Reply by Inkatha Freedom Party leader, Prince Mangosuthu Buthelezi MP, to Jacob Zuma's state of the nation address, parliament June 4 2009

Mr Speaker,

The people have spoken through the results of the last elections. There has been electoral fraud, especially in KwaZulu-Natal. But in spite of its extensive nature one cannot detract from the fact that the people have spoken and the President has received a powerful mandate to govern.

I am therefore not rising to oppose the President or his Government, but to offer my counsel and admonition. I do not do so because I feel I am wiser than anyone else in this House.

It is true that I may be the only one in this House who has interacted with the Heads of Government of South Africa from Prime Minister Hendrick Frensch Verwoerd to Prime Minister Johannes Gerhardus Strijdom to Prime Minister Balthazar Johannes Vorster to President Pieter Wilhelm Botha to President Frederick Willem de Klerk to President Mandela, President Mbeki and President Motlanthe, all of whom I have seen rise to power and relinquish office.

I have also known and personally interacted with great leaders in the African National Congress, from its founder Dr Pixely Ka Isaka Seme who was my uncle. From my childhood I knew the first President of the ANC the Reverend John Langalibalele Dube. I knew Dr Alfred Batini Xuma and had the privilege of having dinner in his home in Toby Street in Sophiatown with his wife Madie Hall Xuma.

I knew President James Moroka and one of my mentors was President Inkosi Albert Mvumbi Luthuli. I knew and worked with Mr Oliver Tambo until 1979. I have known President Nelson Rolihlahla Mandela for over sixty years and I had the privilege of being one of his Ministers. I have known President Thabo Mvuyelwa Mbeki and was one his Ministers for five years. I have known President JG Zuma for a few decades and we worked together in President Mbeki's Cabinet.

But I do not speak from the strength of this experience. Today, I am speaking with the confidence of a new found sense of freedom. Throughout my life, history compelled me to balance conflicting interests in my contribution to public life.

Before liberation, I was at the centre of political activities which were not banned by the apartheid regime. This role limited what I could do. After liberation, I subscribed to our joint endeavours to consolidate the gains of our struggle. I accepted that in the initial stages of our post-liberation Republic, not all things would go well.

I am now free from all constraints and empowered by a freedom of thought and speech I never enjoyed before. I now enjoy the freedom to speak truth to power. I do not intend to oppose or undermine the popular mandate President Zuma has received from the electorate, but to provide assistance in the form of counselling and admonition, so that our Republic through his leadership may succeed in fulfilling the aspirations embodied in that mandate.

I commend the President for his positive overture to the Opposition yesterday to be leading players in shaping the destiny of our nation. As patriots, we in the Opposition must work together with the ruling Party for the sake of our people in the present circumstances of a global economic meltdown. I also commend the President for emphatically stating that our institutions and Constitution must be respected.

But in speaking truth to power, there are many aspects of the presidential debate which need to be addressed. Time dictates that I focus on the single, most critical aspect. Nothing is of graver important than addressing the economic crisis facing South Africa.

When I spoke in response to President Motlanthe's State of the Nation address this year, I warned that South Africa would not be spared from the global depression and that we were ill-prepared to deal with it. Despite my warnings, Government officials and politicians boldly declared that South Africa would only be marginally affected by the global depression. The worst, they said, was already over and recovery was in sight. This was irresponsible nonsense. We lost precious time to formulate our response to the crisis.

Against this backdrop, South Africa has awakened to the harsh reality that, in the first quarter, 22% of its manufacturing capacity has been shut down, mining has been reduced by 33% and the GDP is down by at least 6,7%. This is just the beginning. In all likelihood, the recession will gather pace in the next quarter. And the collapse of the real estate market, which has been held back by the expectation of a quick recovery, now seems inescapable.

The economy is our first priority. The recession will undermine Government's efforts, from the upliftment of the poor to fighting crime. Mr President: the laudatory pledges you announced yesterday would be difficult to fulfil in times of prosperity, let alone times of severe austerity.

The recession cannot be addressed by a bureaucratic, administrative or legislative response. We are not going to fix the economy by establishing new Departments of State, appointing new Ministers or holding policy summits.  The delay in taking action has restricted what we can do. We must now liken the global depression to a world war. We must transform our thinking and build a new financial architecture. Only the countries that adjust their economies will survive the global economic depression.

The impact of the global depression is going to be greater than World War II. We dare not be on the losing side, lest South Africa is reduced, once again, to a mere global supplier of commodities and raw materials. For years our country has tried to develop an industrial basis. We must now protect it, as our future depends on it.

