biggest economy. i will be discussing all of that with these two. there they are, the head of one of south africa's leading business groups, hotels with a top priority for any new government has to be fixing the basics, electricity, water and transport. also, the man in charge of economic policy for the democratic alliance. as the second biggest party, they are said to have an influential say in the future of south africa. plus, working harder in your work day. the big boss of the us software giant that helps power netflix, levi's and fedex tells me why ai will bring a step change in human productivity. wherever you arejoining me wherever you are joining me from around the world, once again, a warm welcome. this week, we are focusing on south africa, one of the most advanced economies on the continent, but one with huge challenges for the new government to get to grips with. unemployment, power cuts and infrastructure are just the start. that is despite the imf, the international monetary fund, forecasting by the end of this year, south africa will once again be the continent has largest economy, head of nigeria and egypt. the anc came out on top in the recent elections with 40% of the vote, but for the first time since the advent of democracy in 1994, nelson mandela's party didn't win a majority, making a coalition government very likely. this election has made plain that the people of south africa expect their leaders to work together, to meet their needs. as you can see here, the economy has grown significantly since the end of apartheid in the i990s, but amid widespread difficulties. it has really struggled to grow in the last decade or so. 0ne really struggled to grow in the last decade or so. one of the most pressing issues in the election was unemployment. 0ne pressing issues in the election was unemployment. one in three south africans that could work don't have a job. africans that could work don't have ajob. it's africans that could work don't have a job. it's one of the highest rates in the world. as a result, over 24 million people, or 39% of the population, receive some form of government welfare payments. that's just one thing that has pushed up government debt. 0therfactors include less money coming in from taxes as well as higher interest rates and public sector wages. growth has also been hurt by foreign companies investing less money. it was down a third last year, as power outages and unreliable infrastructure just continue to make it hard for companies to operate. and all of this is being felt rather acutely and people's everyday lives, as our reporter explains from johannesburg. this is africa's most industrialised nation, but it also remains deeply unequal, with millions of south africans struggling to survive. water and electricity supplies are erratic, and the really high cost of living has forced some to borrow money to buy food. 24 million people receive welfare, but from a really small tax base. so what do people want from the new government? more business opportunities for younger people. i've been looking for a job for two years as an animator and haven't found anything so far. i think firstly, more opportunities and work. — i think firstly, more opportunities and work, just to make things much more _ and work, just to make things much more accessible for them. secondly, we need _ more accessible for them. secondly, we need to— more accessible for them. secondly, we need to have electricity. | more accessible for them. secondly, we need to have electricity.- we need to have electricity. i think my greatest _ we need to have electricity. i think my greatest frustrations _ we need to have electricity. i think my greatest frustrations are - we need to have electricity. i think my greatest frustrations are in - my greatest frustrations are in terms — my greatest frustrations are in terms of— my greatest frustrations are in terms of the _ my greatest frustrations are in terms of the service _ my greatest frustrations are in terms of the service delivery. i my greatest frustrations are inl terms of the service delivery. a my greatest frustrations are in - terms of the service delivery. a lot of south _ terms of the service delivery. a lot of south africans _ terms of the service delivery. a lot of south africans with _ terms of the service delivery. a lot of south africans with the - terms of the service delivery. a lot| of south africans with the economy at the _ of south africans with the economy at the moment, _ of south africans with the economy at the moment, things _ of south africans with the economy at the moment, things are - of south africans with the economy at the moment, things are tough. i at the moment, things are tough. perhaps _ at the moment, things are tough. perhaps the — at the moment, things are tough. perhaps the biggest _ at the moment, things are tough. perhaps the biggest problem - at the moment, things are tough. perhaps the biggest problem is i perhaps the biggest problem is unemployment, a ticking time bomb that has particularly affected the youth, but there are also electricity cuts caused by ageing power plants and corruption, and those have forced many small businesses to close, and impacted the economic growth. in order for the economic growth. in order for the anc to form a government, it needs to get into a coalition. the main opposition, the democratic alliance, is seen as pro—business, a move opposed by the trade unions. 0ther move opposed by the trade unions. other parties have more radical positions, nationalising mines and land grabs without compensation. here in south africa's square mile, international investors and businesses, many of them listed here in thejohannesburg stock exchange, watching closely. so there you go. that's what economic dysfunction means with millions of south africans. butjust how disruptive is it to big business? to find out, i have been catching up with the boss of one of the country's most influential business groups, business leadership south africa. a real pleasure having you on the show. let me start with this, because your membership include some of the biggest companies in south africa, both local names as well as some big foreign companies like anglo—american and amazon. i guess the question is, what are the most important changes that they all want to see from the new government? there is a lot that business would like to see in this country. i think some of those in the main relate to the trading environment. 