While globalisation has raised levels of prosperity, the distribution of this new wealth remains largely unequal, Clement Chinaka, MD of Old Mutual Corporate, said last week, adding that the mounting imbalance in wealth and power was increasingly frustrating voiceless ordinary citizens.
This, he said, was opening the door for populist political and economic rhetoric that promises social reform, said.
South Africa is the world’s second most unequal society after Brazil.
“It is quite clear from the widespread rise in populism that something is not working on a global level and that the masses are restless,” Chinaka told the audience attending the 2017 Old Mutual Corporate Wisdom Forum held in Johannesburg.
The event’s theme for this year was “Populism and Economic Reform”.
“Since the financial crisis of 2008, there has been a rise in discontent with the world order, including democratic institutions that are seen to benefit a small elite and exclude the majority,” Chinaka explained.
Bearing in mind that globalisation was breeding inequality and social ills such as xenophobic violence and crime, Chinaka wondered if populism was the real solution or it was just being exploited by a new type of elite to get into positions of control with no intention of ever addressing the underlying issues.
Gracing the event as a keynote speaker, former US secretary of state John Kerry regretted that the original meaning of populism has been lost.
“When I think of populism, I think of standing up for the average, everyday person who is being hurt by bigger forces he can’t control on his own, whether it’s the power of money in politics or an economic wave or corruption,” Kerry said.
“By that definition, we should all be populists. But what’s passing as populism these days isn’t populism at all, it’s ugly, divisive demagoguery that distracts us from addressing real challenges in a responsible way.”
Democracy is fragile, Kerry pointed out. “It is an experiment that each successive generation must give new meaning to. That’s why it is so important that we correct course, and seize the opportunities of this new world rather than wallow in its consequences. Demagoguery powered by anger is not the answer.”
Chinaka, who echoed Kerry’s sentiment, noted that while rejecting the current order was not the answer, there was however no doubt that some degree of change was necessary.
“We need to keep the good parts and listen to the concerns of the excluded masses to be more inclusive.
“To do this, we need to ensure that the capitalism dividend is shared more equitably among the population.”
Chinaka called on corporates to play a bigger part role in this new struggle.
They need to understand that doing good for the communities in which they operate is good business and not charity, and that corporate executive pay should be fair and reasonable, he said.
“Furthermore, we need to find a way to prevent immigration from driving wages down and, possibly most importantly, at society level, we need for democratic institutions across the globe to be more representative of the populations they serve.”