ANC Today

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Volume 4, No. 47, 26 November-2 December 2004

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THIS WEEK:

* Letter from the President: A luta continua!
* Approaches to Poverty Eradication and Economic Development VII: Transform the
Second Economy
* 16 Days of Activism: Men have a leading role in changing attitudes
* Zimbabwe debate: Common liberals avoid the roots of the problem
* US policy toward Zimbabwe: Correcting the record

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LETTER FROM THE PRESIDENT

Aluta continua!

Recently Archbishop Desmond Tutu delivered this year's Nelson Mandela Lecture.
Among other things, he called for rational discussion of the challenges our
country faces, involving as many of our people as possible. I fully agree with
this appeal and hope that many of us will participate in this multi-issue
discussion.

Specifically the Archbishop said: "We should not impugn the motives of others
but accept the bona fides of all. If we believe in something, then surely we
will be ready to defend it rationally, hoping to persuade those opposed to
change their point of view?

"We should not too quickly want to pull rank and to demand an uncritical,
sycophantic, obsequious conformity. We need to find ways in which we engage the
hoi polloi, the so-called masses, the people, in public discourse through
indabas, town-hall forums, so that no one feels marginalised and that their
point of view matters, it counts.

"Then we will develop a national consensus. We should debate more openly - not
using emotive language.We should not be browbeaten by pontificating decrees from
on high.It should be possible to talk as adults about these issues without
engaging in slanging matches."

Again, we agree fully with the Archbishop with regard to the approach that
should be taken as we all engage in rational discussion. We also agree that all
the matters he mentions should be debated openly.

As he says, these issues include "affirmative action, transformation in sport,
racism, xenophobia, security, crime, violence against women and children."

He also said, "What do we want our government to do in Zimbabwe?...What is black
empowerment when it seems to benefit not the vast majority, but a small elite
that tends to be recycled?...We should discuss as a nation whether a basic
income grant is not really a viable way forward."

One of the fundamental requirements for the rational discussion suggested by the
Archbishop is familiarity with the facts relevant to any matter under
discussion, as well as respect for the truth. In this Letter we will mention
some of the facts relevant to some of the issues mentioned by the Archbishop as
possible subjects for discussion.

The first of these concerns the engagement of the masses in discussion.

From the very beginning of the democratic order, we insisted on the need for
transparent and accountable government. We have therefore worked consistently to
encourage and enable two-way communication between the government and the
people.

As a first condition for the achievement of this objective, we have sought to
ensure that the government communicates to the people as much information as
possible. Some years ago we even thought that the public broadcaster should
allow the government some broadcasting time on a weekly basis, to convey this
information. Unfortunately this idea was shot down on the basis, which we could
not understand, that this would compromise the independence of the public
broadcaster.

Since then, we have resorted to other means to reach out to the people. These
include Public Information Terminals at our Post Offices and Multipurpose
Community Centres, public hearings in our legislatures, publication of draft
legislation for public discussion before adoption by the Cabinet, izimbizo, and
the Presidential Working Groups. Indeed even this publication, ANC TODAY, was
started precisely because we wanted to ensure that our people have access to the
views of the ruling party, directly from us, the public spokespersons of the
ruling party.

Those interested to see how the government in all spheres interacts with those
the Archbishop described as "the so-called masses", they should attend the Ward
Committee meetings at local government level, and the izimbizo held regularly
throughout our country by the provincial and national governments, the Deputy
President and the President.

In all these encounters the people interact freely with the government, with no
restriction whatsoever about issues they may raise. Media reports of these
encounters would also reflect this reality and therefore the engagement of the
masses of our people in the process of determining their destiny.

At no point during these interactions with the people has it ever been that
either the people or the media observers communicated any message that anybody
had "pulled rank" or "demanded an uncritical, sycophantic, obsequious
conformity."

Currently there are at least seven Presidential Working Groups, which bring
together the national government, led by the President, and a cross section of
sectoral representatives. The sectors covered are Women, Youth, Trade Unions,
Higher Education Vice Chancellors, Business, Commercial Agriculture and the
Religious Communities.

The agendas for the meetings of these Groups are decided by agreement, and are
not imposed by the government. The sectoral representatives are therefore free
to place any matter on the agenda, which they have done without this causing any
tension or conflict.

I mention these details to make the point that none of the leaders of our people
with whom we interact in the Presidential Working Groups has ever said that
anybody has "pulled rank" and "demanded an uncritical, sycophantic, obsequious
conformity", or that they have been "browbeaten by pontificating decrees from on
high." But, of course, others, such as the Archbishop, may have information to
the contrary.

Evidently the Archbishop thinks there is something wrong with ANC members
agreeing with ANC policies they have decided within the various forums of the
organisation, including our National Conference. Thus respect for positions
democratically agreed within the organisation are described as "unthinking,
uncritical, kowtowing and party line-toeing". He contemptuously dismisses the
members of our movement as "voting cattle of the party".

The Archbishop has never been a member of the ANC, and would have very little
knowledge of what happens even in an ANC branch. How he comes to the conclusion
that there is "lack of debate" in the ANC is most puzzling. Rational discussion
about how the ANC decides its policies requires some familiarity with the
internal procedures of the ANC, rather than gratuitous insults about our
members, based on a refusal to "accept the bona fides of all" for which he
appealed.

With regard to the Archbishop's caution against "pulling rank" and "browbeating
by pontificating decrees from on high", this matter has been raised by others
before, perhaps using different words. These others have criticised some of our
interventions in the public discourse, essentially to insist that we should not
engage the national debate on any matter. To secure our silence, the argument
has been advanced that we intervene in such debates to silence dissenting
voices.

I have made this clear in the past that I, for one, will join the public debate
on any matter, exercising the same right that any other South African has, to
speak out on matters of concern to the nation. In this regard, I support the
call once made in China - let a hundred flowers bloom: let a hundred schools of
thought contend!

Quite correctly, the Archbishop argued against "black empowerment when it seems
to benefit not the vast majority, but a small elite that tends to be recycled."
This is the second of his concerns we want to address.

