Leadership Discussion

ON THE WAY TO CREATING A NEW NORMAL

Scientists, accountants, economists and politicians are known to enjoy speaking in formulae, codes and tongues that ordinary people can’t readily decipher. Can we set jargon aside and find each other on where to go post Covid-19?

With economy said to be in recession, rating agencies branding it ‘junk’ and GDP figures inducing migraine when compared to 25 years ago, we need to convince ourselves that the country isn’t going to the dogs and as a people we are not reduced to junk. Are our identified economic growth-acceleration sectors performing?

Custom vs Imported Strategies

The jumping onto the different global bandwagons, including edging out primary production industries in favour of the “progressive” economies have seen us artificially borrowing foreign problems and making them ours. No one would dispute that global waves such as the information age, the service, knowledge and now digital economy are innovations to serve countries that are under-populated, labourconstrained and/or land-strapped. These are things South Africa doesn’t suffer from.

Structural Unemployment

The problem with us as South Africans is that we can have the sophistication of a fourth world (science/tech-wise), aspirations of a third world and complexes of a first world. We have a high population of uneducated people. Yes, uneducated in the sense that the education is nil-for-purpose considering our resources and what the economy really needs. We send all our students into management-this and management-the-other, killing our technical skill capacity that would enable us to exploit our natural resources and maintain decent lifestyles for all through meaningful work and self-sustainability.

Dearth of Technical Skill

We phased out technikons and turned everyone into theoretic masters or esoteric gurus that can’t put real food on the table. This is characterised by the flocking of youth from ground-abundant “homes” into sardine accommodation and precarious makeshift structures waiting day-in-day-out for “management” jobs that they are illequipped for.

Covid-19 and Economic Re-Start

Criticising or analysing the situation ad-infinitum won’t help. The challenge brought by the Coronavirus to the world is one opportunity for everyone - every country, to redial and restart their economies from zero, in a fit-for-purpose way. Alas, the thought may be a couple of weeks too late. Already, the progressive easing of lockdown is as rational as it is a reflex, as logical as it is desperate, with industries competing about whose voice can shout the loudest, whose lawyers have the mightiest bark and whose threats are most menacing.

Haphazard Emergence from Lockdown?

To think that Covid-19 is said to be devastating to those with compromised immune systems, underlying ailments including pulmonary weaknesses, yet, there’s a fight to lift a ban on cigarette sales – with an argument that people can still buy “other junk” such as sweets and chocolates when shopping for essentials would be laughable if it were not so perilous.

Yes, just like a baby needs milk but cries for a pacifying dummy; we need bread but cry for chocolate, crisps and cigarettes. And yes, the tobacco industry is responsible for a great number of people, certainly from an employment point of view. So, a case may well be made to the powers that be – especially if there’s also the ‘spin’ that tobacco components are used for medicinal purposes.

Whereas it’s possible that whoever has enough eloquence or financial clout to twist the Covid-19 advisory committee’s arm will probably get their industry back at work. If it were to be safety-assured with people as beneficiaries instead of sacrifices, that would be one thing… but then, that particular horse may have bolted. But who says the proverbial war has been lost? We may yet win this!

With Gold heydays over to boost GDP, and most of it having found homes in foreign vaults, we need to re-imagine what value South Africans can eke out of their current resources. We recall three sectors that the President suggested to accelerate economic growth, for which budgets were re-directed. For now, we can put a spotlight on Tourism – particularly seeing that a major strategic part of may be at the brink of operational ruin.

Tourism – The new Gold?

Some minister dubbed Tourism “the new Gold” and affirming this, the President headlined it among priority sectors for accelerated growth, along with Agriculture, Manufacturing/textiles, rural/township industries and SME businesses. While, admittedly, Tourism and Hospitality eases entry into employment and can absorb significant numbers in a short space of time, most of it is sustained by unhealthy and unsightly conditions for those at the bottom-end. Up to eight people can be crammed into inner-city bachelor or 1-bed apartments, or tiny backrooms in townships – risking their lives as they commute or walk home at all ungodly hours. This isn’t so much due to greed of employers, but save for a few conglomerates, tourism companies tend to be medium to small family ventures who are dependent on fluctuating market demand and therefore cannot commit to major business loans or investments.

Tourism “Poverty”

Even the jobs they afford workers are hardly secure - nor can the majority pay enough for employees to thrive. As a result, the sector is a haunt for desperate immigrants who, with no local family ties restricting them, can work the unpredictable hours with relative ease. I stopped counting the number of local tourism “graduates” who have traded tourism for call centres doing nothing even remotely tourismorientated.

The rest are in permanent/rotational internships with different tourism outfits. Those enjoying security are employed by government or state-owned agencies who are compelled to maintain them for as long as possible.

So, to what’s good to salvage the South African economy and how to contain or mitigate future risks...

Strategy and Ground Implementation Mismatch

While no one could have predicted the Covid-19 havoc, it looks like the budget committed in 2018 to accelerate growth has been slow gaining traction on the ground. Strategy hasn’t quite connected with the execution. This is because a looming demise of SAA has raised an outcry in the tourism industry, since it is seen to potentially compromise tourism access to the country.

