SPEECH BY FORMER PRESIDENT F W DE KLERK
8 MAY 2004
THE NEW SOUTH AFRICA AFTER TEN YEARS
EN ROUTE TO THE FIRST WORLD
Ladies and Gentlemen
At first glance some of you might be asking yourselves what relevance South Africa has for people living in Germany. Yes, you will know that South Africa has completed a remarkable transition from being the isolated and embattled country of apartheid fifteen years ago to a model multiracial democracy today. You will also know about and admire Nelson Mandela for the remarkable role that he played in promoting reconciliation in our country. Some of you may have visited South Africa on business or on holiday. You might have seen our wonderful game reserves and beaches; you may have visited our vineyards and the beautiful Cape of Good Hope.
But, if you are like most Europeans you will probably be in two minds about South Africa:
On the one hand, you will admire the success of our transition from apartheid to non-racial democracy. You may be aware of our tremendous potential.
On the other hand, you will have misgivings about all the stories you have heard about crime, about AIDS and about the on-going crisis in our neighbouring country, Zimbabwe.
However, in the final analysis, you will probably shrug your shoulders and conclude that whatever happens in South Africa is in any event unlikely to have much effect on the lives of people living in Moenchengladbach, in Germany.
I would like to speak to you today about how South Africa has progressed during the past ten years and what the prospects are for our future. But before I do so, let me deal with the reasons why developments in South Africa are indeed important to people living in Europe.
One word really encapsulates all the reasons one could advance – globalisation! In a shrinking world the problems of one region will inevitably become the problems of other regions, and ultimately of the whole world. Likewise the success of emerging economies and developing countries will bring benefits to the whole global village – to rich and poor countries:
- Diseases like AIDS – which first appeared in Africa – do not observe international boundaries;
- As we saw a few years ago, economic crises in emerging markets can have serious negative consequences for the whole of the global economy; and
- Conflicts and instability in distant societies can reverberate throughout the whole international community. The attacks on New York and Washington on 11 September 2001 brought this fact home with chilling clarity. Who would have thought that religious fanatics hiding in caves in distant Afghanistan could possibly pose a threat to the hi-tech nerve centre of the world’s most powerful economy in down-town New York?
In our globalised society such problems and conflicts will sooner or later breach international borders and affect the interests of us all.
Within this framework it is of fundamental importance to Europe that stability and development is achieved in the underdeveloped parts of the world, of which Africa forms an important part. And within Africa, South Africa has a pivotal role to play.
Against this background I want to fill you in on the status quo in South Africa.
In the first place, it is quite important to understand that South Africa is not like Europe – even though we have a fully developed first world sector that is as modern as anything in Europe or North America. On the other hand we are not like Africa either – even though parts of our country are still locked in third world poverty and underdevelopment.
In fact, South Africa is in many respects, much more like other middle-income countries in Latin America and Asia. Like Mexico and Brazil, like Malaysia and Thailand, we are a country in transition.
We share many of the same challenges with other middle income countries:
- We are experiencing the same enormous flow of people from rural areas to our cities;
- As a result most of us are battling with the same housing problems and proliferation of urban shanty towns;
- We experience the problems caused by great disparities between rich and poor;
- We all have to deal with poverty and unemployment and the crime and social problems that go hand in hand with deprivation;
- Our economies are moving away from dependence on the export of primary products to the development of the manufacturing and services sectors;
- Many transition countries are also wrestling with the challenge of establishing strong and abiding democracies with freedom, equality of opportunity and security for all;
- We, like many others, also have to contend with the reality that our societies comprise different ethnic, cultural, language and religious communities. In our case we have 11 official languages!
We are on the road between the third and first worlds.
The following factors will determine whether we – and other middle income countries – will be able to complete this journey successfully:
- Our ability to maintain social and political stability and cohesion.
- Our ability to adopt and implement sound fiscal, financial and economic policies; and
- Our ability to compete in global markets.
Our social and political stability will, in turn, depend on our success in
- Strengthening our young democracy and in entrenching principles of constitutional government – maintaining a “Rechtstaat” in the full sense of the word;
- Delivering essential services to all our people through good and effective governance; and
- in maintaining sound relations between our numerous ethnic, cultural and linguistic communities.
