In order to discuss the question of leadership we must first ask ourselves the question: “What is a leader?” One dictionary description of a leader that 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 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.
Not only the leader or principal wheel of a machine has to be in good working order but the whole machine. 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 group 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 the 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?
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 Singapore 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 De Klerk 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. South Africa will not succeed economically unless we have properly functioning courts and enforcement agencies.
I am a strong supporter of capitalism, free markets, and economic freedom and 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 the kind of leadership that will enable us to regain our lost status. We can clearly hear our country crying every day for such leadership.
This article is an edited version of the address by Herman Mashaba at the Nelson Mandela Bay Leadership Summit on 10 June 2015
Author: Herman Mashaba is a former Chairman of the Free Market Foundation. This article may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the author’s and are not necessarily shared by the members of the FMF.