Star Performer Stunted?

This would hit the business tourism arm of the sector even more, since bidding for large events and conferences relies on partnerships in the

value-chain, including hosting venues, accommodation, land and air transportation. The formation of Convention Bureaux throughout the country was due to the size and measurability of the economic impact brought about by planned major international events, exhibitions, conventions and summits. This also which lend themselves to better business forecasting than leisure tourism as they can be targeted, planned and scheduled several years ahead with well-calculated value to the economy. Business Tourism events are also important as they can be used to fill up low-occupancy periods to ensure a continuous flow of tourism outside of peak holiday season. Having SAA as a partner helped complete the chain, even though it may have meant the airline discounting the block purchases – impacting the profitability levels.

China Model / Market Study

The China intra-country tourism case-study is a great inspiration for any country seeking to flatten tourism fluctuations and create stability for the sector traders. The obvious advantage China has that South Africa lacks is the size of ‘the market’. China has the population numbers and far more ready tourism consumers according to the number of young, healthy, ‘educated’ and working citizens. The Chinese universities population alone could feed the South African tourism market many seasons over. South Africa, on the other hand, has less of mobile, ‘affluent’ youth, and the older folk are tied down with grandchildren as opposed to the Chinese empty-nester wanderlust community.

Domestic Tourism Unrealised Potential

What little domestic travel South Africa enjoys relatively speaking, brings much less income than what international tourism delivers on a per person per day spend calculation. A re-imagining of domestic tourism is needed to make it accessible to more people, but if income levels are constrained, hard-working South Africans are still likely to prioritise clothing, car-repayments, and suburban rentals than build a travel fund. Also those who travel would rather book at wellestablished hotel or guest house than at an “unpredictable”, township or village homestay.

Growth Opportunity

The exception here is if an establishment is located close to a friend or colleague’s home and as such comes “guaranteed”. Tourism that lends itself to this is social events tourism, where a group travels for a ceremony or celebration – a party, wedding, funeral or religious gathering.

Suburban/Village Imbalances

The economic situation and low-demand from international visitors sees township/rural establishments squeezed out by more luxurious suburban B&B’s. B&B’s in suburbs are generally more readily welcoming and hospitable given smaller-size households and larger accommodation with sprawling grounds around safe, walkable neighbourhoods. Suburban owners also have relative ease to maintain international word-of-mouth promotion, high-profile ad presence and endorsements across websites.

Community Apathy & Neglect

Besides challenges that new or smaller operators may experience in accommodation, South Africa is yet to have locals’ commitment in building, maintaining and showcasing local natural attractions. Projects built around iconic nature spots tend to experience stopsand-starts either due to non-sustained funding, or unsustainability due to disputes about who of the locals should operate, participate in or benefit from the attraction. As a result, one finds a number of sites that had tremendous potential and viability on paper, left to dilapidate.

Also, with many South Africans born in poverty-stricken rural areas or brought up in relative township poverty, there is little excitement around making a weekend home in the middle of nowhere, roughing it up on the way there or living an adventure with limited conveniences.

Tourism Exchange Strategy

If anything, the most loyal tourism consumers in South Africa are tourism officials themselves. Right there, probably, lies the opportunity. If every home owner were to turn into a host, it might start increasing appreciation for the natural attractions in the local neighbourhoods, and stimulate creativity and innovation in making the homes special for overall unique experiences for guests.

Agriculture

When it comes to other “priority” sectors and programmes, including Agriculture and township small industries, there is hopefully better progress and prospects. I am hoping that many of the producers that are supplying supermarkets during lockdown are operations representative of the diversity of South Africans, particularly to include those at the bottom-most end of the economic scale.

Township Trade and SME Businesses

On the township businesses and SME front, it is uplifting that tradesmen are allowed to work and serve communities in case of household emergencies. Agriculture, health, emergency household maintenance are essential cogs of the South African economy wheel, less so than household insurance, retail clothing and e-commerce ventures, if you ask me.

Education

What I would like revved up is an education strategy that will enable all pupils and students to not just catch up with their scheduled work for the year, but to have a review of the curriculum to ensure that 80% of what is taught and studied feeds into or supports the “real” priority areas and essential sectors of the economy. Urgent priority should be given in establishing a curriculum that enables South Africa to make profitable use of what she has to create meaningful living for all her people.

But then, back to whether we need jargon to measure of our economic heart beat? Where do we find a measure that is simple to understand and actively contribute toward with strategies, policies and everyday actions?

Or, should we simply get the results on the priority sectors into which we poured and redirected funds to accelerate growth? How much did we invest? How much impact has it had – on jobs, on quality of lives and the multiplier effect in the economy?

What proposals are out there, aside from ramping up production or manufacturing of the essentials underscored by the lockdown? There’s a thought that might sow a positive seed, from one game-changing social economist…

He proposes that instead of arbitrary computational measures that have little significance or tangible impact on the ground, countries move toward measuring things that have a meaningful day-to-day impact on every citizen across the social and economic strata. While GDP measure can continue to help with the tracking and comparisons of different eras of our economy, there’s value in exploring other more qualitative measures of an economic’s ‘health’.