Countries that will bounce back quickly from the Covid-19 crisis are those with a “diamond” economic structure with an 80 percent middle class, because it is the middle class that carries economies, not the rich, delegates at the Trialogue Business in Society Virtual Conference have heard.

The biggest ticking time bomb in South Africa is inequality, which undermines social stability, which means the quest of attaining a sustainable and conducive environment within which business should operate will continue to be elusive, according to Busisiwe Mavuso, CEO of Business Leadership South Africa.

Mavuso made the remarks while addressing over 300 delegates at the Trialogue Business in Society Virtual Conference on Tuesday afternoon on lessons from Covid-19 for the business and development communities.

“Covid-19 has exposed just how fractured South Africa’s democracy is and how unequal we are as a society. We need rational, pragmatic choices from government, labour and business,” she said.

“If this pandemic doesn’t make us, as leaders, carefully think about how we sustainably start to deal with our structural economic flaws, then I don’t know what will.”

Mavuso said that the economic outlook for 2020 was already bleak at the beginning of the year with a projected 0.3% economic growth. Unemployment data released in September recorded 2.2-million jobs lost in the second quarter of the year, following the shocking news earlier in the month that the economy shrank by an annualised 51% during the second quarter.

South Africa has been hampered in its response to the pandemic because many citizens lack access to running water, have no money for sanitisers, and live in overcrowded housing.

“It is for this reason that, as business, we need to be more intentional and deliberate about the role we play in society,” said Mavuso, further acknowledging the critical contribution of business to lessening the impact of the virus.

Interventions include assisting with the delivery and collection of medical equipment and food parcels, procuring personal protective equipment for frontline medical workers, and setting up the Solidarity Fund, she stated.

“The question we need to be asking is what now, where to from here, and what is required from each of the social partners in moving the country forward. All of our efforts need to be geared towards economic recovery, and what the country needs right now is rational, pragmatic choices to guide our actions.”

Mavuso said that while government controls the policy environment within which all operate, “we need government to come up with a president-led and cabinet-backed plan that we can all get behind with a common issue.”

The National Economic Development and Labour Council (Nedlac) partners had done their part by presenting the president with a proposed economic recovery strategy, and “what is required now is a pronouncement in this regard, as well as clear and decisive leadership from the top,” she said.

From a labour perspective, Mavuso said it was inarguable that the higher the cost of an input in production, the less of it would be used, especially where there are substitutes. Businesses can choose to work with fewer people, or with more machines, to increase productivity.

“A great deal of cost is created by regulation. Employers spend a great deal on labour disputes that end up in the CCMA or in court, a lot of production is lost to strikes, and many employers sit with unproductive or even destructive staff members because it is too difficult to fire them,” she said.