There are some in our country who regularly communicate the entirely false
message that black economic empowerment (BEE) benefits almost exclusively a
small elite composed of members of the ANC. The recent conclusion of an
agreement between a private South African consortium and private foreign owners
of Telkom shares seems to have provided an opportunity once more to spread this
falsehood.

In this regard I must confirm, with no apology, that our movement and government
are firmly committed to the pursuit of black economic empowerment. We will
continue to promote the goal of the deracialisation of our economy as vigorously
as possible. In this context, we will continue to pursue the goal of increasing
the wealth and income in the hands of the black people of our country, as an
inherent part of the continuing struggle to eradicate the legacy of colonialism
and apartheid.

Black economic empowerment in our country has taken place and will take place
through two separate processes - one private, and the other through public
interventions. Any discussion of BEE must take this into account.

The "black business elite" that has been a focus of negative comment has made
its progress through its own private initiative. None among its ranks has been
funded or promoted by the government, enabling them to access such deals as they
may have secured.

Regardless of anything that might be said by anybody, no "blame" of any kind
attaches to the government for the successes that members of this "black
business elite" might have achieved.

The last ANC Policy Conference held in 2002 discussed BEE. Its decisions were
presented to our Stellenbosch National Conference held at the end of the same
year. The National and Policy Conferences confirmed our approach in favour of
broad-based black economic empowerment. Accordingly, our parliament has approved
legislation in favour of such broad-based BEE, consistent with the approach of
our movement and government in this regard.

In a speech earlier this year, our Secretary General, Kgalema Motlanthe said:
"Another problem in the BEE process has been its narrow base, especially in
respect of the transfer of ownership of assets to individual beneficiaries. In
this respect, it seems that certain individuals are not satisfied with a single
bout of empowerment. Instead they are the beneficiaries of repeated bouts of re-
empowerment. We see the same names mentioned over and over again in one deal
after another."

In this regard, the Secretary General was addressing the issue of the transfer
of ownership of assets that we have seen in various private deals. He made the
point, correctly, that black entrepreneurs should respond to the requirement to
achieve broad-based empowerment, and should therefore not use their capabilities
to focus exclusively on their own advancement, without bringing in others to
participate in the acquisition of wealth through the transfer of ownership of
assets.

In the same speech, discussing BEE, the Secretary General said, "All the
government programmes to transform our society should provide the basic starting
point for accumulation of capital by black people." This, indeed, is the focus
of the government's BEE programmes.

But perhaps before we say something about these government programmes, we should
reflect briefly on the recent Thintana (Telkom) agreement, whose nature some
have dishonestly and deliberately sought to present in a negative light.

Contrary to everything that has been said about this agreement, some of the
beneficiaries are the women members of the South African Democratic Teachers
Union (SADTU), the nurses union, DENOSA, the women's advocacy group, POWA, and
the YWCA. Other owners include the 18,000 women who founded WIPHOLD.

A third of the shares were deliberately reserved for other mass based groups.
The successful consortium is currently discussing which groups to approach to
take up these shares.

We have no doubt that this private transfer of assets will respond to the appeal
of our Secretary General that even in this case, the black private business
community should respond to the need to achieve the objective of broad based
black economic empowerment.

In terms of the approach of both our movement and government, BEE includes such
matters as ownership of wealth, participation in management, skills training and
the occupation of responsible positions, and increasing the availability of
opportunities to all black people to achieve the advancement denied by
colonialism and apartheid.

It is clear that there are some in our country who do not want the truth to be
known about what our government and the public sector as a whole are doing to
implement broad based BEE. Let us now give some examples in this regard.

In the period 1998 to the end of 2004, the state electricity company, Eskom,
will have spent R26.6 billion on BEE. This expenditure includes the three areas
of procurement, community development and rural development. This BEE programme
has included all the elements of our government's broad based black economic
empowerment that we have mentioned.

In this regard, Eskom has given support to many black entrepreneurs outside the
well known "black elite", which, in any case, is not part of Eskom's BEE
programme. Eskom has also vigorously taken up the challenge to increase the
number of highly skilled black people especially in mathematics and engineering.

Since April 1997, Telkom has spent nearly R24 billion on BEE. During the 2004
financial year, the company procured 57.8% of its supplies from BEE suppliers,
none of them being necessarily part of the "black elite". The equivalent figure
for Vodacom is 60%, amounting to R1.3 billion.

When Telkom was listed, over 100,000 individuals bought shares, the overwhelming
majority being black. The company's Enterprise Development Programme has trained
905 small companies in business management, many of them black, to enable them
to do business with Telkom.

Transnet set itself the objective to spend at least 50% of its discretionary
funds on BEE by 2005. This objective was achieved during the 2003 financial
year. As an example, during 2003, Transnet announced that it would secure 60% of
its fuel from BEE enterprises. The contract was worth R2.4 billion.

As at the end of September 2004, Isibaya Fund Investments, fully funded by the
Public Investment Commissioners, had subscribed about R180 million to funds
established to finance small black business groups. Altogether Isibaya has R6
billion invested in ventures related to BEE. These are not necessarily linked to
the so-called "black elite".

The preceding account excludes funding and other BEE support given by government
departments and other entities such as the DTI, Agriculture and Land Affairs,
Environment and Tourism, Social Development, Provincial and Local Government,
the IDC, the Land Bank, Umsobomvu Fund, and others.

During the coming year, the Apex Fund will begin to extend micro loans to
support small and family businesses. This will signify the completion of the
spectrum of the public funding profile of BEE, covering businesses of all sizes,
from the smallest to the biggest, achieving the goal of broad based empowerment.
Factually, the assertion that all that BEE amounts to is benefiting a "small
elite that tends to be recycled" is entirely false.

Arguing for a discussion on the proposal for a basic income grant, the
Archbishop says, correctly, "We cannot, glibly, on full stomachs, speak about
handouts to those who often go to bed hungry." This is the third of the
Archbishop's concerns we would like to address.

