A titan that serves the people of South Africa!

The South African public will have seen and heard the media reports on 12 and 13 October reflecting the announcements made by our national government after the regular Cabinet meeting held on 12 October. I refer here to the reports concerning our government's discussions around the issue of placing our country on a higher economic and development growth path. Reflecting what our Government said, one newspaper carried the headline "Cabinet approves blueprint for 6% growth by 2010".

The work being done by our government in this regard derives directly from decisions taken by our movement. The central theme of our 2004 Election Manifesto was "A people's contract to create work and fight poverty". The 2005 National General Council (NGC) re-focussed on this objective and, among other things, said: "The central challenge our movement faces in the Second Decade of Freedom is to defeat poverty and substantially reduce the level of unemployment. This means that the ANC and government must produce a coherent development strategy. Elements of this would involve identifying where we need to move and what strategic leaps we need to get there."

The 51st National Conference of our movement adopted detailed resolutions indicating "where we need to move and what strategic leaps we need to get there". Among other things it said: "The ANC's vision has always been one of a prosperous, equitable, stable and democratic society. In the economy, our vision has been one of decent work and living standards for all, in the context of qualitatively improved equity in ownership, management skills and access to opportunities...It is imperative that we mobilise the ANC's core constituencies - the poor, workers, women, youth and black business - around our economic strategies."

This is the perspective that informs our government as it works to elaborate a programme of action to respond to the challenge set by the 2005 2nd National General Council, which said the central challenge our movement faces in the Second Decade of Freedom is to defeat poverty and substantially reduce the level of unemployment.

In this context, it is imperative that our movement carries out the task it set itself at the 51st National Conference, namely, to mobilise the ANC's core constituencies - the poor, workers, women, youth and black business -around our economic strategies.

The leadership of our movement will therefore have to participate both in working on the elaboration of the higher growth path, and mobilising our core constituencies to support the strategies we are working on to achieve this higher growth path.

The work our government is doing to ensure the realisation of the vision set by our movement, to eradicate poverty and underdevelopment, emphasises the need for all genuine members and loyal structures of our movement to continue to focus on this central and strategic task of our movement.

The ANC was formed and exists to serve the people of South Africa. To serve our people today means that we must concentrate our efforts on what the 2nd NGC defined as our central challenge during the Second Decade of Freedom.

In this regard, it is vitally important that all members and supporters of our movement should firmly, and in a principled, disciplined and sustained manner, oppose and defeat all manoeuvres that seek to divert our attention away from attending to the central challenge of the National Democratic Revolution as determined by our 2nd NGC.

Currently, our branches and other structures are involved in the important process of choosing our candidates for the next local government elections. It is clear that in some localities, this has evoked competition among our members that has absolutely nothing to do with the commitment to serve the people of South Africa, which we expect of all genuine members of the Congress Movement.

Rather, some of the people who are competing to win nomination as our candidate local government councillors are obviously seeking support on the basis that once they are elected to positions of power, they will have access to material resources and the possibility to dispense patronage.

They are therefore mobilising members of our organisation to support them on the basis that when they get elected, they will use their government positions to extend material benefits to those who supported them.

These goings-on tell the naked truth that the ranks of our movement are being corrupted by a self-seeking spirit that leads some among us to view membership of our organisation as a stepping stone to access to state power, which they would then use corruptly to plunder the people's resources for their personal benefit.

If we permit this practice to become entrenched, we would guarantee both the destruction of the ANC and the rest of the progressive movement, as well as the failure and defeat of the National Democratic Revolution. Through our firm and principled actions we must communicate the unequivocal message to all and sundry that we will not allow this to happen.

Our practical actions must convey the message that we will not betray the memory of those who sacrificed everything, including their lives, to ensure the liberation of our people, by standing by as the pursuit of naked material self-interest begins to define what it means to be a member of the Congress Movement.

Properly to respond to the central challenge of the Second Decade of Freedom, in the interest of the masses of our people, means that we have to fight and defeat poverty. We have to fight and defeat unemployment. We have to fight and defeat hunger and malnutrition.

We have to fight and defeat underdevelopment. We have to fight and defeat ignorance and disease. We have to do all the things that our movement has decided are central to the achievement of the goal of a better life for all.

Our movement and government are convinced that what we have done during the first eleven years of our liberation has created the conditions for us to achieve the higher growth and development rate that our government is discussing.

In this regard, we must also point out that the government understands very well that the task to achieve the higher growth and development rate we are discussing requires a united national effort. For this reason, it is interacting and will continue to interact with its social partners - labour, business and civil society - to ensure the unity in action of these social forces to accelerate the advance towards the achievement of the goal of a better life for all.

This is in keeping with the position these social partners adopted at the 2003 Growth and Development Summit (GDS), when they said: "The constituencies of Nedlac - government, business, labour and the community -reaffirm their commitment to social dialogue and working together to address the economic and development challenges our country faces. The constituencies commit themselves to a common vision for promoting rising levels of growth, investment, job creation and people-centred development."

