Blunt rhetoric and rising vigilantism is consuming the state

The relationship between the state and business came into sharp focus across two contrasting dimensions this week.

In the Union Buildings, President Cyril Ramaphosa held a meeting with business leaders to confront the crises impacting government and industries across the country.

Before the meeting, a series of developments had underpinned the fragile relationship between the government, business and civil society.

In 2017, as Ramaphosa aimed for the presidency of the ANC in a battle against Nkosazana Dlamini-Zuma, various business leaders expressed unequivocal support for his candidacy. The explicit backing of a candidate in a political party leadership contest, in a race that tight, was a gamble they felt worth taking in light of their non-existent relationship with the previous administration, and of course, the fear that a perpetuation of tense relations would be detrimental to the country.

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In a famous moment in November 2017, Stephen Koseff, founder of Investec, Johan Burger, then CEO of FirstRand, and Colin Coleman, CEO of Goldman Sachs at the time, sat attentively in the Orlando East Community Hall as Ramaphosa outlined what he called his ‘New deal for jobs, growth and transformation’.

At the heart of his proposed deal, was the commitment to root out state capture and corruption, to support entrepreneurship and job creation, to recover the economy, distribute wealth and redistribute land.

In Ramaphosa’s words, the ‘New Deal will and must bring together government, business, labour and civil society in a meaningful, effective social compact to construct a prosperous, just society founded on opportunities for all.’ Such bold commitments would no doubt have resonated with many citizens and business leaders, regardless of their political leanings.

Promises to end corruption

When Ramaphosa won the ANC presidency and eventually ascended to state presidency, the nature of the issues he raised during his campaign remained central to the country’s inability to improve its citizens’ socio-economic prospects. The buy-in that he had – particularly from business – should have naturally been leveraged to infuse some momentum into the new deal he had struck in 2017.

As it turned out, however, Ramaphosa’s accession to the top job seemed to have introduced a sense of reticence and reluctance to governance that has left even staunch supporters in business increasingly disillusioned.

Rather than a binding compact achieved in 2017, the relationship between the state and business has been defined by meandering rather than momentum.

Some might argue that the rhetoric employed during his ANC candidacy should not be expected to be the national agenda he implements in his capacity as the president of the country.

The problem, however, is that on the one-year anniversary of the Orlando East address, Ramaphosa joined Koseff in a South African Jewish Board of Deputies event and reiterated – unequivocally – that South Africa would soon be corruption free and that education was his number-one priority.

Five years later, as the latest literacy results indicate, South Africa has an education crisis and corruption remains endemic. One can only assume his new deal has yet to bear fruit.

Aftermath of a pandemic

Between the escalating ‘civil wars’ within the ANC and the geopolitical wars everywhere else in the pandemic-hit world over the past five years, governing a country like South Africa hasn’t been a linear process. The exogenous factors affecting the country – and the globe  – have been managed as practically as one could have hoped for in light of declining state resources and increasing social discontent.

Whether one agrees with every aspect of the pandemic management process or not, the country eventually emerged from it.

The hostility towards its practices aside, the Reserve Bank has used the only tools it is currently allowed to apply in its bid to manage the economic fallout.

Beyond this, the question of how the president manages national issues that are within his sphere of influence has been a source of great debate. The mooted social compact between the state and its social partners has stalled. In the interim, the country’s primary challenges of unemployment, poverty and inequality have found another trio of siblings – the energy crisis, the logistics crisis, and the persistence of crime and corruption – that have darkened the national mood.

While business has expressed a willingness to work with the state, the mechanics of such partnerships have not been linear.

State and business engagements

The approach to the Eskom question involving unbundling, debt relief and actual engineering and technical solutions has been a mixed bag that creates an accountability vacuum. Business is involved with the National Energy Crisis Committee (Necom) and is mobilising funds to support the national Energy Action Plan, yet citizens living through Stage 6 blackouts naturally wonder if it makes a difference at all.