Earlier this year, on November 18, Minister of Finance Trevor Manuel addressed
the matter of our social expenditure in a manner far removed from what can be
described as being glib. He said:

"We are currently stepping up our expenditure on social security, partly to meet
continued growth in numbers of child support, disability grant and foster care
grant beneficiaries. These social assistance programmes, amounting to some 4,5
per cent of GDP - represent one of the largest non-contributory income
redistribution programmes amongst developed or developing countries."

Put simply, this means that, compared to even developed and therefore richer
countries, our national budget and economy are reaching the limit of what we can
spend on social security. Whatever anyone of us with a full stomach may think
about the basic income grant, we must answer the practical question where the
additional funds would be found to finance a basic income grant.

We have, in the past, asked those who campaign for this grant to answer this
question rationally, "without engaging in slanging matches", and without
"impugning the motives of others, but accepting the bona fides of all", avoiding
the accusation of cynicism with regard to others with whom they disagree.

In this regard I must say that the populist argument that we should have chosen
butter before weapons is nothing more than a populist argument. We have a
constitutional obligation properly to equip the National Defence Force.

Decisions taken in this regard followed an extensive process of consultation
with civil society, including our religious communities, as we conducted the
seminal Defence Review. In any case, funds immediately available to fund the
defence acquisition would not necessarily be available to finance social
expenditure.

As in all other instances, it would be good that those who present themselves as
the greatest defenders of the poor should also demonstrate decent respect for
the truth, rather than indecent resort to empty rhetoric.

The assertion that our movement and government intervene in the public discourse
to suppress open and free debate is false. Nobody can produce one shred of
evidence to disprove this statement.

Our government is pursuing a broad based BEE programme focused on benefiting
"the vast majority" of our people. Nobody can produce one shred of evidence to
contest this statement.

In his Nelson Mandela Lecture, Archbishop Tutu said all of us need to engage one
another in rational discussion, "hoping to persuade those opposed to change
their point of view". He said that through such discussion, we should "develop a
national consensus".

The Archbishop proposed what our nation needs to do to determine its agenda. But
as we have said in this Letter, to succeed in this task, all of us must educate
ourselves about the reality of South Africa today, internalise the facts about
our country, and respect the truth.

Together we must avoid the resort to populism and catchy newspaper headlines
that have nothing to do with the truth and everything to do with the pursuit of
self-serving agendas. Rational discussion also demands that we should take the
effort to think, rather than submit to the dictates of a reassuring herd
instinct.

Whatever the intensity and sincerity of a shared desire to produce national
consensus, all of us will have to understand that the rational debate correctly
demanded by Archbishop Tutu is about setting the national agenda.

Like everything else in our country, the setting of that agenda means struggle.
Because we originate from different political and ideological backgrounds, and
diametrically opposed social experiences, it will not be easy to arrive at the
national consensus that the Archbishop desires.

The effort to reach such consensus only means that the struggle continues to
define what our country will look like tomorrow and the day after. Time will
tell whether this struggle can be engaged without resort to slanging matches.

It is however clear that, whatever its form and its gentility, politeness or
otherwise, this is a struggle about who shall set our national agenda and what
that agenda shall be. In this regard, inevitably, the struggle continues - Aluta
continua!

Thabo Mbeki

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APPROACHES TO POVERTY ERADICATION AND ECONOMIC DEVELOPMENT VII

Transform the Second Economy

In 2003, to prepare for our First Decade of Democracy in 2004, our government
published the major study, 'Towards a Ten Year Review'. Among other things, the
Review said: "One of the major consequences of the change in the structure of
the (South African) economy is that 'two economies' persist in one country. The
first is an advanced, sophisticated economy, based on skilled labour, which is
becoming more globally competitive. The second is a mainly informal,
marginalised, unskilled economy, populated by the unemployed and those
unemployable in the formal sector. Despite the impressive gains made in the
first economy, the benefits of growth have yet to reach the second economy, and
with the enormity of the challenges arising from the social transition, the
second economy risks falling further behind, if there is no decisive government
intervention."

In his well known book, 'Development as Freedom', the Nobel Prize winner in
economics, Amartya Sen says: "Development requires the removal of major sources
of unfreedom: poverty as well as tyranny, poor economic opportunities as well as
systematic social deprivation, neglect of public facilities as well as
intolerance or overactivity of repressive states. Despite unprecedented increase
in overall opulence, the contemporary world denies elementary freedoms to vast
numbers - perhaps even the majority - of people. Sometimes the lack of
substantive freedoms relates directly to economic poverty, which robs people of
the freedom to satisfy hunger, or to achieve sufficient nutrition, or to obtain
remedies for treatable illnesses, or the opportunity to be adequately clothed or
sheltered, or to enjoy clean water or sanitary facilities. In other cases, the
unfreedom links closely to the lack of public facilities and social care, such
as the absence of epidemiological programmes, or of organised arrangements for
health care or educational facilities, or of effective institutions for the
maintenance of local peace and order. In still other cases, the violation of
freedom results directly from a denial of political and civil liberties by
authoritarian regimes and from imposed restrictions on the freedom to
participate in the social, political and economic life of the community."

He contrasts what he calls "growth mediated" with "support-led" development,
expressing preference for the latter. He writes: "In contrast with the growth-
mediated mechanism, the support-led process does not operate through fast
economic growth, but works through a programme of skilful social support of
health care, education and other relevant social arrangements."

In this context he argues that "Despite their very low levels of income, the
people of Kerala (in India), or China, or Sri Lanka enjoy enormously higher
levels of life expectancy than do much richer populations of Brazil, South
Africa and Namibia, not to mention Gabon (with wealth measured by GNP per
capita).An income-centred (GNP) view is in serious need of supplementation, in
order to have a fuller understanding of the process of development."

Everything Sen says indicates the challenge we face as we work to transform the
Second Economy. Fortunately we no longer have the burden of the "unfreedom"
imposed by tyranny and the denial of political and civil liberties by an
authoritarian regime. Nevertheless the Second Economy in our country is
characterised by many of the "unfreedoms" that Sen wrote about.

