SPEECH BY FORMER PRESIDENT F W DE KLERK TO PSG KONSULT NATIONAL CONFERENCE:

SUN CITY, 2 MARCH 2007

NATIONAL CREDIT INDABA, SANDTON, 12 JULY 2007

 

 

THE NEW SOUTH AFRICA AT THIRTEEN

 

Next month the New South Africa will be thirteen years old.  Our new society will be a teenager – and shares many of the well-known teenager attributes:

• It is growing strongly – perhaps by 5% or 6% next year;
• It is still unsure of itself – still struggling to find an identity;
• It is often volatile – with perplexing changes of mood;
• Every now and then there are unsightly and embarrassing eruptions.

 

We share the age-old concerns of parents of teenagers:

• Will our progeny continue to abide by the sound values that we tried to instil since birth?
• Will it keep the right company? – or will it be tempted to join the wrong gangs?
• Will it stay off drugs and avoid all the loose-living and the other temptations that threaten the development and well-being of young states?

 

In assessing our teenager we must never forget the remarkable progress that we all have made since 1994.  At the same time, we must not allow the fact that we are doting parents to make us blind to clear problems, shortcomings and threats.  In particular, we need to scrutinise report cards to see how the new South Africa is faring by comparison with its peer group.

 

There are a number of such international assessments.

 

Perhaps, one of the most important is the United Nations Economic Development Programme’s Human Development Index.  It provides an indication of how countries are faring in their common endeavour to improve the lives of their citizens. The Report for 2006 provides interesting – and sometimes disturbing – reading for South Africans.

 

In the first place it is gratifying to note that our GDP calculated at parity purchasing power in US dollars is now 509.3 billion dollars making us the 20^th largest economy in the world – in the same league as countries such as Turkey, Argentina, Poland and Thailand.   This also gives South Africans a respectable GDP per capita income of US$ 11 192 – 53^rd highest in the world (compared with US$ 39 676 for the United States; US$ 30 821 for the United Kingdom; US$ 8 195 for Brazil and US$ 4 211 for Egypt).

 

This, however, is where the good news ends.  In terms of the Human Development Index (HDI) South Africa figures 121^st on the list of 166 countries – with an HDI of only .653.  The HDI is a composite of three indices – the life expectancy index (ours is .37), the education index (ours is .80) and the GDP index (ours is .79).  This places us in the company of much poorer countries like Mongolia, Egypt and Nicaragua with an HDI position 66 places lower than our per capita GDP position.  The trends are also negative: in 1975 we had a HDI of .655 which increased to .735 in 1995.  From then it began to decline – to .69 in 2000 and to .666 in 2002.

 

The factor responsible for this negative development is, of course, AIDS.   According to the Report the HIV prevalence in South Africa in 2004 was  18.8% in the 15 to 49 age groups – the highest in the world after our neighbours Swaziland, Lesotho, Botswana, Namibia and Zimbabwe.  As a result, life expectancy at birth has declined to 47 years.  AIDS is by far the main reason for South Africa’s poor HDI performance which is, perhaps, a sobering reminder of the enormously negative real impact of the disease on our society.

 

Another negative element that emerges from the Human Development Report is the continuing and chronic inequality in our society.  South Africa emerges from the report with a GINI coefficient of 57.8, the 12th highest in the world.  The top decile of our population earns 33 times more than the poorest decile.    The only countries with worse GINI coefficients are two or three in Latin America and several in our own region: Namibia – the worst – has a coefficient of 74.3. By comparison, in Sweden with a GINI coefficient of 25, the richest decile earns only six times as much as the poorest decile.

 

In other areas South Africa does well:

• we spend a respectable 5.7% of our GDP on education and between 1990 and 2004 improved literacy in the 15-24 age group from 88.5% to 93.9%;
• we spend a total of 8.7% of GDP on health services;
• manufactured products now account for 63% of our exports.
• we have increased the number of telephone lines from 93 per 1000 in 1990 to 107 per 1000 in 2002.
• more spectacularly we had 428 cellular subscribers per 1000 by 2004 (compared to only 77 per 1000 in the rest of Africa and 714 per 1000 in the high income OECD countries).

 

All this is gratifying.  But it does not alter the two realities that emerge so clearly from the Human Development Report: the devastating impact of the AIDS catastrophe and the continuing and unacceptable gap between rich and poor in our society.

 

We fare much better in terms of another important report card – the annual assessment of political and civil rights that is carried our by Freedom House in New York.  South Africa is accorded a rating of 1 for political rights and 2 for civil rights – where 1 is the highest grade and 7 is the lowest.   This makes us one of only 11 “free” countries in Africa.

 

We do quite well in terms of the Economic Freedom Network’s annual survey of governance.  Its World Economic Freedom Report grades countries around the world according to more than 45 different factors, including taxation, trade and monetary policies, law and order, labour flexibility, market regulation and the independence of the judiciary.

 

South Africa is placed 53^rd out of the 131 countries surveyed.  It has the fourth freest economy in Africa, where it is beaten by Botswana, Mauritius and Zambia.   We are given a mark of 55% in respect of the size of our government; 82% for sound monetary policies; 69% for our trade policies; and 63% for our regulatory approach – including 51% for our labour market regulations and 55% for government regulations

 

We also compare quite well with most countries regarding corruption.   In terms of Transparency International’s annual survey, we are 46^th best in the world.   According to the survey 35% of the population of Africa reported that they or someone living in their household had paid some form of bribe during the preceding 12 months.  The comparative responses for North America and the European Union were 2%; for Asia and the Pacific 7%; for the newly independent Asian and European countries 11%; and for Latin America 17%.  Interestingly enough, the figure for South Africa was only 5%.