As was the case when the GDS convened in 2003, the government and its social partners must approach the task of elaborating the practical programme to achieve a higher growth and development rate with the necessary optimism and conviction about the certainty of success.

During the course of our struggle against apartheid, we borrowed a powerful slogan from our comrades fighting to liberate their countries from Portuguese colonialism - a luta continua: a vitoria e çerta! The struggle continues: victory is certain!

As the 2nd NGC said, the central task of the contemporary phase of the National Democratic Revolution (NDR) is to defeat poverty and substantially reduce the level of unemployment. This defines the principal struggle we have to wage today, to advance the NDR. It therefore speaks to what we mean when we say - a luta continua!

When we achieved our liberation in 1994, we inherited a deeply entrenched legacy of poverty, unemployment and underdevelopment that had emerged out of three-and-a-half centuries of colonialism and apartheid. As we took power, we knew that it would not be easy to eradicate this legacy, and that the achievement of this strategic goal would take time.

Nevertheless, driven by the same revolutionary optimism that inspired us to sustain the difficult struggle to defeat the apartheid system, we remained and remain firm in our conviction that our victory over this legacy was and is certain. As we say, today - a luta continua! - so do we repeat, today - a vitoria e çerta!

Almost as a matter of "the national sport" to which we have become accustomed, to present the new South Africa in the worst possible light, there are some in our country who are determined to undermine and destroy our confidence that victory is certain.

Specifically, these pessimists make firm assertions that it is impossible in the foreseeable future to achieve the 6% growth rate mentioned at the beginning of this Letter. None of us would be surprised if these are the same people who were convinced in 1994 that it was impossible for our movement successfully to lead the nation to realise the goals of national reconciliation, reconstruction and development.

Our conviction that we will indeed achieve the goals our movement has set for our government and nation to create jobs and eradicate poverty is based on more than the revolutionary optimism that is the very life and blood of any genuinely progressive movement. It is also very firmly based on what is actually happening in our economy, which serves as a practical testimonial of the successes that our movement has scored during our First Decade of Liberation.

To substantiate this assertion, I would like to list a few facts and professional assessments, all of them reported during the second half of this year, and reproduced, among others, on the "sagoodnews" website:

• The economy expanded by 4.8% during the second quarter of 2005 according to Statistics South Africa;
• The business cycle has been in an upward phase for 71 months since September 1999, making this the longest upswing in the recorded economic history of South Africa, according to the South African Reserve Bank's Annual Economic Report for 2005;
• Business confidence in South Africa climbed to the highest level this year, according to the August results released by the South African Chamber of Business (SACOB);
• The seasonally-adjusted Investec Purchasing Managers Index, an important indicator of business conditions, increased from 59.8 in June to an all-time high of 61.7 in July 2005;
• (Reported on 31 July): "There is no doubt that South Africa is firing on all cylinders," says Neil Gregson, head of emerging markets at Credit Suisse Asset Management in London. "It is an economy demonstrating the classic attractive features of an emerging market with controlled inflation and rapid growth." And he believes that South Africa has the lead on other emerging markets rivals. "On average, South African companies are better run than many others," he says;
• According to the Reserve Bank Annual Economic Report for 2005, the responsible economic policies pursued by the authorities and improved prospects for the economy were recognised by three rating agencies who upgraded their rating of South African debt instruments during the course of the past year. This contributed to a further decline of nominal long-term interest rates, to levels previously observed in the late 1970s. Over the past year-and-a-half the variability of short-term and long-term interest rates and of the effective exchange rate of the rand receded appreciably, reinforcing the platform for launching faster growth and development in the coming years;
• Dr Roelof Botha, economic adviser to PricewaterhouseCoopers and Sake and Absa's 'Economist of the Year' for 2004, believes that South Africa will enjoy economic growth of 5% in 2005, sustainable in the near future because of the economic fundamentals in place. Dr Botha delivered the most accurate predictions for economic growth and the long- and short-term interest rates, the second most accurate projection of the prime rate and the third best estimate of the growth of consumer spending out of the 29 competing economists. What makes his achievement that much more impressive, was that Dr Botha's predictions were constantly the most optimistic of the economic crystal ball-gazers! South Africa's economic performance has exceeded the expectations of all but one of our country's top economists... Looking further forward, he declares: "On the route to 2010, nothing will stop us!";
• Absa's Senior Treasury Economist, Chris Hart, believes South Africa currently offers some of the best investment opportunities in the world. "In this market it is definitely possible for even a small investor, earning only a salary, to achieve financial independence," Hart said. "So long as he does his homework, tempers his aspirations for fancy cars and houses and realises investing is a long-term process.";
• South Africa's economy, with a more fairly valued Rand, low inflation rate, higher growth path and increased consumer spending is enjoying one of its most healthy periods for many years. This was the message from Rudolf Gouws, chief economist for Rand Merchant Bank at the seventh Consumer Goods Council/Efficient Consumer Response conference in Sandton. Gouws says: "We have entered a new era of lower inflation and higher economic growth. Growth is being driven by fixed investment which is one of the most positive indicators of a healthy economy." Business confidence, he claimed, was at a 23-year high: "We are seeing the longest recorded economic upswing that will move along a fairly horizontal band underpinning the private sector investment we are experiencing." The data also indicates that in terms of job creation, South Africa is breaking into positive terrain.;
• Employment in the formal non-agricultural business sector increased in the second quarter of 2005, according to data released by Statistics South Africa this week. The non-agricultural sector created 131,000 new jobs between April and June, an increase of 1.9% on the estimated number of employees as at the end of March. Gross earnings increased by 3.8% of this period. The construction industry was the strongest performer in creating jobs, with the industry's labour force expanding by 46,000 or 12.3%.;
• Five hundred thousand jobs were created over the past year, from March 2004 to March 2005, according to Statistician General Pali Lehohla. This is the first time in a recorded 12-month period that so many jobs have been created...According to the report, the number of employed persons rose from 11.4 million in March 2004 to 11.6 million in September 2004 and 11.9 million in March 2005;
• Tourism has continued to prove that it is indeed the South African economy 's "new gold" by posting a record 1,795,989 foreign arrivals between January and March 2005, up a significant 10.3% on the same period last year. Chief executive officer of South African Tourism, Mr Moeketsi Mosola said that the 1.7m tourist arrivals marks the highest number of first quarter arrivals ever recorded in the history of the country's tourist statistics. "We are equally encouraged by the fact that for the third consecutive year the industry has enjoyed strong growth, averaging 4,9%," he said. Mosola highlighted that the first quarter of 2005 also saw an increase in Total Foreign Direct Spend (TFDS) by tourists, which increased by 25.2% from R10.3 billion in the first quarter of 2004 to R12.9 billion during the same period in 2005.;
• South Africa has been voted as the second most popular travel destination and Cape Town as the most popular foreign city, in a poll conducted by British online news service telegraph.co.uk. Cape Town came in above Sydney, Venice, New York and Vancouver as the most popular foreign city to visit and South Africa moved up one place from last year to sit above Australia, Canada and the Maldives. More than 30,000 readers were polled by the NOP research group for what is the biggest survey of Britain's travel habits...