Contrary to what was stated in the 'Ten Year Review' the challenge we face
extends beyond "(economic) growth" and relates to the complex of "unfreedoms"
mentioned by Sen. The very fact of the existence of the Second Economy side by
side with the First argues against a simple focus on growth.

In his article "Paradoxical Growth" in the book, 'The Post-Development Reader',
Serge Latouche, Professor of Economics at the University of Paris XI, wrote: "In
a World Bank report of 1991, we read: 'During its first two decades of
existence, the World Bank tended to identify development with economic growth.
The benefits of growth were assumed to trickle down, the poor automatically
benefiting from the creation of jobs and the increase in goods and services.'"

The famous trickle-down effect

He continues: "The claim of economic growth to be the basic objective of human
society is therefore mainly based on the famous trickle-down effect, magnified
by the euphoria of the myths of modernity. However, this seductive formulation
cannot stand up to a serious examination. So many paradoxes beset the reasoning
that the miracle effect, in fact, turns out to be the mirage effect.What
invalidates the whole ideology of growth is the fact that the trickle-down
effect is an imposture.At the planetary level, the mechanism never functioned
anyway. Between 1950 and 1987, according to the World Bank's own statistics,
while the world's revenues multiplied by 2.5, the gap between the richest and
the poorest fifths of the population grew from 30:1 to 60:1." ('The Post-
Development Reader', compiled by Majid Ranhema & Victoria Bawtree: David Philip,
Cape Town, 1997).

The First and Second Economies in our country are separated from each other by a
structural fault. The Second Economy emerged during the long period of
colonialism and apartheid as a result of the deliberate imposition of the
"unfreedoms" described by Sen. This process aimed to achieve the enrichment of
the white minority at the cost of the impoverishment of the black majority.

That process of impoverishment included ensuring that the white economy had
access to unlimited supplies of cheap unskilled black labour, and that this
economy did not waste any money on the development of the localities in which
the black workers lived. This did not even allow for the possibility of
improving the lives of the oppressed majority through the "trickle-down effect".

Accordingly, what we now have is the reality described in the 'Ten Year Review',
of a "mainly informal, marginalised, unskilled economy, populated by the
unemployed and those unemployable in the formal sector".

The Second Economy is caught in a "poverty trap". It is therefore unable to
generate the internal savings that would enable it to achieve the high rates of
investment it needs. Accordingly, on its own, it is unable to attain rates of
growth that would ultimately end its condition of underdevelopment.

It does not have the internal means to effect the "support-led" development
Amartya Sen spoke about, resulting in targeted improvements in the health,
education, training and social development of those imprisoned within the Second
Economy, despite its low level of economic development as measured by per capita
GDP.

It is linked to the First Economy by the extent to which it can still supply the
cheap, unskilled labour this economy may require. It survives on money transfers
sent by family members who have been able to secure regular or occasional
employment within the First Economy, as well as social grants and elements of
the social wage provided by the democratic state.

It is also linked to the First Economy by the goods, equipment and services it
purchases with the meagre resources at its disposal. Those resources also make
it possible for the Second Economy to maintain an informal economic sector of
small traders, artisans and service providers.

Such positive trickle-down effects as would result from the higher earnings of
family members who would benefit from higher incomes in the First Economy, as
well as individual and social transfers by the state, would not be sufficient
significantly to raise the standard of living in the Second Economy, or close
the ever-widening wealth and development gap between the two economies.

The market economy, which encompasses both the First and the Second economies,
is unable to solve the problem of poverty and underdevelopment that
characterises the Second Economy. Neither can welfare grants and increases in
the social wage. The level of underdevelopment of the Second Economy also makes
it structurally inevitable that the bulk of such resources as flow into the
Second Economy will inevitably "leak" back into the First Economy.

Such public and private interventions as may be made producing a positive
outcome in the First Economy cannot have any strategic impact on the Second
Economy because it constitutes the structural periphery of the former,
inherently positioned to remain on the periphery. Its internal objective reality
in terms of the forces of production and their interaction makes it impossible
for it to respond to the impulses that drive the growth and development of the
First Economy.

All this makes decisive government intervention imperative, as the 'Ten Year
Review' said, which would "set the preconditions for market-led economic
growth". Fortunately, in this regard, we have the possibility to draw on the
positive examples and lessons of the Marshall Plan, the post-war development of
the Asian Far East, and the EU Regional Policy. We can also learn from the
negative examples of the ACP-EU Lome and Cotonou Agreements and the
implementation of the policies of the "Washington Consensus".

Reliance on domestic resources

One of the lessons from these experiences is that we should, to the greater
extent, finance the transformation of the Second Economy relying on domestic
resources. These should be made available through the state in the form of
grants. This does not rule out accessing commercial loans by the state, or
equity participation funds, to finance economically viable projects that have
the possibility to generate profits that would be used to finance debt.

Necessarily, therefore, decisive government intervention in the Second Economy
requires that the government should have the resources to make this
intervention.

The successful management of the macro-economy, coupled with policies that have
resulted in the growth of the First Economy, have enabled the government to
generate these resources. These results must therefore rank among our most
important achievements during the First Decade of Freedom, precisely because
they create the possibility for our country seriously to confront the challenge
of the Second Economy.

The 2004 Budget Review of our National Treasury makes a number of important
observations in this regard. It says:

"Greater impetus to economic restructuring began in 1996, with a macroeconomic
strategy (GEAR) that emphasised improved industrial competitiveness, inflation
reduction, gradual relaxation of exchange controls, strengthened funding of
training, tax incentives to stimulate investment, deficit reduction and budget
reform focused on the redistributive thrust of expenditure. Having laid these
secure foundations, a more expansionary fiscal policy stance could be adopted in
2001.

"Against the background of the fiscal consolidation achieved over the past
decade - expenditure reprioritisation, a lower budget deficit, improved
management of the public debt, lower interest rates and a buoyant tax structure
- the 2004 Budget aims to invigorate the recovery evident in the last quarter of
2003 while continuing to build firm foundations for long-run growth and
development.

"Prudent fiscal management has resulted in public debt levels falling within
manageable limits, lowering debt service costs and freeing resources for more
important socio-economic programmes, including infrastructure development, job
creation and social security. Enhanced management and governance, together with
improving delivery capacity, ensure that this expenditure contributes
meaningfully to economic growth and development."