Similarly, business leaders have been engaged in finding holistic solutions for all state-owned enterprises (SOEs) through the SOE advisory council, which curiously does not report anything in spite of the declining fortunes of state enterprises.

In the logistics crisis, the plans of introducing private players have fallen into a trench between practicality and policy tension points – to the detriment of the country’s economy.

The sum of these interventions and engagements between the state and business has evidently moved fast enough to address the most fundamental issues.

Diplomatic crisis

In recent weeks, the sense of discontent has become more visible, as business leaders explicitly pronounced on the bleak nature of the country’s prospects. Whether using inferences to state failure or the escalating country risk profile, the message has been clear that much of what the state has been doing, is not getting the desired solutions.

The voices – from Fani Titi of Investec, Ralph Mupita of MTN, Daniel Mminele of Nedbank to Alan Pullinger of FirstRand, have been prominent and relevant enough for the government to pay attention.

As one would expect, the most pronounced reaction was from the Minister of Mineral Resources and Energy Gwede Mantashe, who cautioned business leaders against being alarmist.

As the diplomatic crisis associated with the upcoming Brics Summit remains unresolved, business leaders agreed to take one more stab at getting the relationship with the state going. The business delegation of senior leaders, who have been expressing discontent about the national drift in their spheres, met with President Cyril Ramaphosa last week.

Their commitment to work with the state – particularly in dealing with the energy and logistics crises and crime – is of the level necessary for as long as the state’s notoriety in mastering the optics of engagements and faltering at implementation, is not repeated here.

Taxi-turf warfare

While all this this was happening in the Union Buildings, a rather more troubling development occurred in Soweto. The turf warfare between e-hailing drivers and taxi drivers resulted in the torching of Uber vehicles.

Read: Ramaphosa, ministers meet CEOs amid investor angst

The longstanding problem of how the relations between commuters, consumer choice and transport providers must be managed, remains unresolved. Since e-hailing operators gained a foothold in the market, taxi operators and their conduct, which has sometimes turned violent, have found a government paralysed by a lack of willingness to write the rules that protect the industry and safeguard consumer choice.

E-hailing drivers have had to negotiate their right to exist across different levels of intolerance and hostility.

Through it all, the inability of the state to implement the law in a manner that would remind us all that no one is compelled to use any particular mode of transport, has resulted in a rise of criminal conduct, where e-hailing drivers have been on the receiving end of violence and arson.

Vigilantism on the streets

The problem with this state of affairs, where law enforcement exists in thrall and fear of the taxi industry, is that it legitimises a vigilante approach to law and order that is detrimental to the country.

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In solving last week’s impasse, the City of Johannesburg’s security cluster – led by the Member of Mayoral Committee (MMC) for roads and transport Kenny Kunene, and MMC for safety and security Mgcini Tshwaku, once again folded to the demands of the taxi industry and placed a bizarre three-month moratorium on the ability of e-hailing drivers to pick up passengers at shopping malls in Soweto.

However, if the prospective passengers happen to be old or pregnant, then such a rule does not apply and e-hailing drivers may enter the malls to service these passengers.

This seems to be premised on the validation of the theory by taxi owners that e-hailing drivers are stealing their business.

Pathway to chaos

The problem with the implementation of such arbitrary rules rather than the application of equitable laws and regulations, is that it opens up the pathway to chaos. There is at this stage, no clarity on why one sector of the economy is allowed to claim some entitlement to consumers that when it feels threatened, violence is the preferred cause of action, and why the state reacts in crafting artificial solutions rather than applying the laws fairly.

The danger of this is that other industries will claim some legitimate cause for bargaining their way through similar concessions.

The construction mafia has joined the bandwagon in recent years.

In the absence of a commitment from the state to equitable justice, the type of leaders that had the engagement in the Union Buildings last week, where the commitment to fighting crime was such a critical talking point, will find that when the government is called upon to actually do it all, its reticence and reluctance around governance will once again loom large. And then even their own businesses will not be immune to the rising tide of alternative governance that is rapidly consuming the state.