Social progress is real issue – Abedian

080213 (L) Prof Steven Friedman and Dr Iraj Abedian Briefing the media in Rosebank Johannesburg on the trying find solution for the poor on Economy.photo by Simphiwe Mbokazi 453

080213 (L) Prof Steven Friedman and Dr Iraj Abedian Briefing the media in Rosebank Johannesburg on the trying find solution for the poor on Economy.photo by Simphiwe Mbokazi 453

Published Feb 11, 2013

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Ethel Hazelhurst

Much of the debate over South Africa’s economic policy is beside the point, according to Pan-African Capital Holdings chief executive Iraj Abedian. The central issue, he said, was not “business versus the poor or the left versus the right. It’s about social progress.”

Abedian spoke on Friday at a panel discussion in Johannesburg on how to make the economy work for the poor.

“Let’s not create false dichotomies between the interests of business and the interests of the poor,” he said. “The debate has moved on and business, by and large, is quite convinced that unless the broader social framework deals with poverty it will represent an embedded risk to the profitability and sustainability of business.”

On solutions to poverty, he said: “No government, no economy is big enough, rich enough, to take care of the poor. Over the long term the poor have to take care of themselves.”

He said the only real solution to poverty was to create the conditions for upward mobility. “In that context, our biggest failure has been the desperate state of education.” And he described the failed education system as the fault line in the economy.

“The economy has become skills intensive. No matter how much we push and pull, no matter who is in power and who is out of power, there is no way the economy can become less skills intensive. The days of low skills and no skills are gone.”

He warned that businesses would not turn back the clock and replace computers with typewriters and typing pools.

“Let us not pretend that, if we introduce subsidies or pacts, businesses will become labour intensive. The only place that does this is the public sector. That’s why the municipalities are so rotten because they want to fill up floors with a typing pool. Are you surprised that the poor get nothing?”

Education, he urged, should be made a national priority but even then it would take 20 years to enable upward mobility.

But an efficient state could create “dramatic changes” in the welfare of the poor within two to five years, he said.

In the medium term the issue to be addressed was state inefficiency “on the back of a number of political expediencies such as cadre deployment and employment equity”.

He said that, while these practices were understandable “for social transformation”, the “sum total of all those expedient, short-term interventions is state inefficiency at the expense of the poor”.

He noted that 45 percent of national resources were channelled through the inefficient public sector. “How do you think the economy and business and investment can continue if nearly half of gross domestic product is used in the way we read about in the newspapers every day.”

And he stressed: “In every society, left, right or any other, you cannot succeed in a developmental objective unless you have a state that is capable; that is focused and committed not to short-term but to long-term social goals.”

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