In the context of the success of the post-1996 macro-economic policies resulting
in "freeing resources for more important socio-economic programmes", various
policies and programmes have already been decided. The Integrated and
Sustainable Rural Development and Urban Renewal Programmes are central to the
success of our response to the Second Economy. They must focus on addressing the
"unfreedoms" mentioned by Sen, and not just the goal of economic growth.

Similarly, we also have to ensure the success of our Expanded Public Works, the
Human Resource Strategy, and Comprehensive Agricultural Support Programmes, all
of which relate directly to the transformation of the Second Economy.

Other interventions in other areas, ranging from the Municipal Infrastructure
Grant to the development of e-government through the use of modern information
and communication technologies, must, in part, be geared towards ensuring the
success of the major programmes we have mentioned, specifically directed at the
transformation of the Second Economy.

With regard to all these interventions in both the First and Second economies,
on 26 October this year, Minister of Finance Trevor Manuel said:

"Our policy agenda focuses on both growing the formal economy and expanding the
economic opportunities of those who are marginalised, those who, without direct
policy interventions, will not benefit from the fruits of a growing economy.
Reducing this social exclusion through drawing in the millions who find
themselves trapped in the second economy is a fundamental principle of our
policy stance. To achieve this objective, we will have to intervene directly in
the way in which the fruits of economic growth are shared, in the way in which
economic opportunities are parcelled out.

"South Africa's development challenge is to build a single and integrated
economy that benefits all, encompassing both growing, competitive relations with
the global economy and a caring, inclusive network of social services and
support for the disadvantaged. This is, on a larger scale, the central challenge
also of international relations - the struggle for modernisation and solidarity
against deeply embedded inequalities, conflict and prejudice."

As with the European Union (EU) Regional Policy, we must aim to achieve:

* productive investment to create and safeguard sustainable jobs;

* investment in infrastructure which contributes to development, structural
adjustment and creation and maintenance of sustainable jobs, or, in all eligible
regions, to diversification, revitalisation, improved access and regeneration of
economic sites and industrial areas suffering from decline, depressed urban
areas, and rural areas;

* development of the endogenous potential by measures which support local
development and employment initiatives and the activities of small and medium-
sized enterprises; such assistance should be aimed at services for enterprises
and cooperatives, transfer of technology, development of financing institutions,
direct aid to investment, provision of local infrastructure, and aid for
structures providing neighbourhood services;

* Investment in education and training and health.

We must also take note of the observation made by the EU that "the dynamic
effects of EU membership, coupled with a vigorous and targeted regional policy,
can bring results".

Success in the First Economy

We must fully understand that the success of our own vigorous and targeted
interventions in the Second Economy is also dependent on the success of the
First Economy and building the structural links between these two economies. In
the end, as was the objective of the Marshall Plan, those currently caught
within the Second Economy should ultimately be able to grow and develop without
the need for exceptional outside interventions.

This means that even as we pay concentrated attention to the Second Economy, we
must not reduce our focus on the growth and development of the First Economy.

Even as we do so, given the continuing imperative for our economy to create
jobs, we should pay attention to an empirical observation made by the German
Bundesbank. Commenting on the impact on growth of foreign direct investment
(FDI), on 24 February 2003 its International Relations Department said: "FDI can
act as a significant impetus to growth but only if the level of human capital
has crossed a certain threshold. The intuition behind this result is that the
more advanced technologies can be fruitfully put to use only after the required
human capital has been acquired. Should the technology, however, exceed the
absorptive capability of the host country, no trickle-down effects will ensue.
Similarly, it can be argued that the products of MNEs (multinational
enterprises) may often be too capital intensive for the needs of the host
country. The effect may then be to create 'dual economies', with one modern
sector and distinct from it a backward domestic sector with only limited
overlap. FDI of this kind might consequently result in an excessively capital-
intensive production process, leading to a less favourable development of the
overall employment situation."

This emphasises the need for us to pay very close and sustained attention to the
success of our Human Resource Development Programme to prepare our people to
have the vocational and professional skills required by the modern global
economy, which includes our First Economy.

In this regard, we have to be aware of the increased global mobility of skills,
which results in skilled people being drawn to other countries because of higher
pay and opportunities for professional development. This also gives us the
possibility to meet our skills shortages by improving immigration of the right
people into our country.

We must also ensure the success of the interventions to gain access to private
capital for targeted investments, as visualised by the Growth and Development
Summit, and properly to utilise the capital available to the government and the
public sector Development Finance Institutions.

Given the responsibilities that fall on the democratic state with regard to the
development and transformation of both the First and Second Economies, we have
to ensure that the state machinery is so organised, empowered and motivated that
it can discharge its responsibilities effectively. We must also mobilise the
people to participate in the eradication of the "unfreedoms" imposed on them by
a long history of colonialism and apartheid.

Simultaneously, we have to maintain the social expenditures targeted at
providing a social security net for the poor and disadvantaged, as well as
social development to achieve higher levels of education, better health and
nutrition, and other outcomes to improve the quality of life and empowerment of
all our people, including the women and the youth in both urban and rural areas.

However, the democratic state will have to take great care to ensure that
expenditure on social security does not lead to such misallocation of public
resources that there is nothing to direct to the fundamental task of the
transformation of the Second Economy. In this regard, on 26 October this year,
Minister of Finance Trevor Manuel, said: "We need to acknowledge that our social
security net is under severe strain. Rapid growth in disability and foster care
grant applications indicate both rising income support needs and apparent
deficiencies in administrative systems. A sustainable social security system
must balance bringing in everyone who is entitled to grants and keeping out
everyone who is not entitled to them."

From all this we can draw the following conclusions:

* We must understand the irrationality of depending on "market mechanisms"
and/or private investment to advance the Second Economy to reach its takeoff
point.

* The Second Economy is too poor to generate the savings and capital it needs
for its development. Its levels of poverty and underdevelopment make it
impossible for it to attract significant volumes of private capital.

