SPEECH BY DAVE STEWARD, EXECUTIVE DIRECTOR OF THE FW DE KLERK FOUNDATION, TO THE ASIS INTERNATIONAL CONFERENCE, CAPE TOWN, AUGUST 8 2012

POLITICAL AND IDEOLOGICAL THREATS TO YOUR COMPANY

Businesses cannot ignore the ideological and policy debates that are currently being conducted within the ruling alliance. The decisions that will be taken at the ANC's National Conference in Manguang in December will affect the future of the country - and of your companies - for years to come. They will, in the first place, determine who our national leaders will be for the next five years. They will also indicate the direction in which national policy will move during the critically important period that lies ahead.

What are the prospects?

Although the policy waters are murky, it would seem that there are three broad directions in which government policy might move.

The first is the analysis and vision presented by the National Planning Commission in its National Development Plan.

Although some of the National Planning Commission's analysis is open to debate, few reasonable South Africans would disagree with its overall vision - or with its identification of the challenges confronting South Africa.

The NPC presents a vision of a future South Africa that includes:

• Constitutional democracy;
• Unity in diversity;
• High quality education;
• Health and social services providing security to all those in need;
• Sustainable and equitable economic growth;
• Fair employment for all;
• An environment in which business can invest, profit and contribute to national goals;
• An effective state and public service;
• Mutual respect and human solidarity; and
• A South Africa that contributes to Africa and to the world.

Few reasonable South Africans would disagree with the NPC's diagnosis of the problems confronting South Africa. They include:

• High unemployment;
• Poor education - especially for black South Africans;
• Inadequate and antiquated infrastructure;
• Spatial planning that marginalises the poor;
• Unsustainable resource-intensive growth;
• An ailing public health system;
• Poor public service delivery;
• Corruption; and
• the fact that South Africa is still a divided society.

However, the two priority problems that the NPC identified were unsustainable levels of unemployment and our failure to provide decent education to a whole generation of children:

The failure of the Education Department to deliver schoolbooks to children in Limpopo Province is only one symptom of a much broader problem.

The education system is failing to achieve basic standards. In 2011, numeracy and literacy levels in Grades 3 and 6 were very low, with only 31% of Grade 3's having adequate literacy skills; only 17% had appropriate numeracy skills. Only 15% of learners in Grade 6 had adequate language skills and only 12% had achieved mathematics goals.

Of the 1 055 397 children who entered the school system in 2000 only 496 593 (47%) wrote matric in 2011. Of these, only 348 117 passed matric. However, they needed to pass only three subjects with more than 40% and another three with more than 30%.

The education crisis is not the result of a lack of resources. In 2011, South Africa's expenditure on education was 6% of GDP - which is high by international standards. In the 2012/13 financial year, education will account for almost R 207 billion - or per capita expenditure of more than R 16 000 per annum, for every learner and student in the country.

A reflection of all this is the fact that South Africa's education system is currently ranked 133rd out of 142 countries in the world by the World Economic Forum. Lack of suitably educated workers is becoming a serious constraint to economic growth and to the ability of companies to run their business.

Our second great failure - linked to our dismal educational performance - is our unsustainable level of unemployment.

Only 36% of black South Africans between the ages of 15 and 64 have jobs - compared with 64% of whites;

Almost 40% of black South Africans are unemployed. Unemployment is the main cause of the grinding poverty in which almost 40% of South Africans subsist. It is the reason why we have made no progress at all in combating inequality since 1994. It necessitates the payment of social grants to almost one third of our population and it is inextricably interlinked with unacceptable levels of crime. Most seriously, it means that our new constitutional democracy is not working for a substantial section of our society and for a majority of our youth.

According to the World Economic Forum's Global Competitiveness Report, South Africa's labour market is already regarded as one of the most rigid in the world. We were 132nd out of 139 countries in labour/employer relations; 131st in flexibility of wage determinations and 135th in hiring and firing practices. Last year we lost 14 million days as a result of strikes.

Government policies and statements have an enormous impact on investment and job creation. Primarily because of inappropriate government policies, South Africa's mining industry actually shrank by 1% per annum in dollar terms during the 2000-08 commodities boom, while the mining industries of China, Russia and Indonesia grew respectively by 19%, 10% and 8%.

The first policy direction that the ANC might choose is thus the NPC's National Development Plan.

The second approach that government might choose is the road of the ANC's National Democratic Revolution (NDR) which strongly influenced the policy discussion documents that the ANC issued in March this year.

According to Jeff Radebe, the ANC's Policy Chief,

"...having concluded our first transition with its focus in the main, on political democratization, we need a vision that must focus on the social and economic transformation of SA over the next 30 to 50 years..."

Radebe added that,

"our first transition embodied a framework and a national consensus that may have been appropriate for political emancipation, a political transition but has proven inadequate and inappropriate for our social and economic transformation phase.

The priorities during the proposed second transition would be:

"the resolution of the national question, the eradication of the legacy of colonialism and apartheid, and the liberation of the country from national and all other forms of discrimination."

In this new phase "the central task has shifted towards the eradication of the socio-economic legacy of apartheid colonialism, and will remain so for many years."

"...The de-racialistion of ownership and control of wealth, including land; equity and affirmative action in the provision of skills and access to positions of management..."

