President Mandela’s presidency was one that inspired hope for a great future for our country.  He was in favour of reconciliation, non-racism and building a united and prosperous nation.  The economy, which had been sluggish during the last years of apartheid, started growing and reached an all-time high of 7.1% in the 4th quarter of 2006.  He took nationalisation off the table and because of investment-friendly policies foreign direct investment increased.  This was leadership that took into account the best interests of all the country’s people.

This is the complete address given on 10 June 2015 by Herman Mashaba at Nelson Mandela Bay Leadership Summit:  Key Challenges Facing Leadership in South Africa Today and How to overcome them.

It is truly an honour to be given this opportunity to participate in this leadership summit.  Thank you for extending the invitation and asking me to provide my personal views on the subject of leadership.

In order to discuss the question of leadership we must first ask ourselves the question: “What is a leader?” A dictionary description of a leader is: “one who leads or goes first: a chief: the leading editorial article in a newspaper: principal wheel in any machinery”.

The description that most appeals to me is the “principal wheel in any machinery”.  If you apply that description to what we usually talk about as leadership it gives you a much better understanding of the function of a leader, which is to be that part of a business, government or other organisation that makes it work.  If the principal wheel in any machinery is faulty, the machine will not work properly, and if the “big wheel” in an organisation is faulty, the organisation has serious problems.

It is, of course, not only the leader or principal wheel of a machine that has to be in good working order, but the whole machine has to be in good order.  In an organisation, all the members need to function well if you want it to be like “a well-oiled machine”.  As you will notice we often use this comparison between the operation of a business, a sports team, or other grouping of individuals, and a machine.  But this comparison should not be taken too far.

The different parts of a machine don’t suddenly start behaving differently to the way they behaved the day before as members of an organisation sometimes do.  Part of the job of a leader is to try and develop a consistency that leads to better all-round performance and that consistency starts with the leader establishing a pattern and setting an example for others to follow.  If the operating rules suddenly and frequently change without explanation or good reason the results can be chaos.

What I have been talking about applies not only to a business or other voluntary organisation but is particularly important when we are talking about a country.  If you look around the world for good leadership of a country you will have difficulty in finding a better example than the late Lee Kuan Yew of Singapore.  Lee Kuan Yew became Prime Minister of a poor underdeveloped island of Singapore and turned it into an economic powerhouse it is today.

We often hear that Lee Kuan Yew, or LKY, as he was generally referred to, was a despotic leader and that Singapore is not a real democracy.  On the other hand, what you don’t often hear is that Singapore has one of the freest economies in the world.  Together with Hong Kong it has also been found to be one of the two most competitive economies and among the least corrupt.

Singapore has an excellent competing private/public healthcare system and the life expectancy of Singaporeans at birth is 82 years compared to the 53 years of South Africans.  Singapore has a GDP per capita of $60,000 compared to South Africa’s $11,000, and an unemployment rate of 2% compared to our 34.6%.  So what kind of leadership gives you such results?

Please allow me to give you a little bit of background of this remarkable leader.  LKY studied law at Cambridge University and practised as a barrister in London for almost 10 years before returning to Singapore and entering politics.  His involvement in the British legal system had a great influence on the policies and approach he followed when he became Prime Minister of Singapore.  He ensured that the legal system functioned properly, that the laws treated everyone equally and his government adopted policies that allowed business to flourish.  Not surprisingly, international comparisons have found that the courts are among the most efficient and the country ranks highly on the Rule of Law index.  Because of these policies, major companies invested in Singapore, a thriving financial services business developed and FDI was extremely high for a country with a population of only 5.5 million people, of whom 2.1 million are not citizens but have permanent residence status.

I am aware that I am speaking a great deal about one leader but it is from the exceptional that we should be learning.  LKY has his detractors.  He has placed economic growth and security before free speech and freedom of assembly.  It is also well known that as a visitor you must not litter because of severe punishments.  The result is that the country has achieved a reputation for safety and of being a “garden city”.

As you might have expected, I will now turn to South Africa and its leadership.  We had President Nelson Mandela, who became the first democratically elected President after leading the brokering of a peaceful transition to democracy with the FW de Klerk’s government.  This peaceful transition took leadership on both sides.  The alternative would have been a bloody confrontation that would have led to death and destruction and a result that is impossible to imagine.  All we can know is that it would have been bad for everyone.  It took leadership to confront reality and sit down at the bargaining table.