* Accordingly, public sector transfers must constitute the bulk of its
development funds.

* However, it will also be possible to use private sector capital to finance
profit making ventures within the Second Economy. Some public sector funds
should also be devoted to the development of such ventures on a recoverable
basis.

* Contrary to arguments about minimal state intervention in the economy, we must
proceed on the basis of the critical need for the state to be involved in the
transformation of the Second Economy.

* This state intervention must entail detailed planning and implementation of
comprehensive development programmes, fully accepting the concept of a
developmental state.

* The government must commit the necessary human and material resources to
ensure that the state machinery is able to discharge its development
responsibilities. Among other things, this must entail the necessary progress
with regard to the government's efforts to achieve an integrated system of
government, affecting all the national departments and the three spheres of
government.

* The government must ensure the success of its interventions with regard to the
development of small, medium and micro business within the Second Economy.

* As part of the process of monitoring and evaluating its interventions in the
Second Economy, the government should set some benchmarks against which to
measure the success of these interventions. These could include the reduction in
the relative share of social welfare spending within the national budget, caused
by the increase in numbers of people dependent for their income on productive
employment.

Taken together, the interventions in the Second Economy should, as Sen said,
ensure "the removal of major sources of unfreedom: poverty.poor economic
opportunities as well as systematic social deprivation, neglect of public
facilities.", responding to a view of development that goes beyond a narrow
"income-centred (GNP) view" of development.

** This is part seven in a special series of articles about global approaches to
poverty eradication and economic development. Next week, in the final part of
the series: 'Empty bellies have no ears'.

MORE INFORMATION:

I : Beware of the Natives!
http://www.anc.org.za/ancdocs/anctoday/2004/at41.htm#art1

II : Rescued by the Marshall Plan
http://www.anc.org.za/ancdocs/anctoday/2004/at42.htm#art1

III : The Truth & the Asian Miracle
http://www.anc.org.za/ancdocs/anctoday/2004/at43.htm#art1

IV: Bridging the EU development gap
http://www.anc.org.za/ancdocs/anctoday/2004/at44.htm#art1

V : The ACP and the philosophy of development
http://www.anc.org.za/ancdocs/anctoday/2004/at45.htm#art1

VI : Despair and the Washington Consensus
http://www.anc.org.za/ancdocs/anctoday/2004/at46.htm#art1

----------------------------------------------------------------------

16 DAYS OF ACTIVISM

Men have a leading role in changing attitudes

One of the tasks facing the country as it campaigns to end violence against
women and children is to mobilise men to take the lead in challenging the
attitudes which give rise to domestic abuse, rape and other forms of gender
violence.

South Africa is joining the rest of the world in marking 16 days of activism to
end violence against women and children from 25 November to 10 December. The 16
days begins on the International Day for the Elimination of Violence against
Women on 25 November and ends on International Human Rights Day on 10 December.
Before being designated by the UN General Assembly in 1999, 25 November was
marked in Latin America as a day against violence against women. It was the day
in 1960 when the three Mirabel sisters were assassinated in the Dominican
Republic during the Trujillo dictatorship.

In a campaign being organised by government and civil society groupings, South
Africans are being asked to help raise awareness, show their support, work to
change attitudes, and provide support to women and children who have experienced
or are vulnerable to violence.

They are encouraged to sign postcards available at 500 participating post
offices countrywide to pledge support for the 16 Days of Activism. The postcard
campaign is being used to raise funds for organisations dealing with violence
against women and children. Transnet has promised to donate R1 for each of the
first 250,000 signed postcards received. The money will be distributed among
non-governmental organisations fighting against women and child abuse.

South Africans are also being asked to wear white ribbons for the duration of
the campaign, and to participate in the many local activities taking place over
the 16 days.

The campaign also includes an initiative, called cyber dialogue, which uses
information technology to bring together people from across the country in
discussion about issues related to the 16 days campaign. Interactive discussions
taking place in different parts of the country will be linked to a central hub
at national level where experts and decision-makers will be available at a fixed
time each day to answer questions in a live "chat room"

. The concept includes a bulletin board to which individuals can post messages
and a daily exchange of information between countries in Southern Africa, as
well as a video link up between all those who participate on the last day of the
campaign.

This initiative aims to empower citizens, and especially women, in the use of
new technologies. It aims to encourage citizens to air their views and speak out
against violence and abuse; make 'e-governance' work for gender justice; and
link people across provinces and across borders in a common cause.

While not all instances of domestic violence or child abuse are perpetrated by
men, this is the case in most reported instances. To effectively tackle violence
against women and children it is therefore necessary to focus attention on the
role men and boys have to play in tackling behaviour which seems closely linked
to the nature of gender relations and notions of manhood and masculinity in
society.

At a media briefing this week, Correctional Services Deputy Minister Cheryl
Gillwald said the campaign would attempt to convince men of the essential and
positive role they have to play in the eradication of this form of abuse: "The
exposure and eradication of violence should be tackled in conjunction with
gender oppression as a whole."

She said that while much had been achieved in the first decade of freedom in
safeguarding the rights and dignity of women, much remained to be done: "Not
only the laws need to change - we need to change the structures and cultures
within which the law operates. We must change attitudes and behaviour through
awareness and education."

A document prepared for the cyber dialogues draws attention to the need for a
better understanding of gender roles and relations. It cites a United Nations
report, 'The role of men and boys in achieving equality', which says that
"gender based violence is influenced by the socialisation of boys and men. Many
men come to believe that violence against women is part of masculinity and the
subordinating and undervaluing women is a mark of manhood".

The document also refers to a study emanating from the University of KwaZulu
Natal which shows that many elements of masculinity - such as promiscuity, risk-
taking, and the desire for superiority over women - transcend race, culture and
class. It suggests that involving fathers in their children's development may
inhibit the development of anti-social behaviour and may promote positive values
and civic engagement among men.

Yet while socialisation and attitudes of male dominance may fuel violence
against women and children, the majority of men are not abusive in their
relationships. It is important that the voices of the majority of men be heard
on this matter, and that efforts be made to challenge notions of 'manhood' which
condone violence and abuse.