"...it requires the elimination of the legacy of apartheid super-exploitation and inequality, and the redistribution of wealth and income to benefit society as a whole, especially the poor." - Strategy & Tactics 2002

Although the ANC's Policy Conference at the end of June generally failed to provide clarity on the policy directions that will be decided at Mangaung, a few factors emerged from their deliberations:

Firstly, President Jacob Zuma appears to favour the accelerated and radical implementation of the National Democratic Revolution. According to Julius Malema, President Zuma has stolen all his ideas. "We raised the issue of white males controlling the economy, but we were called racist. (Now) he is repeating it," said a clearly peeved Malema.

Zuma's closing statement was filled with radical and uncompromising rhetoric, much of it aimed directly or indirectly at white males. It was peppered with harsh references to "apartheid colonialism" and the "structural legacy of colonialism of a special type."

According to Zuma, white males continue to dominate the economy; to control the wealth and to occupy most of the top jobs. The implication is that the triple crisis of unemployment, inequality and poverty has been caused by white males and the continuing impact of "apartheid colonialism". President Zuma warned that "unless we decisively deal with racialised and gendered inequality, poverty and unemployment, our collective democratic and constitutional achievements would be put at grave risk".

Secondly, there is a general perception that the balance of forces has shifted sufficiently - in South Africa and internationally - for the ANC to abandon compromises it made during the political transition. "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." Such caution is apparently no longer necessary and the ANC can proceed with the elimination of "apartheid property relations" - as called for in its Strategy and Tactics documents.

The Policy Conference supported

• increasing the role of government in the economy through the introduction of a "developmental state";
• greater state involvement in mining, falling short of outright nationalisation, but including the principle that "minerals belong to the people as a whole, and should be governed by the democratic developmental state" and that "the state should also capture an equitable share of mineral resource rents";
• accelerated land reform that "must represent a radical and rapid break from the past, without significantly disrupting agricultural production and food security" and that would abandon the principle of "willing buyer, willing seller"; and
• the idea that the government should be able to use the assets of insurance and pension funds for state developmental projects.

The Conference also decided to appoint a Presidential Commission to consider the future of the provinces. Some members want the number of provinces to be reduced to four or five. Others are worried about the vested interests of provincial politicians and public servants.

However, the Policy Conference rejected President Zuma's formulation of a "second transition" and preferred to call it a "second phase." Clearly, many senior ANC leaders are concerned about the new radical ideological line. They must wonder how it can be reconciled with the measured pragmatism of the National Development Plan. The altercation between the "transitionists" and the "phasists" was seen as a proxy leadership battle - which Zuma lost.

The third road that policy might take is the long-term vision of the SACP and COSATU for the establishment of a communist state.

The SACP was one of the driving forces behind President Zuma's proposed ‘Second Phase.' However, it does not see the NDR as the final destination of the revolutionary process. It views it as the beginning of a new phase when the SACP - as the self- proclaimed vanguard of the working class - will take over leadership of the revolution which will culminate in the establishment of a communist state.

At its 2006 Congress, the SACP's ally COSATU adopted a resolution in which it declared that the only appropriate route from the NDR to the establishment of a communist state would be the installation of a dictatorship of the proletariat.

In its 2007 "The Road to Socialism" the SACP quotes with approval the 1928 Communist

International instruction that,

"Our aim should be to transform the African National Congress into a fighting nationalist revolutionary organization"... "developing systematically the leadership of the workers and the Communist Party in this organization [we repeat: "developing systematically the leadership of the workers and the Communist Party in this organization"]" (The emphasis is the SACP's - not mine.)

The 12th Congress resolved that "the question of state power is the central question of any revolution" and that "the strategic Medium Term Vision (MTV) of the South African Communist Party is to secure working class hegemony in the State in its diversity and in all other sites of power".

The SACP does not believe that democratic elections are the most appropriate path to state power. It has noted, with disarming frankness, that "there is not a single example of a Communist Party, on its own, winning national elections within a capitalist society - let alone using such a breakthrough as the platform to advance a socialist transformation."

These, then, are the ideologies and politics that will dominate the ANC's National Conference in Mangaung:

• the broadly social democrat course of the National Planning Commission;
• the more radical Africanist course of the National Democratic Revolution; and
• the vision of the SACP and COSATU to take the country beyond the goals of the NDR to a full-blown communist state.

The 4 000 delegates who will gather in Mangaung will take the formal decisions about which way South Africa will go.

However, in doing so they will be constrained by the following factors: The first is our Constitution.

The Constitution 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; that unconstitutional laws and conduct can be checked by an independent judiciary; that ordinary citizens can promote their legitimate

objectives through civil society organisations and that they can appeal to Chapter 9 institutions to defend their rights.

The second constraint is that whoever governs South Africa will not be able to ignore 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. The United States would not be able to ignore the reasonable interests of any of its minorities. Neither can South Africa.

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 (particularly) communism - simply do not work. They inevitably end in economic distortion or collapse - and always result in unacceptable human repression and suffering.

Fifthly, 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. The principles of democratic governance, openness, accountability, responsiveness and the supremacy of the rule of law are not alien ‘Western' constructs: they are the fundamental requirements for successful societies everywhere - in Europe, in the Americas, in Asia and in Africa.

Finally, our Constitution and broadly pragmatic macro-economic approach have served us well during the past 18 years:

• We have resumed our place in the international community;
• 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;
• We have also made remarkable social progress in many areas:
  • 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 3 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 has access to electricity and sanitation compared with only half in 1994;
• The 2010 Soccer World Cup showed what heights we South Africans can attain when we work together.

For all these reasons I remain reasonably confident about the future.

Source: FW de Klerk Foundation

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