profession suffered significant reputational damage in 2017 but is slowly starting to change.

"It is clear that there is now a recognition that all stakeholders must work together to restore the auditing and accounting profession to its former stature," he says.

It might be an inevitable consequence of the historic nature of the WEF’s report, which is based on a mix of opinion and facts, that it is more likely to confirm established perceptions than provide useful insight.

In 2019 New Zealand scored top position for being terrorism-free; presumably the research was finalised before the Christchurch shootings in March.

While most of the report confirms tired old perceptions, there are a few surprises. After all, who’d have thought Kazakhstan would be No 1 protector of shareholder rights? And then there’s Albania. It topped the rankings for "ease of hiring foreign labour" (SA came in at 123). Perhaps given that it has one of the world’s highest emigration rates, Albania needs to be as accommodating as possible to anyone wanting to hire foreign labour.

In a world increasingly cynical about business "elites", the WEF might have to consider adapting its survey if it is to remain relevant.

Political analyst Steven Friedman says he can see the rationale for surveying only businesspeople, but urges the WEF not to present the results as a statement of scientific fact — or, rather, not to enable business communities to interpret them as such.

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