SPEECH BY FORMER PRESIDENT FW DE KLERK DELIVERED IN JOHANNESBURG, October 31 2012

SOUTH AFRICA: 1994, 2012 AND 2020

I have chosen as my subject this evening South Africa: 1994, 2012 and 2020 because I think that every now and then we need to take time from our busy schedules to consider

• where we have come from;
• where we now find ourselves; and
• where we are going.

It is especially appropriate to do so now - because I can recall no time since 1994 when so many South Africans have been so despondent.

We should remember 1994 - not only because it was the birth of our new society - but because it provides an important reminder that we South Africans have the ability to solve even the most intractable problems.

1994 arose from a solemn national accord that was incorporated in our 1993 Constitution and that was supported by parties representing substantial majorities in all our communities. After a long and bitter history it united our divided peoples - precisely because it addressed all our fears and aspirations and guaranteed all our rights.

1994 was our proudest moment.

Since then there has been a growing tendency for the ANC to claim sole credit for the establishment of our new society. There has been a progressive effort to airbrush out of our history all the other parties that played essential roles in establishing our new society.

1994 was, however, the culmination of a long historic process that involved all our communities and all our political parties - including the IFP, the old PFP and of course the National Party.

There is also a growing tendency for the ANC to downgrade 1994 and to regard important elements of our national accord as temporary compromises - compromises that it reluctantly accepted as a result of the balance of forces of the time.

1994 - and the subsequent 1996 Constitution - were the outcome of the genuine give and take process inherent in all negotiations. The final agreement constituted a solemn accord. It was at least as close to the original negotiating positions of the non-­‐ANC parties as it was to that of the ANC.

It contains all the basic rights that South Africa needs to maintain a free and prosperous society.

• It articulates the values of human dignity, equality, fundamental rights and non-­‐ discrimination on which the new South Africa has been established.
• It acknowledges the supremacy of the Constitution and the rule of law.
• It makes provision for all the institutions and mechanisms that are necessary for multiparty democracy based on accountability, openness and responsiveness.

It has served us well for the past 18 years.

Which brings me to 2012.

It is important to remember the many, many successes that we have achieved since 1994 - many of them as a result of government action:

• We have experienced 18 years of economic growth - interrupted only briefly by the global economic crisis of 2008.
• We have shown that we can compete with the best in the world, particularly in banking and financial services. And in sport as well!
• We have also made significant social progress:
  • The percentage of the population living in absolute poverty has declined from 31% in 1995, to 23% in 2008 - largely because of social grants.
  • 94% of households now have access to drinkable water;
  • more than three million housing units have been built - enough to house almost a quarter of the population - with another million units in the pipeline;
  • three quarters of the population now have access to electricity and sanitation compared with only half in 1994;
• We have experienced moments - like the 2010 Soccer World Cup - when we have lived up to Archbishop Tutu's characterization of us as the Rainbow Nation of God.

Nor would it be fair to blame all our present problems solely on the Government. The reality is that it has had to contend with enormous socio-­‐economic backlogs inherited from the past.

According to a recent World Bank study, the future prospects of our children are still determined by race and gender; by the status and education level of their parents; and by whether they live in urban townships or rural areas.

Neither would it be fair to blame all the problems that we are now experiencing on the past.

After 18 years in government, the ANC must accept primary responsibility for our current situation. One can hardly disagree with the diagnosis of the National Planning Commission regarding the roots of the crisis. They include:

• high unemployment;
• poor education - especially for black South Africans;
• poor public service delivery;
• corruption; and
• the fact that South Africa is still a divided society.

There is, however, another underlying cause behind all these factors: it is the Alliance's adherence to unconstitutional and fundamentally inappropriate ideologies.

In terms of the ANC's National Democratic Revolution ideology, 1994 was not the end of the revolutionary process - but merely an important beachhead on the line of march toward the establishment of, what it calls, a non-­‐racial democratic society. This revolution continues under the aegis of the ANC government and appears to be directed against the majority of white South Africans - whom the ANC still regards as "antagonists".

The goal of the NDR is in essence to redistribute property and jobs so that they reflect the demographics of the country at all levels in the private and public sectors -­‐ irrespective of what the Constitution dictates. This would involve an enormous process of social engineering in which people's prospects would once again be determined by race, rather than by individual merit and circumstances.

In accordance with the NDR, the ANC has unconstitutionally attempted to seize what it calls the levers of state power - including the public service, the security forces, parastatals, the judiciary and the SABC. It is also committed to staffing these institutions with its own cadres, often irrespective of merit or experience.

The NDR was the source of the radical policy proposals that were adopted by the ANC at its Policy Conference in June and that will be presented to the National Conference in December.

