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Things are never as bad as they could be

An upbeat interview with retail tycoon Christo Wiese.

This interview has been conducted in Afrikaans, however the transcription is in English for the benefit of our English readers.

Good evening and welcome to tonight’s installment of RSG Geldsake. My name is Ryk van Niekerk. Of course, today is Youth Day, and like all other public holidays, we’ve decided to somewhat adjust the structure of our programme. We reflect, and talk to community leaders about what they see occurring. My guest today is Dr Christo Wiese – he’s one of South Africa’s leading entrepreneurs, and the mastermind behind many iconic corporate names such as Pepkor, Shoprite and Steinhoff.

RYK VAN NIEKERK: Dr Wiese, welcome to RSG Geldsake. I’d like to start with the current economic environment, there seems to be enormous uncertainties about what is going to happen. You’ve been active in the South African economy for decades, have you seen this level of uncertainty before? I assume the 70s and 80s produced their own surprises.

CHRISTO WIESE: Well, once you’ve reached my life stage, then you’ve learned a few things. And of them is that, like the laws of nature, there are economic cycles. This happens in every country and in every economy. Things go up and then things go down – and those who sufficiently manage their economy, go higher up, and don’t drop down so low. But nobody can escape economic cycles. In my opinion, in the last 50 years South Africa has been through tougher times than what we’re currently experiencing. There is no reason to believe that in this dark night, there won’t be a dawn again. Things will be better again.

RYK VAN NIEKERK: South Africans are very emotional people, and South Africa is also a country that doesn’t prosper as much as it can, but it also doesn’t end up as bad as people expect. But if one looks at that cycle, where do you see us on that trajectory – are we close to the bottom of the cycle?

CHRISTO WIESE: As an optimist, I have to believe that we are close to the bottom. To refer back to the point you made, General Smuts said of South Africa that this is a unique country where things never go as well as they should. But they are also never as bad as they could be. That is South Africa. And we have to make peace with that. And if we see it in that light – and especially if we compare South Africa with so many other countries in the world – and you can’t always just look at Switzerland, or Denmark, or Singapore. Look at all the other countries in the world, there are more than 150 of them. And then you see how many of them have tragedies way worse than us.

RYK VAN NIEKERK: Ken Owen, the former editor of the Sunday Times, also said South Africa is five years from the brink of a downfall, and he’d said that even in the 1970s.

CHRISTO WIESE: That’s correct, that’s correct, we are always five years from the brink of a downfall.

RYK VAN NIEKERK: But how do you think it will play out? You know we – many people simply point fingers to the president as the main cause of why things aren’t going as well as it could. How do you interpret what’s happening with us today? And in the short and medium terms, what are you expecting?

CHRISTO WIESE: Look, we first have to accept that at the moment we are still a society in the process of transition. We come from a certain regime, and we are moving towards a new regime. Of course you have to expect some turbulence in that movement or shift. The fact of the matter is that in all countries the most important factor determining how good or how bad the country’s situation is, is firstly leadership. Secondly, you have to judge whether the community members are generally good or bad people. Now, we can argue endlessly about the quality of leadership that we have in South Africa, and that we’ve previously had in the country. But one thing that South Africans have proven again and again is that they are good people at the core. We achieved something in 1990 and 1994 that I’m not aware that any other community with our specific history has achieved. So we are basically good people – the majority of people in South Africa are good people. We have to hold on to that, and from there good leadership will emerge.

RYK VAN NIEKERK: Look, I really hope what you’re saying – I mean I agree with you 100%, yet currently our nation is very agitated. We are dealing with race relations that are at a low point, we are dealing with money matters that are also at a low point. Let’s start with the human relationships, how do you think we can learn to coexist better, and perhaps reduce the racial tension that we currently have in South Africa?

CHRISTO WIESE: Can I just firstly say that I don’t agree that the relationships, the race relationships in South Africa is at a low point. I think there were times in the past where it was at a much lower point. You must remember, that a lot of us – and let’s call it by the name – from a white environment, now think race relations are at a low point. But if you were a black South African, during the years of states of emergency, and you were terrorized by safety police – you know all the stuff that came to light at the Truth and Reconciliation Commission, then can you really say that those black people during that stage had a better feeling towards the white nationals than they have today? So I think that is an oversimplification to say that we are at a low point regarding that issue.

RYK VAN NIEKERK: But since 1994?

CHRISTO WIESE: So I would say yes, it has – that rainbow nation shine, is definitely not as clear at the moment as it used to be. But you know, in our society we must look around us, not just at the bad things happening and the foolish claims that some people are making. Look at what is happening on the ground, how people are working together. How there is unity in addressing some issues together – there are thousands of examples. But as people we always focus on the incidents that are sensational.