It is also important that the work to end violence against women and children
forms part of the broader effort to tackle violence and criminality within
society. This, argues Gillwald, should not only be for moral reasons, but
because violence hinders development: "Societies that experience high levels of
violence almost inevitably suffer from underdevelopment. The presence of
violence - even just a threat of violence - reduces people's chances of
achieving their full human potential."

And while the connection between crime and poverty is well established, less
mentioned is the connection between poverty and vulnerability to crime. "Poor
women and children are more likely to be victimised because they enjoy fewer
protections, less privacy and fewer resources," she said.

Speaking at the launch of the campaign, President Thabo Mbeki said: "We need to
make each one of us understand that human development and especially the
development of women and children is in the best interests of all - men and
women alike. Together we can and must defeat the demon of woman and child abuse.
This we will do, if we stand together and work together, not pointing figures at
one another."

MORE INFORMATION:

WomensNet 16 Days of Activism page
http://womensnet.org.za/16Days/

----------------------------------------------------------------------

ZIMBABWE DEBATE <Viewpoint - Malusi Gigaba>

Common liberals avoid the roots of the problem

The response of COSATU General Secretary Zwelinzima Vavi to Fikile Mbalula's
article that appeared in 'ANC Today' (Vol 4 No 45) was quite fascinating to
read. Admonishing him for behaving like a "childish schoolboy", he then
proceeded to behave exactly like it himself and, in that way, missed rather
crucial issues that the ANC Youth League President had raised.

Nobody disagrees with Vavi that there is need for an Alliance debate, to the
extent that this can be achieved, to forge common views about the situation
pertaining in Zimbabwe. Everybody agrees that there have arisen serious social,
economic and political challenges towards which it would be nigh impossible and
blatantly irresponsible to turn a blind eye. And, nobody would deny COSATU its
obligation to express its "solidarity towards workers".

Vavi was correct in reminding us that, theoretically, the government diplomacy
on the one hand, and trade union and civil society solidarity on the other are
complementary rather than contradictory; that, "Diplomatic initiatives will be
more effective if there is also public activity on the ground to highlight the
problems and dangers that Zimbabwe workers face".

The problem with such a statement is that it ignores the evidence provided in
Mbalula's article that in this instance government diplomacy and trade union
solidarity are not complementary at all. COSATU's own public pronouncements and
postures have tended to contradict the government. The very recent expedition to
Zimbabwe would have been differently undertaken had the intention been as
constructive as the General Secretary would really like us to believe.

Further, what Vavi overlooks in his response to Mbalula is that "public activity
to highlight the problems and dangers." is a concept that, as students activists
often like to say, needs to be problematised. It is obvious today that the
concept, "war on terror", means something in Washington, London and Canberra
that it does not mean in Baghdad, Gaza, Pretoria and most other places.
Accordingly, when somebody proposes "public activity", we should always ask: By
whom? For what? Against what/whom? For example, sponsored by big capital, there
were mass demonstrations to force President Chavez out of power in Venezuela.
Should we have supported that "public activity" simply because it was "public
activity"?

Yet another question is what has COSATU identified as the "problems and
dangers"? Apparently, what COSATU seems to have identified as "problems and
dangers" are but the manifestations of the problem. What seems to have coincided
in Zimbabwe are the outcomes of both the decades of landlessness as well as
implementation of misguided economic policies of the kind that our own "left"
seemingly blindly defends, even in the face of contrary evidence! These are the
root of the Zimbabwean problems, and they do not affect workers alone, as the
approach of COSATU seems to suggest. Starving rural people face serious dangers
and problems, which taken together in their totality, face workers too.

However, a common liberal would seize on the manifestations of a problem rather
than the roots of the problem, in order to leave the status quo intact. They
would elevate the rule of law and democracy, and not ask - for which class?
Apparently, in Zimbabwe, the rule of law and democracy means the unfettered
right of the propertied classes that are almost wholly white to property
ownership and economic domination. If the ZANU-PF or even the MDC could threaten
this, then they would have transformed themselves into eternal enemies of the
propertied classes, which, because they have lost domestic power in Zimbabwe,
would then call upon their governments in Britain and the United States to fight
their battles for them. COSATU, at least I hoped, would better know this and
therefore be able to distinguish between what things seem to be and what they
actually are!

Thus Vavi's response to the issues raised by the ANC Youth League President
betrays hostility towards those opposed to the Downing Street and Washington
line. But, it also betrays a dangerously narrow conception of trade unionism.
Its revolutionary content is stripped and is gradually being replaced by
liberalist tendencies, which hail every worker and trade union as inherently
progressive, and every public activity as revolution. In this regard, whoever
presents themselves as trade unions, and further professes a liking for
democracy, human rights and workers, are embraced as "comrades-in-arms".

If government diplomacy and trade union and civil society solidarity were
complementary rather than contradictory, it is the latter that the COSATU
approach has over-emphasised in relation both to the South African government
approach as well as in relation to the land starved rural people in Zimbabwe.
Emphasising the plight of the workers ahead of that of the rural masses has
created tension between these two classes rather than offered solutions. This is
in itself a dangerous political tendency that divides rather than unites
exploited classes. Surely, COSATU should know this that in the conduct of a
progressive revolution, workers and peasants need to be mobilised to be on the
same trenches. To divide them would derail the struggle.

In an article we circulated for internal discussion within the ANC Youth League
in 2003, 'Much ado about Zimbabwe', we derided the fact that there were some, in
our country and abroad, who sought that South Africa should become "the shop-
steward for colonialism" in Zimbabwe, implementing in Zimbabwe exactly the
policies that had, hitherto, imposed untold hardship on the sister peoples of
that country, wrecked its economy, made its development unsustainable and,
hence, dismally failed.

In that article, we made the two critical and related observations that the
principal problem in Zimbabwe was the landlessness of the African majority, and
that the solution to the problems in Zimbabwe lay in the hands of the
Zimbabweans themselves, not in some foreign imposed solutions. We made the note
that apparently, in embarking on the current land reform programme, President
Mugabe's government had committed the cardinal sin to challenge white property
rights, to reclaim the land historically expropriated by white settlers.