At the core of these proposals is the ANC's belief that the balance of forces has shifted sufficiently in South Africa and internationally for it to abandon the compromises it made in 1994. According to President Zuma, "We had to make certain compromises in the national interest... For example, we had to be cautious about restructuring the economy, in order to maintain economic stability and confidence at the time."

The ANC has evidently - and quite incorrectly - concluded that such caution is no longer necessary.

Its policy proposals include:

• the establishment of a "developmental state" which would be "capable of intervening effectively to transform economic relations, at the centre of our economic agenda."
• Reassessment of the future of the provinces;
• "state ownership, including more strategic use of existing state-­‐owned companies, as well as strategic nationalization, where deemed appropriate on the balance of evidence";
• greater state involvement in mining, falling short of outright nationalization;
•  the utilization by government of the assets of insurance and pension funds for state developmental projects; and
• accelerated land reform that
  • "must represent a radical and rapid break from the past, without significantly disrupting agricultural production and food security";
  • would abandon the principle of "willing buyer, willing seller";
  • would down-­‐grade private property rights to freehold "with limited extent"; and that would
  • prohibit foreigners "as a principle" from owning land.

The other ideology that has contributed to the present crisis is the Marxism-­‐Leninism of the SACP and Cosatu. It is one of the main causes of unemployment and of our failure to attract the foreign investment that we need for sustained economic growth:

• South Africa has the worst labour relations in the world. According to the World Economic Forum's Global Competitiveness Report it is the worst of 144 countries assessed in terms of co-­‐operation in labour-­‐employer relations;
• Cosatu has continuously raised labour costs without commensurate productivity increases - which has inevitably resulted in job losses. South Africa's flexibility of wage determination is the fourth worst in the world.
• Our labour legislation is amongst the most onerous anywhere. South Africa's hiring and firing practices are the second worst in the world.
• Cosatu's campaign to abolish labour brokers would lead to the loss of more than half a million jobs.
• Cosatu has steadfastly opposed proposals to open labour markets to the unemployed - including proposals at the ANC's 2005 National General Council for a two-­‐tier labour system and more recent proposals for a youth employment subsidy.
• It is destroying jobs by alienating foreign and domestic investors through its confrontational stance and open support for nationalisation.

On top of all this came the Marikana massacre of 16 August; the subsequent wave of violent and uncontrolled wildcat strikes; and hopelessly unrealistic wage demands. The Farlam Commission will no doubt inform us in January of all the circumstances relating to the incident. However, enough information has already been made available to raise the most serious possible questions regarding the behaviour of the police.

All this has negative implications for present and future foreign investment. According to the UN Conference for Trade and Development, foreign direct investment in South Africa has fallen by 43.6% in the past year - the largest decline among all developing economies. South Africa is dependent on foreign investment, not only for growth, but also to cover our large current account deficit.

On 27 September Moody's downgraded South Africa's sovereign credit rating from A3 to Baa1. Moody's referred to policy uncertainty ahead of the ANC National Conference in December and noted that, "The revision reflects Moody's view of the South African authorities' reduced capacity to handle the current political and economic situation and to implement effective strategies that could place the economy on a path to faster and more inclusive growth."

This, unfortunately, is where we find ourselves at the end of October 2012.

A rising tide of corruption, ineptitude, cadre deployment and inappropriate ideology has inundated much of the state sector and is threatening economic growth and jobs.

• Most of our schools have been drowned by this tide of dysfunctionality - leaving millions of failed school children floundering, out of their depth and with little or no chance of reaching the shore.
• Eskom, the SABC and South African Airways have been engulfed by mismanagement and incompetence.
• Black Economic Empowerment is used to enrich a small politically-­‐connected elite rather than to promote real equality;
• Billions of rands are channeled to poorly qualified tenderpreneurs;
• Government department after government department, municipality after municipality and parastatal after parastatal fail to achieve acceptable audits;
• The rising tide is lapping at the foundations of those departments and municipalities that continue to function. Throughout the sector some embattled public servants are attempting to stem the flood by shoring up dykes and building coffer dams. But they have an increasingly impossible task.

Substantial areas of high ground continue to stand proud above the deluge. They include the Treasury, the Supreme Court of Appeal, the Constitutional Court, the Public Protector, the Western Cape and the City of Cape Town. They also include great swathes of the private sector, our banks, our farmers, our mines and service industries that continue to perform with excellence.

Ironically, and perhaps predictably, these are the very institutions that would be targeted by the ANC's all-­‐encompassing developmental state.

Everyone - except the Government - agrees that we are facing the most critical challenges since 1994. Thabo Mbeki, Fikile Mbalula, Russel Loubser, Mamphela Ramphele, and many others have all raised their voices in alarm.