President Mandela’s presidency was one that inspired hope for a great future for our country.  He was in favour of reconciliation, non-racism and building a united and prosperous nation.  The economy, which had been sluggish during the last years of apartheid, started growing and reached an all-time high of 7.1% in the 4th quarter of 2006.  He took nationalisation off the table and because of investment-friendly policies foreign direct investment increased.  This was leadership that took into account the best interests of all the country’s people.

In 2000 South Africa was 41st out of 152 countries on the economic freedom index.  In 2012 we were 93rd.  So in economic terms our country has been going downhill fast.  (I suppose I have to mention that on the world Economic Freedom Index you get a higher score if government is not taking your property and is respecting the rule of law – a fact that has apparently not come to the attention of the EFF.)

On most other measures of performance, South Africa has also been rated downwards.  You would think that good leaders would take note of these declines and their consequences and adopt corrective measures to improve conditions in the economy, as LKY did in Singapore, but unfortunately this is not happening in our country.

I mentioned earlier that with good leadership the rules are not constantly changing.  South African government leaders don’t seem to understand this.  Our owners and managers wake up every day wondering what new regulations will descend on them.  They are living in perpetual uncertainty, which hampers their forward planning.  In addition, more and more of their time is taken up in complying with regulations, which prevent them from focusing on what they get paid for, which is to run a business.  This is not a good recipe for bringing about economic growth and providing new jobs, which are so desperately needed in our country.

Legislation and regulations are pouring down on business.  As a result, the quality of our law suffers and costs are incurred by the private sector in the form of experts hired to address bureaucratic requirements.  Staff and executive time is spent on matters that produce no value for the business, customers, employees or the economy.  The excessive red tape results in an incredible waste of resources, which weighs heavily on an economy which needs to absorb 8.7 million unfortunate unemployed people into the labour force.

Our Constitution and laws establish a platform on which governance of the country is based.  This platform has to be sound, otherwise governance cannot be properly carried out and citizens do not know what is legal or illegal.  Even worse, the courts have to deal with huge caseloads that could be reduced if the statutes are consistent with the rule of law, which is a founding provision of our Constitution.

According to my understanding of the general principles of the rule of law, the laws must be equally applicable to everyone and section 1(c), which is a Founding Provision of the Constitution, gives the rule of law and the Constitution equal status in determining the nature of our legal system.  In my view, it follows that the current race-based laws, which have replaced the pre-1994 race-based laws, can easily be challenged on constitutional grounds.

What we all hated most about apartheid was that the laws differentiated South Africans on the basis of colour.  How can that now be different? What is it in us as individuals that allows us to say that a racial bias in the laws during apartheid was unjust but now it is just?

Given the platform that I have described, it becomes clear that proper application of the rule of law by the country’s leadership will solve many problems.  The courts would be relieved of unnecessary burdens and would be able to concentrate on the real critical matters that confront them, which is to adjudicate the law according to sound and just principles.

Law enforcement agencies would be able to concentrate on dealing with real criminality and not be expected to police thousands of less important matters that unnecessarily take them away from their true duties of protecting people’s lives and property from criminals.  Corruption will be halted when officials do not have the discretionary powers to enrich whoever they wish, including themselves.

I want to now discuss an issue that troubles me greatly, which is the 8.7 million unemployed people in this country.  What is it about this tragic situation that makes the government leadership shut their minds to the problem?

My question is:

“Why is it that so many people are unemployed when there is so much to be done in this country?”

I have no doubt that under different circumstances, private entrepreneurs would find work for everyone who wants to work.  The reason people don’t get jobs, is that the labour laws have imposed risks and costs on potential employers that they cannot afford to carry.  If we remove these unnecessary risks and costs much more employment will happen.  This is a matter that requires leadership in government.

Let me make it absolutely crystal clear what I am talking about:

  • Am I in favour of what is described as slave labour? No!
  • Am I against what is described as decent jobs? No!
  • Am I in favour of creating conditions that will lead to rapid economic growth? Yes!
  • Do we need rapid economic growth to absorb all of our 8.7 million unemployed brothers and sisters into the labour force? Yes!
  • Can we increase labour absorption even if we don’t have high economic growth? Yes!
  • How? By removing the barriers to employment, especially by changing the laws to allow the unemployed to decide for themselves what they think is a decent job!
  • Should unemployed people be able to take jobs that we think are not decent? Yes, it is their decision and not ours!
  • Is that not a callous and inhumane approach to take? No!  It is callous and inhumane for government leaders to take away their decision-making power over their own lives.  Laws, such as minimum wage laws, remove every opportunity they might otherwise have had!
  • Would I misuse the situation and treat people badly? No!  And I don’t think you would!