Ten years after the birth of the New South Africa I am pleased to be able to report that we are doing quite well.
We have held three free and fair national elections and provincial elections. We have an Independent Electoral Commission which is functioning independently and effectively. We have also seen the smooth and peaceful transition from our first president to our second president, after the retirement of President Mandela.
There are, however, some problems:
- As we again saw in our election last month, most South Africans are still voting along ethnic lines and have yet to make the leap to non-racial value driven politics.
- This means that the ANC will remain the governing party for the foreseeable future because of its wide support among black South Africans
- The opposition is fragmented and will not be able to mount a credible election threat to the government in the near future. This will only change if it can achieve greater unity and if it develops the ability to attract significant black support. So we do not really have a very effective multiparty system.
- The result of the present single party dominance is that Parliament is not nearly the dynamic forum that it should be.
Democracy, however, is not confined to the national Parliament. It also presupposes the reasonable autonomy of the organisations composing civil society to which people belong: the clubs of which they are members; the companies for which they work; the religious institutions where they worship, the schools and universities where they educate their children.
South Africa has strong and well-developed civil society institutions, including influential and well-supported churches; a vibrant private sector, strong trade unions and professional organisations and a full range of well-developed non-governmental organisations.
Democracy also depends on the rule of law and the protection of basic rights.
We have an excellent Bill of Rights and a strong and independent Constitutional Court. We have many institutions that have been established to enable citizens to claim their rights. Nevertheless, some warning signals are flashing in this area. Some rights – particularly those that were included in the constitution to protect minorities – are being eroded. These include, in particular, language, education and cultural rights and freedom from discrimination. Members of the white minority – and to a lesser extent of the coloured and Indian minorities – fear that affirmative action provisions in the constitution might be abused to introduce new forms of racial discrimination.
Good governance and the government’s ability to deliver effective services to the people, will also be an important factor in ensuring social and political cohesion.
The reality is that the Government has not always been able to deliver on the promises that it has made to the electorate – partly because many of the promises were not achievable and partly because of delivery problems that it has experienced.
In some areas the record is very impressive:
- More than 1.4 million new houses have been built since 1994 and many others are in the pipeline.
- More than 6.5 million people have been provided with access to fresh water.
- Millions of South Africans have been provided with electricity. Much remains to be done – but the progress has often been impressive.
- The Government has trebled the number of people receiving welfare grants to 7.5 million – mostly children and pensioners.
In other areas of delivery, the performance has not been encouraging:
- Crime remains a very serious problem – although the government claims that it has turned the corner and that it is now beginning to win the battle. The battle will be won only when the government succeeds in reforming the whole justice chain: we need a better-paid and more effective police force; we need greatly streamlined courts that will deal with cases quickly and effectively and give sentences that will truly deter criminals; and we need prisons that are not seriously overcrowded.
- Health services in many parts of the country have deteriorated since 1994 – and the government has failed to come to grips with the AIDS pandemic. Fortunately, it has now publicly accepted that AIDS is caused by the HIV virus and is greatly increasing expenditure on its anti-AIDS programmes. It has also started to implement a programme to provide antiretrovirals to HIV and AIDS victims.
- Also, although expenditure on education is massive – the results achieved are often disappointing.
Finally, social and political stability will depend on our ability to maintain positive relations between all our diverse ethnic, cultural and language communities. Inter-community relations are relatively positive.
- Since 1994 we have laid the foundations for the creation of a new, overarching South African patriotism that will bring all our communities together.
- The integration of formerly white schools has progressed with remarkable goodwill and with surprisingly few negative incidents.
- Throughout society – in business, sport and civil society – South Africans of all races are living and working together with remarkable ease.
Inter-community relations will, however, be negatively affected if communities feel that their languages and cultures are being threatened or if they feel that they have become the subjects of unfair discrimination.
Despite this and the other problems that I have identified I have no doubt that we in South Africa will be able to maintain the social and political stability that we will need to complete our transition to the first world.
How are we doing with regard to the second requirement that I mentioned – our ability to adopt and implement sound fiscal, financial and economic policies?
This is the area in which the ANC Government has performed most effectively.
