Social Contract as a way to further an inclusive economic agenda - CNBC Africa

Social Contract as a way to further an inclusive economic agenda

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by Thabile Manala 0

Social contracts still need to be developed to bridge the inequality between communities and private sector.

Social contracts still need to be developed to bridge the inequality between communities and private sector.

At this month’s National Development Plan (NDP) roundtable, the panel addressed how the social contract mandate between stakeholders needs to utilised for a collective economic upliftment.

Michael O’Brien-Onyeka, Executive Director of Green Peace Afric, explained that “When you are looking at social contract, you are looking at two end products. There is the business side and growth dynamics on one side and there’s the human development dynamics we are looking at [on the other side]. “

O’Brien-Onyeka said merging these two sides will not come overnight but to foster inclusion, cohesion and nursing growth in unsupported sectors. This could mean rejuvenating BEE as a means of addressing financial inclusion on a broad scale.

Stephen van Coller, Chief Executive: Corporate Investment Banking for Barclays Africa, cited an example in the farming sector where they put in minimum wages, however farmers started employing less people which is not the outcome that was required nor desired.

This illustration spoke to the need for sustainability in social contract endeavours. “We spoke about wealth tax and higher tax but as long as [there is] mistrust this extra tax is going to go into a black hole then you are  going to get huge resistance, “ he said.

In agreement, Khanyisile Kweyama, CEO of Business Unity South Africa said, in redressing the social contract the issue of wage inequality must be confronted. “That is a perfect example of stakeholders sitting around the table and saying ‘you cut your salaries’, ‘you stop the strikes’ .“ She said that is what getting “dirty”  is about when attempting to mend social injustices

Yacoob Abba Omar, Director of Operations for Mistra, said there is a need for compromise. “People have been coming there with mandated positions and they go for maximalists and refuse to compromise. When they do, they fail to communicate that to the communities.”

Omar said all the social contracts that have worked, have always carried the essence of compromise “over a long term”.

O’Brien-Onyeka substantiated saying that social contracts are never a “win-win” situation but it is important to elevate the losing party.

 

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