Which brings us to the road to 2020.

The progress we make along that road will be determined by a number of factors including

• the decisions that the ANC will take at its National Conference in December;
• the Government's ability to deal with the current wave of lawless protest and wildcat strikes;
• its ability to address the critical challenges of education and unemployment;
• our ability to uphold the Constitution; and
• the ability of opposition parties to mount a credible electoral threat to the ANC.

Recently Clem Sunter downgraded his future scenario for South Africa from a 50% chance that we will break through to first world success; a 40% chance that we will continue our present gradual decline and a 10% possibility that we will become a failed state. He still believes that there is 50% chance of success - but there is now a 25% chance that we will become a failed state.

I don't want to attach percentages to the high road, downhill road and precipice scenarios. I would, however, like to set out my views regarding the factors that will lead to these three destinations.

One of the routes to the high road lies through the implementation of the sensible and balanced policies set out in the National Development Plan. It would also require the Alliance to jettison its NDR and Marxist-­‐Leninist ideologies for once and for all and to work instead for the achievement of the vision set out in our Constitution.

Another route to the high road lies in the ability of opposition parties to form a broad electoral front that will be able to mount a credible challenge in the 2014 and 2019 elections. I have long supported such a development and enthusiastically welcome the initiative that Helen Zille has launched in this regard.

A third route to the high road might arise from a split between the increasingly fractious factions that make up the ANC Alliance. It is difficult to see how social democrats, communists, African nationalists and black capitalists will be able to remain under the same political umbrella forever.

Maintenance of our present downward trajectory would require the ANC to revert to the "First Phase" policies that it has implemented during the past 18 years. This should not be impossible since the ANC accepts that progress with the National Democratic Revolution is dependent on the prevailing "balance of forces" permit.

All the signals now indicate unambiguously that the balance of forces is not

propitious for the ANC to embark on its proposed "second phase" of the revolution.

However, even if it wishes to maintain the present downward trajectory, the ANC will have to take effective steps to restore national and international investor confidence. It will also have to do whatever is necessary to establish some degree of order and predictability in the labour market.

Finally, the route to the precipice has already been clearly sign-­‐posted by the ANC's policy conference and by the recent congresses of Cosatu and the SACP. All the ANC has to do to reach the edge of the abyss is to implement those policies and to continue to give its primary loyalty to the National Democratic Revolution rather than to the Constitution.

This is what the precipice scenario would look like:

• South Africa would not only fail to attract the foreign investment it requires to promote economic growth the to create jobs - it would run the risk of serious foreign disinvestment from key industries;
• The country would experience a serious balance of payments crisis;
• The value of the rand would decline significantly;
• Unemployment would increase;
• Race relations would deteriorate;
• The economy would go into recession;
• Government revenue would fall and service protests would increase; and
• Enormous strains would be put on the 1994 consensus on which our non-­‐racial constitutional democracy has been built.

However, I don't want to leave you with a sense of despondency.

For centuries visitors to our country have generally concluded that "it is a lovely place - but cannot possibly last for another five years." And yet we are still here. As 1994 proved, we South Africans have a wonderful ability to overcome even the most daunting challenges.

There is also a great deal on the positive side. Firstly, there is our Constitution. To the immense frustration of some ANC leaders, it did not devolve absolute power on parliament and on the executive. It provided them with all the powers they needed to rule - but required them to do so within the reasonable constraints established by the Constitution and the bill of rights. This means that

• power is dispersed throughout society;
• unconstitutional laws and conduct can be checked by an independent judiciary;
• ordinary citizens can promote their legitimate objectives through civil society organizations; and that
• they can appeal to Chapter 9 institutions to defend their rights.

Our second advantage is that South Africans who support the Constitution are now fully in step with the best elements in the international community. Any government action that deviates too significantly from international norms of democratic and economic governance will be severely punished by markets and international opinion.

Thirdly, no modern state can successfully govern against the will of substantial minorities. There is no way that government will be able to achieve important national goals if it alienates significant minorities and interest groups.

Fourthly, those who support pragmatic constitutional and economic approaches have an enormous advantage on what the ANC calls ‘the battlefield of ideas'.

Ideological approaches - like apartheid, the NDR and communism - simply do not work.

Finally, support for the Constitution is no longer a black/white thing. Black politicians, journalists, businessmen and religious leaders are in the vanguard of those who support the Constitution. They know that it is the best guarantee for the continuation of freedom, reconciliation and national unity - and they also know that it advocates transformation.

I am confident that we will achieve the high road provided we can work together as South Africans to achieve the vision in our Constitution: it is a vision of human dignity, equality and enjoyment of human rights and freedoms for all our people.

Issued by the FW de Klerk Foundation, October 31 2012

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