- The IMF has consistently praised the government’s fiscal controls and the Reserve Bank’s steadfast campaign against inflation.
- The budget deficit has been cut to only 1.1% in 2003 compared to 9.1% in 1994.
- Inflation has been halved to less than 6%.
- Interest rates have been cut to 8% – the lowest rate in 23 years;
- The Government has shown its willingness to proceed with privatization and other free-market policies, even in the face of strong opposition from the trade unions and many of its own supporters.
- A recent report by the US-based Centre for Public Integrity gave South Africa’s anti-corruption mechanisms a rating similar to those of countries like Australia, Italy and Germany.
We are beginning to reap the benefits of these sensible policies:
- Since the end of 2001 the South African Rand has regained more than 80% of the value that it had lost against the US$ – making it one of the best performing currencies in the world;
- The International ratings agency Standard and Poor’s has revised its outlook on South Africa from stable to positive, while affirming the country’s BBB- long-term foreign currency debt rating and its A- long-term local currency debt rating.
- All of this is opening the door to greater investment flows and predictions are that our economy will grow by more than 3% this year. This is not as fast as we would like – but in today’s international circumstances it would not be a bad performance.
The Government has been less successful with its labour policies.
Its rigid and prescriptive labour legislation has driven up the price of labour and has created avoidable hassle factors for employers. The result is that since 1994 the economy has lost almost half a million jobs in the formal sector at a time when job creation should have been one of its main priorities. Unemployment, in turn, lies at the root of the unacceptable poverty and deprivation in which too many South Africans are still forced to live.
Fortunately, there are belated signs that the Government accepts the need for less rigid labour practices – but any reforms will be fought tooth and nail by the unions.
We are also doing very well with the third requirement that I identified for successful transition to the first world – our ability to compete in global markets.
- Perhaps one of our greatest successes since 1994 has been the growth of our manufactured exports. In 1994 they accounted for only 36% of the total compared with the 54% contribution of mining. By 2002 our manufactured exports had grown to 58% of the total and mining’s share had diminished to less than 35%.
- In 2001 we exported more than 100 000 cars and trucks. Most of these were locally manufactured BMWs, Mercedes-Benzes and Volkswagens. What is even more gratifying is that the quality was exceptionally high. An American agency found that the quality of BMW’s produced in South Africa was better than that of any car manufactured in Europe – including BMW’s own mother company in Munich – and the second best in the whole world.
- Tourism to South Africa is booming. Last year it grew by 20% – faster than virtually any other destination in the world.
- South Africa has shown that it is able to successfully host very large international events – such as the World Conference on Sustainable Development in Johannesburg last year – and the very successful World Cricket Cup competition that has just ended. (The fact that our national team did not do very well is no reflection on the organisational success of the tournament!).
- South Africa has also produced a number of international companies that are capable of competing on a global basis – including mining giants such as Anglo-American and Billiton; insurance companies like the Old Mutual and Sanlam and SAB Miller, the world’s second largest brewery conglomerate.
- South Africa’s banks and financial institutions have also shown that they can compete with the best.
For all these reasons, I am confident that South Africa will be the first African country to attain full first-world status. It will not happen within the next decade or two – but we are on the right road:
- We have the democratic and constitutional institutions to assure social and political stability;
- We have a proven track record of sound fiscal and economic management; and
- Year by year, we are proving that we can compete successfully on the international stage.
There is, however, no room for complacency. It will take a great deal of hard work and good communication to assure success.
- We will need to strengthen and entrench our constitution and ensure that all South Africans will be able to enjoy all the rights that it guarantees;
- We will need to maintain open channels of communication between our communities and between all our communities and the Government to ensure that we all pull together in the transformation or our society;
- Civil society will need to join hands with the government to ensure that it improves its ability to deliver essential, health, education, security and social services;
- We – and the international community – must continually encourage the government to continue to implement the sound fiscal and economic policies that are increasingly enabling us to compete successfully in global markets.
My small foundation is working in a number of these areas – particularly in supporting and entrenching our constitution; in facilitating effective and open communication between community leaders and the government; and in encouraging minorities to become enthusiastically engaged in addressing the common problems of our society.
By doing all these things I am confident that the miracle will continue and that South Africa will successfully complete its journey to the first world.