24 OCTOBER 2005



The New South Africa can justifiably be proud of its many achievements:



At the same time we must acknowledge some critical failures:


The most serious of these is the harsh reality that almost half our population has hardly benefited at all from our new democracy.   Ironically and unacceptably, South Africa today is a less equal society than it was in 1994. The poor have become poorer and the rich have become richer.


According to the IJR’s recently published Economic Transformation Audit – which I can strongly recommend –  there were more people living below the poverty line in 2001 than there were in 1996.


The reason for the persistence of poverty is not hard to find:  it lies in unemployment: 48% of black South Africans are now unemployed compared with 37% in 1995.   At the same time, many of those who are most seriously afflicted by poverty are experiencing a crisis with the delivery of services as a result of serious deficiencies in half of our municipalities.  The same people have to contend with the ravages of AIDS.


On the positive side, the government has dramatically increased access to clean water and electricity and far more children and pensioners now receive grants.


Nevertheless, for almost half of our population little has changed.  They are still marginalized; they are still dispossessed.  They have been left standing in the dust and deprivation of poverty while the old white – and new black – middle classes have sped on to new levels of prosperity.  Little wonder then that their frustration is bursting out in increasingly angry protests and civil disturbances.


I would submit that – together with AIDS – black poverty and unemployment are the most serious challenges that we face.  None of us in this hall – black or white – can continue to sleep peacefully while they persist.


But what should we do about them?  It is easy to prescribe solutions – but difficult to implement them.


Firstly, we should remove all impediments to employment:


Secondly, we must improve service delivery.  Generally, the problem is not a lack of resources but a lack of skills and planning.



Thirdly, we must – as a national priority – work together to improve education levels.  It is scandalous that the reading and mathematics levels of our children are worse than those of most African countries that have far fewer resources than us. I know that the Minister of Education, Naledi Pandor, is wrestling with these realities.  But it is not only her problem.  It is a problem that affects us all – and all of us must help her and the education authorities to do whatever is needed to change this situation.


I do not claim to be an educational expert – but it would seem to me that we should return to a common sense approach to education:


A great deal is currently being said written and legislated about black economic empowerment.  Few white South Africans have any conception of the scope of black economic empowerment and the impact that it is likely to have on their lives – and on the lives of all South Africans.

The government has embarked on an ambitious process of broad-based black economic empowerment that has as one of its central goals to redress ‘the imbalances of the past by seeking to substantially and equitably transfer and confer the ownership, management and control of South Africa’s financial and economic resources to the majority of its citizens’.

It has devised a Code of Good Practice that seeks among other things to determine the percentage of companies that should be owned by blacks; the percentage of management jobs that they should occupy; and the proportion of their goods and services that they should buy from black suppliers.

No-one can quarrel with BEE’s underlying goals.  Ideally, black South Africans should to be properly represented  at all levels of ownership, management and employment in the economy.  The question is: how can this ideal be best achieved in the real world?

The government’s answer is to try to pursue this ideal through legislation.  However, experience teaches us economic outcomes cannot be determined by legislation or compulsion.  More often, the result of such attempts is the opposite of their authors’ intentions.  I fear that it will be the same with BEE legislation.

How can the state determine ownership levels on an ethnic basis in a market economy?  How can we achieve BEE’s objective of equitably transfering ownership from whites to blacks without undermining property rights?

Experience teaches us the following hard lessons:


What then is the key to true empowerment?

In my view you do not empower people simply by transferring property to them or by appointing them to some or other job.


Real empowerment means enabling people to acquire the skills, the opportunities and the resources that they will need to add value and compete successfully in a tough and competitive world.


Once again, the key is education and training.  Once again, the challenge is to bring about a dramatic improvement in our education system.


At the same time, we need to ensure that the playing fields are even; that no barriers and ceilings are artificially placed in the way of any South African.  We must also ensure that black South Africans have easier access to the financial resources that they will require to start and develop businesses.


We need to see more black entrepreneurs – like my friend Tokyo – building up business empires – just as Afrikaners founded and built Sanlam, General Mining and Rembrant after the Second World War.


We should encourage companies to initiate share ownership schemes for their employees – not because this is required by law – but because it makes good management sense.


Companies should appoint and promote black South Africans – not because they are required to fill quotas – but because they are the brightest and the best.  I personally have no doubt about the ability of black South Africans to hold their own in any form of competition.


Deals should be structured between black and white businessmen – not as window-dressing and share-swapping exercises – but because both partners truly add value to the enterprise.


Above all, blacks and whites should be talking to one another about how back economic empowerment can be achieved in such a way that no-one is excluded.


I believe that we will make far more rapid progress toward true empowerment and equity by these means than by trying to legislate economic outcomes.


And lastly the question of racial estrangement.  I would be less than honest if I did not express my concerns in this regard.


All this is leading to a growing sense of alienation.


The sad reality is that most black and white South Africans continue to live on different planets.  We walk along the same streets; we co-exist in the same cities; but we often have diametrically differing views of the past, the present and the future.


I have experienced this in the meetings that my Foundation and the IJR have arranged between black and white academics and community leaders.  Over dinner, when we are speaking about our children and daily experiences we can find one another. But as soon as we return to our discussions about economic and social transformation we are worlds apart.  It is as though we have one roadmap of the country – and our black compatriots have another.  And so it is difficult for us to find one another and to identify the same route to the future.


At the heart of these differing perceptions lies the past.  For black South Africans the reality of white guilt and undeserved privilege is like the proverbial elephant in the room that only they can see.  They are exasperated that so few whites seem to notice it.


With all due respect to my friends Charles and Archbishop Tutu, these are issues that the TRC failed to resolve.  Perhaps we should have sat down – as black and white South Africans  – and locked the doors until we reached some kind of agreement on past.  Perhaps we should have emerged from that room only when we had drawn a map of South Africa with which we all could agree.


Despite all this, there is a great deal of goodwill between our communities – and particularly between members of the younger post-apartheid generation.  In my experience, the great majority of South Africans from all our communities want the same things and would dearly love to work together to build a better and fairer country.


Part of the solution is to keep talking with one another – as Tokyo and I are doing this evening.   Perhaps we can all make a positive contribution in our daily lives