0ur trading environment is not conducive at the moment. and when you look at it, it is really a function of the network industries. you've got four network industries in this country. three of them are dysfunctional. you have water — that is dysfunctional. you've got energy — that is dysfunctional. you have transport and logistics — that is dysfunctional. the only one that is working as it should is telecoms. so i really think that ours is to, and our plea, you know, to the government is for the government to really fix the basics. and as business, we are committed to continuing to work with government and to providing whatever support that they are going to need. we are very clear as the business community that we are not going to support an administration that is actually going to usher in another era of economic destruction. busi, i want to talk to you about south africa's unemployment. in dollar terms, it has shrunk nearly 10% since 2011, so it begs the question, why has it been such a struggle? it is because you don't have political will. 0ur problems are huge, but not insurmountable. you need a government that is committed to ensuring that we can fix our challenges. business has been calling for the reform agenda for quite some time. a reform agenda thatis quite some time. a reform agenda that is going to ensure that the policy clarity and the policy setting that will require the business community to address, and that has not been forthcoming. busi, i want to talk to you about south africa's unemployment. it's one of the highest rates in the world — 33%, 45% for young people. and just last year, the united nations called it a ticking time bomb that threatens social cohesion and strains public resources. so, busi, what's it going to take for the private sector to create the jobs they need? and what do you fear will happen to the country if the new government doesn't tackle this properly? it's a recipe for disaster and we are very conscious of that as the south african leadership, both business and government. you know, arguably, the issue of unemployment is the biggest albatross that hangs around our neck as a country. south africa has got nine provinces, so only two provinces have got more people that are employed. the rest of the seven are sitting with more people that are unemployed, which is just not sustainable. with such high levels of domestic inequality, you are never going to be able to attain social stability. so we are definitely at risk, you know, of the erosion of social cohesion. you don't create jobs. jobs are a function of supply and demand. you need to create an environment that is conducive for investment. because then, when investment comes in, you know, then jobs can be an outcome. many of us know, busi, that one of the most high—profile problems south africa faces is the electricity blackout, with power regularly going off for, what, ten hours a day because there is more demand than supply. so just describe what impact that actually has on businesses right across the economy. the impact has been huge of not having the right energy security. rather a whole lot of small businesses have actually shut down, a whole lot of big businesses have continuously raised this as an issue that is the main contributor to the trading environment that is not conducive. but i must say...established a business—government partnership, you know, which is focusing on fixing the three areas of energy, transport and logistics and crime and corruption. and i really think we have actually done very well in the partnership. and that is one of the things that we're hoping that this new administration will continue. until two years ago, you are on the board of the state power firm, but you quit over criticisms of the way it was being run. its chairman are said not long ago that the blackouts were now fixed. so do you on south africa's business community have the confidence that that is the case? and if so, do you think that will encourage more investment in the future if you know you have electricity?— future if you know you have electrici ? ., , ., electricity? so, we do believe that the progress _ electricity? so, we do believe that the progress that _ electricity? so, we do believe that the progress that has _ electricity? so, we do believe that the progress that has been - electricity? so, we do believe that the progress that has been made. electricity? so, we do believe thatl the progress that has been made in dealing with the issues of energy security is a sustainable one, and a lot of people are sceptical on south africa right now, saying we haven't had load sharing because of the elections. it is definitely not that. we know that because we have been in the engine room with escom over the past year, and i believe when you get such basics right, you are well on the way to start attracting investment back into the country again. it does appear that foreign companies just don't seem to want to invest at the moment in south africa. i mean, the central bank says foreign investment was down a third last year. but, busi, surely those external investments are just, well, so crucial to the economy. how do you get them to come back? and that is precisely the problem. as much as south africa is very strategic in the african continent, we are not the only game in town. capital has many addresses. capital is like water, it will always follow the path of least resistance, and it is really difficult for capital to lend here, as a country. as much as south africa is very strategic in the african continent, we are not the only game in town. you know, you are currently seeing east africa eating south africa's breakfast, you know. and it becomes difficult because, once investors leave, they leave. and when they land somewhere else, it's normally a long—term commitment. but we do hope, you know, that because of the strategic nature of the south african economy, because of the size of our domestic market, because of all those strengths, because of the rule of law that we have in this country, we really hope that once we get our house in order, then we will start to see investment trickling in. busi, the credit rating agency moody's, it's actually warned that a coalition government is likely to make it difficult to run the economy so, well, do you agree with that? or do you think that having the anc work with other parties just might be, well, what's actually needed to give the economy the jolt that it clearly needs? i actually believe that that is what is actually needed. you know, i don't think that they can continue having total control. i really think that they need someone to hold them accountable. the coalition governments that we've actually had