We then proposed that, "Our responsibility as a movement is to work with the
people of Zimbabwe to give such assistance as may be required to help them solve
their problems . to help them arrive at solutions that will benefit all the
people of Zimbabwe, our region and the rest of Africa. Those whose principal
task is to advance the interests of their kith-and-kin in Zimbabwe have nothing
to teach us as to what we should do". We have always insisted, much to the
chagrin of some, that only a political solution arrived at by the Zimbabweans
themselves contained within it any hope for sustainable political and economic
stability and progress for Zimbabwe.

Apparently, to say this seems to spell out a problem. When the settlers
expropriated the Zimbabwean land, they still held in their favour the balance of
power. Now, things have changed and, accordingly, it appears that to suggest
that the matter be resolved within the borders of Zimbabwe means to surrender
their offspring to the devil. They hope, once more, for an external intervention
that would favour them against the land and justice hungry people of Zimbabwe.

Those opposed to this approach tend to contradict the quest for land justice
with what they deem to be human rights and political freedom. Better still, they
present political freedom to mean that ZANU-PF's main political opposition must
govern. If this does not happen, then there is a human rights crisis and
dictatorship in Zimbabwe.

But, unlike the line often traversed by common liberals, our starting point is
not the political and economic "crisis", but it is the underlying socio-economic
problems that have given rise to the political crisis. However, that
notwithstanding, the ANC Youth League has always and consistently made its views
known that not all is right in Zimbabwe: "It is obvious that a number of things
have gone wrong in Zimbabwe. These include the manner in which the land question
has been handled, the response to the challenge posed to ZANU-PF by the
opposition MDC, and economic policies pursued since independence". We warned
that, "The UK/Australia faction of the white Commonwealth has seized on these to
construct its anti-Mugabe platform . This central concern is hidden behind a
barrage of propaganda designed to project President Mugabe as being guilty of
the most heinous crimes against humanity".

In his own article in 'ANC Today', ANC Youth League President Fikile Mbalula
argues: "Our movement and Government have disagreed with ZANU-PF and the
Government of Zimbabwe about a number of issues relating to the situation in
Zimbabwe. We have not hesitated to discuss any and all these matters with both
ZANU-PF and the Government, as well as intervene practically where this was
necessary.

"We did this, and will continue to do this, not because somebody else demands
that we do so. We will continue to engage the broad spectrum of the Zimbabwe
leadership because it is in our country's direct and immediate interest that our
neighbour, Zimbabwe, should overcome its political, economic and social
problems.

We fully understand the challenges facing Zimbabwe. At the same time we
understand other things about Zimbabwe, which self interested and ideologically
driven propaganda against the Government of Zimbabwe is determined to deny and
hide from the public eye".

Therefore, for Vavi to suggest that Mbalula's article amounted to "an
ideological defence of Robert Mugabe's ZANU-PF government and a denial that
there are any serious problems in the country" is both a distortion and is
dishonest. What COSATU seems to favour is a populist showdown with the
Zimbabwean government, and has adopted a similar disrespectful attitude towards
it as is the case in London and Washington. Perhaps, an ideological defence of a
fellow comrade in arms is better than an ideological defence of the Downing
Street and White House line! Just perhaps.

** Malusi Gigaba is a member of the ANC National Executive Committee.

----------------------------------------------------------------------

US POLICY TOWARD ZIMBABWE

Correcting the record

EDITOR'S NOTE: Below is a letter from United States Ambassador Jendayi E. Frazer
in response to comments attributed to her in an article published in ANC Today
Vol 4 No 45. As ANC Today, we regret the reference in the article to a UK media
report which, it is now clear, contained a distortion of the Ambassador's
comments. We are grateful for the clarification provided by Ambassador Frazer,
which we fully acknowledge and accept.

"The ANC Today article 'Signalling left, turning right' by Fikile Mbalula,
President of the ANC Youth League, seriously misrepresents United States
Government policy toward Zimbabwe and my remarks to international journalists in
August. In a cordial phone conversation with Mr Mbalula, I had an opportunity to
explain US policy and how my remarks were distorted when reported by a British
newspaper. Your readers deserve the same clarification to correct the public
record.

"First, I have never - repeat never - called for regime change in Zimbabwe and
it is not US Government policy to seek regime change. The United States seeks a
'return to democracy' through free and fair elections in Zimbabwe brought on by
open dialogue and negotiations between ZANU-PF and MDC. We believe that
transparent talks will help to build confidence among the people of Zimbabwe,
the region, and the international community, and to reveal whether progress is
being made to end Zimbabwe's current governance crisis.

"Second, the United States continues to support the South African governments'
leadership, working with other Southern African Development Community (SADC)
countries, to facilitate free and fair elections. I've stated that the US could
join a coalition of other willing states, such as Nigeria and other African
countries, to support Southern African efforts to push and encourage successful
negotiations.

"Third, United States policy seeks free and fair elections whatever the outcome.
The decision on who should govern Zimbabwe is entirely that of the Zimbabwean
people. Our collective effort should focus on ensuring a conducive environment
to hold a legitimate election through sincere implementation of the election
principles and guidelines unanimously adopted at the SADC Summit in Mauritius.

"To correct the record: I have never called for regime change in Zimbabwe. My
original responses to questions on Zimbabwe were accurately reported in South
African news outlets, including a Pretoria News article by Basildon Peta. A UK-
based newspaper, The Independent, distorted Peta's article including using the
sensationalist headline, 'The US seeks 'coalition' to force Zimbabwe regime
change.' When called to task, The Independent corrected the headline and story
on its on-line version. I also immediately corrected the record during
interviews with SABC and on radio talk shows.

"No South African news outlet repeated the sensationalist and false UK-published
story so I was very surprised and disappointed to see the ANC Today article
characterising my views based on false information."

----------------------------------------------------------------------

This issue of ANC Today is available from the ANC web site at:
http://www.anc.org.za/ancdocs/anctoday/2004/at47.htm

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