It’s not if you – I mean, I literally work with tens of thousands of people, and there is no detectable racial tension in our work environment. But it depends, in the first place, on your own attitude I believe. But after saying all of that Ryk, then I would be a fool if I didn’t acknowledge that at the moment we are having a considerable amount of problems. And we have to work on them. You know, the issues within the ANC – it’s the ANC that need to sort out those issues. And if the majority of the people within the ANC are not good people, in contrast to what I believe, we will end up with a mess. But I believe there are enough good people to say that these things that are currently failing – can’t go on like this. And you see signs of that every day.

RYK VAN NIEKERK: But one of the things that really has to change in South Africa is our economy. We face enormous inequality and the economy is not growing fast enough to address that inequality. How do you think this economy can grow a bit faster in the short and medium term than the current rate?

CHRISTO WIESE: I think, Ryk, firstly we should not debate ideological approaches to the economy. We should be much more pragmatic. For example, why not make it easy for skilled people to obtain work visas in South Africa or to start a business. This has nothing to do with ideology, it’s only pragmatic. Why not start with – South Africa has a fantastic tourism industry. Why not take steps, that are possible today, to encourage tourism? I’m talking about stuff like visas, which many countries today can grant electronically – you don’t have to stand in a queue and apply for several weeks and spend thousands of rands. People tell me, if you live in the USA and you want a visa for Australia, you can do everything in your car on the way to the airport, and by the time you reach the airport your visa is ready. So why not look at things like that? Pragmatic things to boost our economy. And then, the horrible amount of things for someone to start a business, it’s a bloody nightmare! All the steps they have to take. And all this time government is talking about getting rid of the regulations, and make it easier, but every day it gets increasingly difficult. These are the things that we can do that can change South Africa’s economy in an instant.

And of course a lot of other things too. The biggest one of course, is uncertainty about policies. Nobody knows exactly what’s the Mining Charter, what it’s going to require – who is going to invest hundreds, millions or billions in a mine while you are unsure of the policies? The same goes for land ownership. There are talks, and speculations, and it goes this way and that, and no clarity emerges. That kind of stuff we can fix rapidly.

RYK VAN NIEKERK: If you had to wear your entrepreneur’s hat; do you think government will be able to fix its policies and plans that we are able to create a hundred black industrialists. Is it still possible, like in your case, to transform a small business that employees 15-20 000 people?

CHRISTO WIESE: Ryk, it is actually easier today. Because you have to remember back when we started, there were many restrictions. During the period of the Group Areas Act, we couldn’t, as a so-called white company, open businesses or shops in black or coloured areas. There were all kinds of rules and regulations. Secondly, we were welcome as investors or businesspeople in only a few other countries in the world. We were certainly not welcome in the rest of Africa. So today, especially with technology and all the things that go along with it, it should be in fact easier for entrepreneurs from South Africa. The trouble is the huge amount of red tape, that I just pointed out – this is one of the big problems why we are struggling so much to find entrepreneurs to start businesses and expand them quickly. There are a lot of them actually, it is not like nothing is happening. But a lot more should be happening than what currently is.

RYK VAN NIEKERK: We will now listen to some trade news, and then further chat with Dr Christo Wiese.

Part II

We are going ahead with RSG Geldsake, and we are further chatting to Dr Christo Wiese, the entrepreneur behind various big South African company names, including Pepkor and Shoprite.

One of the indicators that I follow a lot at the moment, and I think a lot of other South Africans do too, is the labour rates. And now again we see a record of unemployment rates, and that is one of the core problems we are faced with, especially among the youth. Today is Youth Day, and more than half of our youth just simply cannot find work. How do you think we should address that problem?

CHRISTO WIESE: Through resolving the issues that I have just brought up. To say, let’s just leave the ideologies for now, and we become pragmatic. I will tell you a story Ryk, and unfortunately this is a lengthy story. But I said this at a meeting that the president attended. I told him this story: My mother taught us that you don’t buy something because you need it, you buy something because you simply cannot survive without it. There is a huge difference between the two concepts. Then I also add the story of a young advocate that approached his senior to ask his opinion about an opinion that the young advocate had written. The senior advocate responded: I have bad news for you, but I also have good news for you.

So the young guy said so what is the bad news? Then he said the bad news is, in your attempt to handle this complex rights issue, you started off by asking yourself the completely wrong question. And then the young guy said, well what could the good news be then? The good news is that the fact that your answer is 100% wrong doesn’t matter then. Because you started by asking the wrong question. What is the question that connects these two stories? What is the right question to ask in South Africa? Not what do the people need, not what do the people want, the right question is what can the people not survive without? And the answer to that is that nobody can survive without a job. So tell yourself then, everything that I do as a government, will it pass this test? Will it create jobs or will it terminate them? Job opportunities. And if you operate according to that guideline, then you will be able to solve the unemployment problem. Just ask yourself, this thing that I’m doing now, will it create jobs or terminate jobs? We regularly ask this question in our companies – will these create jobs every year in our group? 10-15 000 job opportunities.

