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South African businesses and their role in creating sustainable peace and stable economy


4 July 2019 09:23 am - 0     - {{hitsCtrl.values.hits}}



Following is the full address delivered by South African High Commissioner in Colombo R.P. Marks at the 180th Annual General Meeting of the Ceylon Chamber of Commerce on June 28th on the topic ‘South African Business and their Role in Creating sustainable peace and a
stable economy.’

My thesis that I will be presenting today is that South African business played a decisive, yet under-appreciated, role in facilitating this result. They were one of the winning elements that we had in the country that helped us to realise the peace and stability that we enjoy today.


‘‘We were ostracised by the international community, and the international anti-apartheid movement lobbied their governments successfully to apply sanctions against SA. This is something that spread to ordinary people as well, who refused to buy and consume SA products such as our wine and our fruit


Background of economic and political base 
We came from a low political and economic base. Across the world, South Africa was seen a pariah state because of Apartheid that separated races and kept black people in low skilled,
low paid positions. 

We were ostracised by the international community, and the international anti-apartheid movement lobbied their governments successfully to apply sanctions against SA. This is something that spread to ordinary people as well, who refused to buy and consume SA products such as our wine and our fruit. 

In fact, eating or drinking SA’s product was seen as tantamount to condoning apartheid. And so apartheid was personal for people across the world. And of course, there was a cultural and sport boycott in place. From the mid-1980s, foreign governments and businesses cut many economic ties with South Africa, and in 1985, international banks began refusing to roll over short-term debt with the result that, over the next year, the country would have to pay one billion US dollars in loans. 

Inflation rose to 16 percent, the currency tumbled and the government introduced exchange controls. By 1986, over 100 multinationals had disinvested from South Africa. So from a business perspective, the economy was in free-fall and our currency was at an all-time low. 

Fast forward to 25 years later, and the picture couldn’t be more different. Today those days are behind us, and we now have an economy with a GDP of US$ 385 billion, compared to Sri Lanka with a GDP of US$ 90 billion. 

“We are seen as a leader on the African continent, and the only African country who is represented at the G20. We are also a full member of the BRICS, one of the most significant geo-political formations formed in recent times, with whom we have an equal relationship not as a beggar for hand-outs, but as a country who is clear about what it has to offer, and requires
from this formation. 

“And we are a provider of development assistance to selected countries in Africa, because like President Mohdi with his ‘neighbourhood first’ we also prioritise our own region and continent of Africa. We believe that as the largest and most significant economy on the continent, that we cannot be an island of prosperity in a
sea of poverty. 


So what was the role SA business played in supporting our transition?
It is important to understand that business came to the table to support our transition because quite frankly, they didn’t have a choice. The economy was going down, wide scale industrial strikes were the order of the day, domestic consumption was down and internationally the export market was shrinking for SA goods. The white business community came to see that their political leaders were clinging to a status quo that had become a wasting asset. They could help the apartheid government and white society to rearrange deck chairs on a sinking ship that would end at a bloody road. Or they could help build a climate of trust in which the political leaders could move the country toward a stable future.

So what was the winning formula that made business enablers of a stable country and a growing economy and that Sri Lanka could learn from?
They understood that their own survival and sustainability depended on not remaining neutral from the development of a viable political alternative to unite the country. After all, if we became a failed state, who will you do business with? And more importantly, who would want to do business with you?
They became active enablers in assisting, behind the scenes, the talks around talks that helped to support our negotiation process. In some cases, when negotiations broke down, they took active steps to mediate behind the scenes with the different roleplayers.

They funded efforts at maintaining the peace. They knew that it was in their own interest to make concessions around a decent living wage that would quell the many industrial strikes that we had at the time. Many of them improved their working conditions, improved salaries to workers, and offered scope for promotion to their
black workforce. 

They understood that rampant labour exploitation was a breeding ground of civil unrest that could, and did, easily spread into communities.

They helped “sell” the vision of a non-racist SA to the rest of the world. They invited trade delegations to meet with leaders of the liberation movement 
They organised themselves into a social compact organisation that was called the Consultative Business Forum, and they agreed on a broad set of principles. This included a commitment to a non-racial democracy and to continue consultation with all interest groups and democratic movements included business, labor
and government.

They helped to develop a climate of trust to the international community. They were vocal about the fact that the country was on the right track, that good, fair and inclusive governance could also be good for business, and more importantly, because they had vested personal and business interests, that they had no intention of leaving. So when prominent companies like Anglo American started “selling” the new SA, the outside world took notice that there would be no local capital flight.  

They stayed. Nothing demonstrates confidence in a country more than staying and not leaving for what might be seen as greener pastures. After all, often the grass looks greener on the other side because of the manure that the soil is receiving! Business understood that their fate was inexorably linked to the new
South Africa. 

Of course there are many more factors at play, and business was not the only reason why we are the stable and growing economy that we are today. We still have many challenges. What is important for us though, is that we understand the role that business can play in supporting country stability. The business of business is not only business, and any company that ignores the impact that an uncertain external political environment have on their bottom line is doomed to fail.
Pic by Samantha Perera

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