Already we are experiencing casualties. Hundreds of thousands of people have lost their jobs, and more will. As winter sets in we will see wide-spread hunger and despair. Under such pressures, our healthcare system is likely to disintegrate, alongside our already failing education system. This is not the time, to quote my friend Baroness Margaret Thatcher, to "go wobbly". The hour demands courage and determination.

Mr President; if we are serious about protecting jobs in our shrinking industrial basis and attracting Foreign Direct Investment, we must devalue the Rand immediately. We cannot wait for months, weeks or even days. The US Federal Reserve gave the example by cutting the prime rate to zero within hours of the US market hitting the bottom.

Having a strong Rand is nothing but ill-conceived national pride. Our economy is not reliant on imports and we produce enough to ensure that the devaluation of the Rand will not necessarily affect the goods and services consumed by the low and middle classes.

We must devalue the Rand, and then stablise the devalued Rand. No business can cope in an environment of two-digit currency fluctuation. Government must aggressively use whatever means available to keep the devalued Rand stable.

Undoubtedly, devaluing the Rand will increase the inflation rate over time. But economists and policymakers have informed me that, for a country like South Africa, it is better to deal with a little more inflation than with wide-spread joblessness and long-lasting depression.

We must act now. We must save our real estate market before it collapses and force the South African Reserve Bank to cut its interest rate to single digits and as close as possible to zero. This by itself will cause the devaluation of the Rand, as the currency will no longer be attractive to currency investors and speculators.

This compels us to re-evaluate our relationship with the South African Reserve Bank, which still remains a private entity owned by private shareholders, and controlled primarily by such shareholders which the law requires to be kept secret. One can only assume that this money trust of bankers acts in the public interests because they are so tied to our economy that, if the economy suffers, they suffer too.

But we live in extraordinary times. The American people have begun to question the old maxim that what ‘is good for General Motors is good for America'. It might equally be the case that what is good for the South African bankers may not be good for the South African people and economy. The South African Reserve Bank should become what the Constitution envisages it to be; an organ of State, part of the Government of our country.

This process will take time, even if conducted through nationalisation. But the urgent need to cut interest rates to a minimum cannot wait if we want to avoid the compounded domino effect of wide-spread repossessions and the domestic devaluation of the South Africa real estate asset base.

I know that it is difficult to focus politicians on delicate economic issues, which are often subcontracted to academics, think tanks and bankers. As politicians, we often rely on our gut instinct to know what is right or wrong and what needs to be done; and we are often right.

But when it comes to economic issues, we have long been trained not to do so. I plead with the President to be responsive to the mandate he received from the people and make sure that we maintain employment levels, jobs and industrial capacity.

I respect the role in which history has cast the President. I hope that he will respect the role history has finally cast me. I receive my mandate from the poorest of the poor, who stand to suffer the most. The economic crisis could jeopardise everything we have fought for. I plead with the President to focus on it, not only with his mind, but with his heart, and I pledge to him my full and truthful support.

Finally, let us be honest about the widespread electoral irregularities in the recent elections. We saw acts unbefitting our democracy, such as the IFP Secretary-General Reverend Musa Zondi being searched and humiliated by the National Intervention Unit in Nongoma. Election irregularities are not new to us, but they must become unacceptable.

When the former Secretary-General of the OAU, His Excellency Dr Salim Ahmed Salim, who is now one of the "wise men of Africa", visited South Africa ahead of our elections, I met with him in Durban. He was to lead the African Union Monitoring Team during the election.

I gave him a copy of the Aide Memoire which I provided to the Chairperson of the IEC, Dr Brigalia Bam, and the members of the Commission when they met with me and members of the National Council of my Party on 31 March 2008. In it I had listed all the irregularities that have taken place during our elections from 1994 to 2004. Dr Bam and the IEC had promised to come back to us. But a year had already passed and they had not done so.

I asked Dr Salim whether, for us in Africa, different standards are used in declaring an election "free and fair". I recalled that in a previous election in Zimbabwe most political parties in South Africa sent monitors. All of them, except the IFP monitoring team, the Chairperson of the IEC, and the European Monitoring Team, declared that Zimbabwean election "free and fair".

Dr Salim chuckled and said he preferred the word "credible" rather than "free and fair". This reminded me of the wisdom of one of our African sayings: "Motsoalle oa moloi ke moloi, motsoalle oa lesholu ke leshulu".

The mandate our President has received places great responsibility on his shoulders. We wish him well.

Issued by the Inkatha Freedom Party, June 4 2009

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