BLSA CEO’s newsletter – 29 November 2021

POSTED ON: November 29, 2021 IN by Admin

By Busi Mavuso

Clearly the fight against this pandemic is far from over. We need to fight it on the health front, but we also need to fight the economic consequences it inflicts.

The Omicron variant could not have come at a worse time. Just as our tourism industry was gearing up for a proper December season, the shutters have been decisively pulled down at unprecedented speed. This is utterly devastating for the industry, as well as our wider economy.

Foreign governments acted hastily, and I support president Cyril Ramaphosa’s call last night for those countries to immediately reverse the restrictions they imposed. Our diplomatic corps has its work cut out to make sure it works closely with foreign governments to rethink. Other countries’ behaviour is largely outside of our control, but it is in our control to decide what to do domestically – protect the economy and vaccinate everyone. That is why I was pleased that last night the president signaled the importance of vaccine mandates and a task team to explore mandating vaccines for specific activities. I applaud these steps, including in discussions at Nedlac with business, civil society and labour, on making vaccination mandatory where appropriate.

The president urged observation of existing restrictions but did not to impose any additional measures that would damage the economy. The existing protocols absolutely must be properly observed. But we have learned from the last 20 months that restrictions on domestic economic activity have a serious impact on the economy, leading to job losses, poverty, and ultimately worse health outcomes. It would have been a mistake to place further restrictions on the economy when we simply don’t know what the effects of the variant will be. Any purported health gain from restrictions must be compared to the losses from reduced economic activity. And achieving the health objectives is best achieved through the vaccine programme. The president placed the focus where it should be: getting as many South Africans as possible vaccinated as soon as possible.

Our tourism industry has been dealt another serious body blow. We cannot compound that by adding alcohol restrictions or restrictions on movement locally. Tourism employs disproportionate numbers of women and less skilled workers. It is particularly important in the fight against poverty. While tourism has been the epicentre of the economic fallout from the pandemic, our official efforts to support the industry have been poor. The one fund set up under the department of tourism to support the industry ended up being stalled by litigation. We must do better. There is more business can do too and I will be working with colleagues in organised business in the coming days to work out ways we can support the industry.

As we continue to fight this pandemic, I appeal to government not to score any own goals with its own efforts to manage the pandemic. Key to avoiding such own goals is consultation. Unfortunately, in previous measures, business has been taken by surprise and regulations have caused unnecessary damage. Government needs to understand the consequences of different policy options and business needs to be fully informed to be able to plan to minimise consequences.

Alcohol restrictions are an obvious example. Complete bans have strongly stimulated the illegal alcohol industry, giving resources to criminal networks that enable much wider criminality. It will already take years to undo this. We have also unnecessarily harmed the export trade by restricting transport of alcohol and harmed industrial uses of alcohol, all unintended consequences that could have been foreseen with consultation. There really is no possible health benefit from banning the safe consumption of alcohol in homes and hospitality venues provided other measures like social distancing are being strictly adhered to. It is unacceptable to make the alcohol industry the scapegoat after government failed to fully implement measures that target what matters: the transmission of the virus.

The real focus of all our efforts must be on vaccinating our population. The early indications are that the Omicron variant is showing higher infection rates among our young adult population. That reinforces the obvious point that it is not only the old and other vulnerable groups we should be worried about – all adults should be vaccinated if we are to limit waves of infection.

Our vaccination rate has been slowing as we exhaust the numbers of people who are willing and able to access vaccines. The introduction of vouchers for certain segments is a positive intervention to drive wider takeup – we have to recognise that many of our people live hand to mouth and do not have the time or resources to seek out a vaccine. We need to ensure vaccines are easily available and that people are compensated for the costs of accessing vaccines. I support the introduction of vaccine mandates by employers, both to keep those who are vaccinated safe while at work, and to increase pressure on others to get vaccinated. We need to also impose vaccine mandates on key transmission points including public transport and largescale events.

Clearly the fight against this pandemic is far from over. We need to fight it on the health front, but we also need to fight the economic consequences it inflicts. We need to urgently face up to the economic impact of the new variant. I will be working with organised business and our social partners to do that and implore you to join the effort.

Second wave imminent

The effects of surging global inflation arrived on our shores with a major jolt through the R1.21/litre hike in the petrol price early this month, taking it to a record high. Combined with the jarring 15% hike in electricity prices this year, consumers are being hit hard, I wrote in Business Day.

We face a water and sanitation crisis with failing wastewater treatment and subsequent pollution of the country’s water resources a particular problem, I write in my fin24 column. A comprehensive set of measures has been put in place to address this in time – we now need to ensure SA’s notorious problems with implementation don’t again trip us up.

This is a weekly newsletter from BLSA CEO Busi Mavuso.

BLSA is a business organisation that believes in South Africa’s future and shares the values set out in the Constitution. In 2017, BLSA signed a contract with South Africa, committing business to playing its part in creating a South Africa of increasing prosperity for all by harnessing the resources and capabilities of business in partnership with government and civil society to deliver economic growth, transformation and inclusion.

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