5 December, 2016
Clem Sunter on SA'S future
Africa is at an economic crossroads, like the political crossroads of the early
1990s, and needs to have an economic Codesa to ensure its future stability.
This was the prognosis from renowned scenario planner Clem Sunter at a business
event that Dolphin Bay attended late last month, where he outlined the key
"flags" likely to determine events in South Africa in five to ten years' time.
The event was hosted by the Energy Efficiency Forum of the City of Cape Town
and attended by business representatives including members of the National
Business Initiative, to which Dolphin Bay belongs.
Clem is a former CEO of Anglo Gold and Uranium Division, turned scenario
planner. In the 1980s, under his watch, Anglo American outlined two crossroads
South Africa would have to face. The first, reached at that time, offered the
choice of the High Road of a negotiated democracy.
Many years into this democracy, they predicted, the country would face the
possible Low Road of failed economic growth. We are facing that possibility
now, Clem told the business gathering.
Scenario planning provides a tool for plotting possible futures, so that
choices can be made about which path to take. It entails determining the
current "red" and "green" flags that are likely to determine future events,
then looking at how these might unfold in five to ten years' time.
In South Africa, corruption is currently an extremely large red flag, and the
future "could go either way", Clem said. On the one hand, the extent of
government corruption was extremely alarming. On the other, corruption is being
exposed by the media and institutions such as the Public Protector and
Constitutional Court, and politics is more dynamic in South Africa than in countries
like Brazil and Venezuela, both of whose economies were downgraded to junk
status. These points give some room for optimism.
Another important flag is the need for visionary, inclusive leadership. South
Africa enjoyed a brief "honeymoon period" under Nelson Mandela, but divisions
have been increasing ever since, and a country must be united in order to
"We are more divided than at any point since 1994," Clem said. "We've got to
look around for inclusive leaders, to turn the red flag of division green."
The quality of our infrastructure is another possible flag, and the jury's out
on this one, too. Encouraging developments include the recent end to
load-shedding. However, our road infrastructure is among that that is
Pockets of excellence are another flag, and the one giving the greatest cause
for optimism. South Africa has many of these: good schools, for example. The
question is whether these institutions are used as models to uplift their
poorly performing institutions, or whether they will be "dumbed down".
The most important flag is the extent of economic freedom in South Africa, Clem
said. We now have a record unemployment rate, and need to create one million
new businesses, to create five million new jobs, relatively soon. To achieve
this, entrepreneurship is crucial. He pointed out that along with several
visionary presidents, it was in fact entrepreneurs who made the US great.
However, the National Development Plan has not dealt with this issue
adequately, our economy is not conducive to developing entrepreneurs, "and big
business is not doing its bit."
Given these flags, there are three possible future scenarios, he said. One is
that South Africa takes the High Road, turning all the flags green. In this case,
we will stay in the world's economic premier league. Clem gave this scenario a
The second is that we will take the Low Road, in which our economy continues to
falter and hopes are dashed across the board. In this case, we will be "quietly
forgotten" on the world stage. He gave this a 45% probability.
The third possibility is that that the Low Road will deteriorate into a
wasteland, in which South Africa becomes a failed state marred by continuous
conflict. The risk of this scenario increases, the longer we stay on the Low
Road. This scenario is about 10% likely, he said.
"We really need an economic Codesa, or at least a proper conversation about our
economy, to turn things around," he said.
Clem's scenario-planning book "Mind of a Fox", co-written with Chantell
Illbury, was published three months before the 9/11 terrorist strikes in New
York. Initially little known, the book became an overnight hit because it
contained an open letter to then-US president George Bush, warning that his greatest
challenge would probably be a terrorist strike on a major US city. This
prediction was not coming from other quarters, and Clem and Chantell have since
been feted by many governments and intelligence agencies for their insights on
mapping future scenarios.
Source: Dolphin Bay Chemicals