in the municipalities have actually been chaotic. they've had ineffective decision making, there's been disunity, but it doesn't mean that all coalition stories cannot be a success. and, busi, let me end on this. given south africa's prominence on the continent, just how damaging are its economic struggles for the rest of africa? they're actually very damaging. i'm a firm believer, you know, that south africa is really the country that is supposed to... ..be the tide that lifts all ships, all ships being the rest of the 54 african countries. that is why it is incumbent and very urgent that we actually get our story right and get our house in order. and we are well on our way of doing so as a country. well, on that point, busisiwe mavuso, the big boss of business leadership south africa, a pleasure having you on the show. thanks for your time. we'll talk to you again soon. brilliant. thank you so much. thanks for inviting me. so what can government do to tackle these problems? well, the anc, as we know, won the election, but didn't win a majority. so it is looking to form a coalition. we asked to speak to the anc finance minister, enoch godongwana, but we were told he wasn't available. so we decided to speak with the man in charge of economic policy for their potential coalition partners, the democratic alliance, who came second with 22% of the vote. dr dion george, a real pleasure having you on the show. and, dion, let me start with this. from your perspective, as the second biggest party, and as we record this possibly part of a coalition government, dion, what's the most pressing challenge facing south africa's economy right now? well, there are several problems with our economy at the moment. i think chiefly is that our economy is not growing. and as a consequence of that, we have unemployment and we have poverty, and people are actually hungry. what comes from that is a lot of difficulty with the population being able to feed themselves sufficiently and also to be able to grow as they would like to, and also, fundamentally, it is for everybody in south africa to become what they are capable of becoming, and people are capable of becoming, and people are actually hungry. 81% of households in south africa are not able to put enough food on their table. and there are 5 million children in south africa that are starving today. that's the fundamental problem we have here. dion, thejobs crisis. it's pretty damning in your country and one of the highest rates in the world. how on earth do you fix that? and how long could that take? now, the reason why our unemployment is so high is obviously our economy is not growing. we need to get our economy to grow. and the reason why it's not growing is that government is in the wrong place in our economy. it needs to build infrastructure. it needs to provide education and health care and social security, and then get out of the way and let business thrive in south africa. that's the problem. government regulation has strangled business in our country, which obviously affects the tax rate. the other part of the problem is we have labour laws that are not working. now, we have a minimum wage. what it's done is it's priced workers out of the market, employers are not willing to employ people at the rate of the minimum wage. so we have proposed that, specifically for people who are aged between 18 and 35 who have not been employed for the past two years, that they would be exempted. so we're not proposing to throw everything out, but we're trying to find a way that will enable us to go forward without unravelling everything else. dion, we know, you know, the widespread infrastructure when you look at south africa generally, we are not a poor country. in fact, we are a rich country. in fact, we are a rich country. the only reason we are on our knees is because we haven't got the right policies, and that is fixable, and so this election has been an enormously important milestone in our history, because now, we do in fact have an opportunity where we can possibly negotiate a better future. dion, we know, you know, the widespread infrastructure problems with electricity blackouts, rail and port delays — they're all taking a big chunk out of how much tax the government rakes in. and i'm just kind of wondering, does that make it imperative that the government borrows the money right now to fix the problems for the long term? well, i think it is important that government would probably need to borrow more money for infrastructure. but the difficulty that we have, we already have a problem with our debt—to—gdp ratio. we're at 74%, so there isn't much space for government to borrow any more money without crowding out service delivery. for example, for eskom, we have the blackouts all the time so our economy can't grow because business can't keep the lights on. so what we need to do is change the model, inject the private sector into it, and that would then take pressure off government's national balance sheet, which then would make more money available. dion, the credit agency moody's, it's warned that any coalition i have to ask, because others will ask this question, but do you think it isjust a ask this question, but do you think it is just a matter of time before south africa needs a bailout from the likes of the imf? if we carry on spending this way, it may well happen. however, i do believe that it can be avoided if we make the right choices. at the moment, what is happening is, yes, we are paying an enormous amount of money on interest payments. any household will know that you can't borrow so much that you just can't pay it back. if government does not cut back on its spending, it will end up that way. dion, the credit agency moody's, it's warned that any coalition will find it difficult to run the economy. and the head of south africa's biggest trade union, which is, of course, an important ally of the anc party, they told the sunday world newspaper it was firmly against an anc—led coalition that included what it called "the racist democratic alliance". so i've got to ask you, dion — do you think these differences can be overcome? and how important is that for south africa's economy? well, i think it always boils down to choices. and the trade unions in particular do not like the da's economic policy because we believe it's necessary to rein back the public sector wage bill. we need to rein back the strength of the trade unions in our economy. if economy doesn't grow, you don't have tax revenue and you're unable to deliver services. the da's position is quite simply this — we have got a se