What would be the difference? The difference would be that you and I would not end up in the CCMA for giving a jobless, unskilled and uneducated person a chance by paying them an agreed rate for their work.  The difference would be that our unemployed brothers and sisters would have hope, the dignity of having a job and the ability to put bread on the table for their families.

Let me turn to some of the most pressing problems facing our country.  It is well known that I have played, and continue to play, a leading role in the Labour Law Challenge launched by the Free Market Foundation in March 2013.  This labour law challenge is against the extension of Bargaining Council agreements to non-parties.  My motivation against this piece of legislation is the 8.7 million unfortunate members of our country.

Section 32 of the Labour Relations act, passed by our leadership in Parliament, compels the Minister of Labour to extend Bargaining Council Agreements to non-parties, who are generally small businesses.  This piece of legislation has been to a large extent instrumental in destroying SME’s in the last 15 years.  This bad piece of legislation wasn’t made out of ignorance of the consequences, but was driven purely for political reasons.  The victims of such decisions far outnumber the beneficiaries, but they don’t understand the economics so they continue to support their oppressors.

I have had debate after debate on this issue with union representatives and Government officials.  Unfortunately no interest is aroused to correct this.  It is clear to me that we do not have a Department of Labour that looks after the interest of the entire potential workforce.  We have an arm of the labour union masquerading as a labour department.  One of its tasks is to apply regulations that will keep the unemployed from competing for jobs of union members.

Our country is in a similar position to Hong Kong in the 1960’s.  Hong Kong was flooded by refugees from China and Vietnam, which led to mass unemployment levels.  There were no jobs and the Hong Kong British Administration could not do much to help.  What they did was to adopt a policy of what they called “positive non-intervention” – that meant no strict labour laws, no minimum wage laws, a low 16% tax rate, and regulation only for safety – otherwise leaving the economy in the hands of the market.  At the time Hong Kong’s per capita GDP was 40% of that of the mother country (UK).  Twenty years later the capita GDP was 140% of the UK’s, and it is now 150%.  Hong Kong has for many decades been first in the world in economic freedom ranking.

I truly find it difficult to understand why our political leadership find it easy to adopt policies that work against vulnerable people, than those policies that should empower them.  In my view, for as long as we fail to identify education as the tool to empower our people, our current situation can only get worse.  The poor public schooling system is unfortunately compromising the future of South Africa’s young people.  They pass through the schooling system and emerge without basic literacy and numeracy.  Tragically, a large percentage of our young people instead of facing an optimistic future full of promise, face a bleak future of unemployment and poverty.  Lack of money for education is not a problem.  Management of schools and the quality of teaching appear to be the source of the problem.  These Shotgun approaches been currently adopted to address our transformation agenda will never yield the desired outcomes.  Real and sustainable transformation will only happen when provision of proper education becomes a national priority.

Finally, I have been talking about the rule of law and the proper functioning of the courts and the law enforcement agencies.  At the same time, you know that I am a strong supporter of capitalism, free markets, and economic freedom.  You need to know that there is no inconsistency in my views.  The rule of law is an essential part of capitalism and free markets.  Check the most economically free countries in the world and you will find that the rule of law is central to the way they function.  It is also no accident that those countries, such as Hong Kong, Singapore, New Zealand, Switzerland, Mauritius, UAE, Canada and Australia, have among the highest per capita incomes and consistently high growth rates in the world.

South Africa can join those economically free nations.  All we have to do is for government leaders to start the following:

  • Fix our education system
  • Repeal all race-based laws
  • Allow an independent criminal justice system to apply the rule of law
  • Remove aspects of the labour laws that make it difficult for small business to operate, such as minimum wages that make people unemployable
  • Protect our Constitution
  • Encourage active civil society
  • Allow space for press freedom
  • Strive to move South Africa to the top 20 ranking in economic freedom

Our country owes it to the legacy of the first democratically elected president of this new nation, Mr Nelson Mandela, who wanted us to be the Rainbow Nation; the Rainbow Nation concept that captured and won the hearts and minds of the world.  The concept that united all of us as South Africans.  We enjoyed the glory of being citizens of this beautiful land called South Africa, and in the process, the economy of our country responded positively.  We can do it again.

Our country is currently in dire need of such leadership to navigate us to regain our lost status.  We can clearly hear our country crying every day.

And I thank you