RYK VAN NIEKERK: Many senior executives had direct access to senior ministers during the process where TeamSA was engaging rating agencies not to cut our credit rating. This was obviously prior to the most recent downgrades. Surely this message must be carried across clearly in those meetings? Why is this not happening?

CHRISTO WIESE: The messages are carried across to this government, not by me, but by many other people. It is carried across exactly as it was with the former government, or governments, of this country. My experience is that these messages don’t easily find favour with politicians. Because too often the reaction is based on ideology instead of pragmatism. That’s how the world works. Now, we can’t give up hope, we have to keep sending that message, we have to debate. And then – we don’t have to reinvent the wheel, there are more than enough examples across the world where countries transformed from poor to rich nations. You can just go and look at what they’ve done. And then you can look at the countries that were left behind, and you can see what they did wrong, and which of the right stuff did they not do. It’s that simple, it’s not complicated.

RYK VAN NIEKERK: But many people love South Africa so much, and I mean across the racial boundaries, and there is a passion that South Africa should achieve success. Why do people get so frustrated that it’s not happening? And this goes back to the former conversation we had, you know we need to find people that unite. And sometimes I people expect the government to do something, without participating themselves.

CHRISTO WIESE: Yes we all have to do something. You now used the word “frustrated” – that is the correct word. If people ask me how I feel, then I’ll say I’m not feeling hopeless, but I’m bloody frustrated. Because we can so easily make life better for so many people in this country. It’s so obvious, and that is frustrating for someone that loves this country. And now I can also tell you after the trip I went on with minister Gordhan, I told people that it was clear that people across the world want South Africa to succeed. To be a successful country and to become even more successful. Everybody wishes that for us, but in the end it is in our own hands. And the point that you made – we all need to play our part every day to make the world here better.

RYK VAN NIEKERK: Dr Wiese, but in which aspect must the private sector also face themselves in the mirror? According to reports there are trillions of rands in cash on companies’ balance sheets that are simply not invested. And if the companies invest, they take this money abroad. Are there any conversations making the rounds saying these institutions are expected to invest in South Africa and in that way at least speed up the economic growth?

CHRISTO WIESE: Anyone that understands capitalism knows that a businessman’s sole desire is always to invest. But they can only invest if they can expect a proper return from that investment. Corporates never have an inherent unwillingness to invest, because it is their DNA, it’s what they want to do. They want to grow their business. So there is no unwillingness. But the climate must be suitable, and the policy framework must be suitable, so that that investor can see, whether they’re local or foreign investors, that he can have a better or equal chance of getting a return on his investment. And if the environment is suitable, for example the mining industry I just referred to, which person would invest billions in a mine where they don’t know the policy around minerals, all rights, and all the rules and regulations – you know the big struggle around “once empowered always empowered”, if you don’t know what you’re letting yourself in for, why would you invest?

RYK VAN NIEKERK: It’s clear that we need economic reform, how do you think it’s possible to bring about these changes in a short period? So that we can convince entrepreneurs to look at opportunities, to invest in factories to create jobs. Do you think this could happen rapidly?

CHRISTO WIESE: It can, it can. It once again depends on leadership, but you know you’re referring to populist statements right now. To everyone’s astonishment the Conservative Party lost a substantial amount of seats in the elections last week, and the Labour Party with a far-left leader, that also usually makes populist statements, made strong advances – that’s how the world works.

RYK VAN NIEKERK: Yes, and I assume you have a lot of contact with the senior government officials and ministers etc, is the message that you get there the same that we are getting from public platforms?

CHRISTO WIESE: I don’t have as much contact as people might expect, so yes, I can’t really give half an answer. I only have knowledge of the public statements that are already public.

RYK VAN NIEKERK: Just lastly, Dr Wiese, it seems to me that you’re a lot more positive than many other South Africans that I speak to you regularly, and this is quite pleasing to hear. And like you said we are at the bottom of an economic cycle, and sometimes things have to go badly, so that we can appreciate it when things prosper again.

CHRISTO WIESE: That’s true. All I ever tell people when they complain about South Africa – I’ll say yes, but in comparison to what? What do you think things are like in Europe with their migration problem. What do you think things are like in England now where they have a hanging parliament, where they have to negotiate Brexit. How comfortable do you think that is? Problems are everywhere in the world, our problems in my opinion, are relatively easy to solve. If we start using our heads. Other countries are stuck with problems that are virtually impossible to solve.

RYK VAN NIEKERK: Unfortunately time has run out, but it’s good to hear that there isn’t only darkness in our future.

CHRISTO WIESE: Thanks Ryk, all the best.

RYK VAN NIEKERK: That was Christo Wiese, he’s one of the big entrepreneurs of South Africa and he’s of course involved in various iconic trademarks such as Shoprite and Pepkor.

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