It is more difficult for us to obtain comparative report cards for crime – except that according to a World Health Survey in 2002 homicide levels for poor and middle income countries in Africa were 22 per 100 000 compared with 27 per 100 000 in poor and middle income countries in Latin America and only 1 per 100 000 in rich European countries.  South Africa’s homicide rate of approximately 40 per 100 000 is alarming by any standard.  This means that the chances of being murdered in South Africa are forty times higher than they are in Europe.

 

And so a picture of our 13-year-old begins to emerge from all the dry statistics:

• almost top of the class in terms of our Constitution and democratic system;
• growing healthily thanks to sound monetary and trade policies (although we have to watch the size of government and over-regulation);
• doing well in extending some services to the people;
• but struggling with huge and unresolved problems of AIDS, poverty, inequality and violent crime.

 

Understandably, we worry about the future:

• In particular, will our youngster adhere to the sound constitutional values that we have tried to instil since birth?
• Will our teenager be tempted by the easy life-style of populism and the quick fixes of precipitate wealth redistribution?
• Will he hang out with nice kids – or will he be tempted join the Chavez gang?

 

Undoubtedly, 2007 will be a key year – and may very well determine our future for the next thirty or forty years.   A great deal depends on the outcome of the current struggle for the soul of the ANC between the COSATU/SACP/ANC Youth league and those who would like to maintain the general direction laid down by Presidents Mbeki and  Mandela.   This struggle will be fought out at the ANC’s forthcoming National Policy Conference and particularly at its National Conference in December.

 

Unfortunately, those of us who are outside the ANC Alliance will have little or no say in this process – which will nevertheless determine the environment in which we will all have to live and work for the foreseeable future.  Perhaps, like concerned relatives, our role should be to give friendly but discrete advice – perhaps along the following lines:

 

We must maintain the values on which our new society is based.  Those values are articulated and entrenched in our Constitution.  The New South Africa will succeed or fail according to our ability to adhere to the Constitution and the national consensus that it represents.  It is for this reason that my Foundation has established a Centre for Constitutional Rights to support the constitution; to monitor any developments that might affect it; to inform South Africans of their constitutional rights; and to help them claim their rights.

 

Our constitutional democracy is young and fragile.

• We must resist attempts to undermine the independence and the standing of the judiciary;
• we must affirm our rights to speak our own languages; to practise our cultures and to educate our children in the language of our choice – since these rights constitute the foundation of healthy inter-community relations in multicultural societies like our own; and
• we must protect reasonable property rights in accordance with the Constitution since property rights are absolutely essential for continuing economic growth and social well-being.

 

At the same time, we must address the serious problems that confront us and that are so evident from the young South Africa’s report card:

• We must do much more to alleviate the suffering caused by AIDS.
• We must do much more to address unacceptable levels of violent crime.
• We must address the ongoing and unacceptable inequality and poverty in our society.

 

Both AIDS and crime are existential crises and require the mobilisation of whatever national resources might be needed to combat them.   Government claims that its anti-AIDS programmes will halve the HIV infection rate.  Let us hope that this is so – because successful action against AIDS will do more to improve our Human Development Index than action in any other area.  There are no quick fixes for crime – but what we require urgently is a clear indication that we have the will and determination to take firm and decisive action.

 

It is also critically important that we should take effective action to address the root causes of poverty and inequality.  The main cause of  poverty is unemployment, which increased for the black population from 36.2% in 1995 to 46.6% in 2002.   Less than 10% of the total number of people in the poorest decile of the population are employed compared with more than half of the total number of people in the top income decile.

 

What then is the main cause of unemployment?   Many relevant answers come to mind – including

• retrenchments resulting from the intense competition in the globalised economy;
• lack of skills and training;
• sluggish foreign and local investment in the economy; and
• competition for jobs from the huge and growing number of illegal immigrants.

 

However, another central cause is our rigid labour legislation.  It has raised the real cost of labour way above levels in other emerging economies with which we must compete in global markets.  High costs and over-regulation are a major disincentive to the creation of new jobs – particularly for small and medium-size businesses.

 

Clearly, we need to develop a labour system that establishes basic minimum standards for all. However, in a country like South Africa much greater flexibility is required, especially for medium size and small businesses.

 

And so South Africa is about to turn thirteen.  As with most anxious parents, we love our teenager dearly.  We can’t help showing friends the latest photos and bragging a little here and there about school grades and sporting successes.

 

The fact is that the New South Africa with all its growing pains is so much better than the old one.

• I thank God every day that we now live in a country where all its citizens are equal before the law; where we have taken important steps to liberate ourselves from the burden of racism, exclusion and division – without for a moment discounting the enormous challenge of creating a better and more equal life for all our people.
• I thank God that our most fundamental individual and collective rights are now protected by a strong Constitution and Bill or Rights – and are not subject to the whims of politicians and bureaucrats.
• I thank God that all South Africans can walk with their heads held high in the international community – that instead of being the pariahs of the world we are now regarded as one of its shining examples.

 

However, if our teenager society is to successfully weather the turbulent years ahead it must abide by the tried and tested values in our Constitution.   At the end of the day it needs to do little more than to honour the commitments that it has already made in terms of NEPAD to adhere to democratic standards and to abide by international norms of good governance.

 

If it does these things I have no doubt that it will continue to develop into a strong, mature and successful adult.