All these facts tell a more powerful story than all negative "perceptions" about our country, however pervasive and well established these might be. These empirical facts derive their power from the simple reality that they repudiate the persistent falsification of our situation that has, for a decade, inspired the efforts of the propagandists who are determined to present democratic South Africa in the worst possible light.

As positive as the picture above is, as told by the empirical evidence we have cited, questions remain about whether the situation in our country is not, in fact, even better than the situation painted by the evidence we have cited.

For my part, I have occasionally stated my conviction that our economy is performing better than official statistics indicate, with reality outperforming perception. Not unexpectedly, this has elicited derisive comments from the sceptics and pessimists.

On 6 October 2005, the financial publication, "Moneyweb", posted an article on its website written by Erika van der Merwe, entitled "SA's missing millions". The article says:

"It is more than just a gut feeling that convinces analysts that the size -and even the growth rate - of the South African economy is being underestimated. Concrete statistical evidence suggests that there could be more to this market than the official statistics suggest. Old Mutual Asset Managers' chief economist, Rian le Roux, says he has two reasons for suspecting that there is some undercounting afoot.

"The first is that Treasury's VAT receipts - a fairly concrete and broad-based indicator of spending levels in the economy - are growing faster than nominal gross domestic product (GDP). The latter is the outcome of official estimates of the value of all goods and services produced and rendered in the economy; using regular sample surveys as well as periodic surveys with a far wider reach, Statistics SA updates these numbers quarterly.

"While the latest figures from Treasury show that VAT receipts grew by 14% on a year-on-year basis between April and August, nominal GDP grew by 9,1% (year-on-year) between April and June.

"Le Roux's second piece of evidence is the growing gap between the two official estimates of the size of the economy - one of which measures activity from the production side and one of which looks from the expenditure side...

"But in a fast-changing economy such as ours, one which is undergoing huge structural shifts, measuring economic activity from the expenditure side may be more accurate. Since the production activities and services rendered by a notable portion of the economy may not be counted, on account of these being generated by informal or small businesses, the spending behaviour by these businesses and individuals could be a better indicator of their economic vibrancy.

"Le Roux says that, rather than deducting the residual from the expenditure measurement of GDP, and adding it to the production estimate instead, hoists GDP growth smartly. Adding the residual back in takes first quarter GDP growth - on a quarter-on-quarter, annualised basis - up from 3,5% to 4,7%. Doing the same for the second quarter numbers pushes growth from 4,8% to 6,1%," he says. And GDP growth in 2004 looks more like 4,4% than the reported 3,7%.

"Joe de Beer, Director of National Accounts at Statistics SA says it would not be wrong to conclude from the evidence that the GDP numbers need revision."

I am convinced that we can and must achieve the higher growth and development rate that our government and its social partners are discussing, and thus help to create the wealth we need to meet the needs of the people. During our First Decade of Freedom we have, as a nation, created the firm base for our country to realise this objective.

For our movement, the achievement of this goal is central to our obligation practically to demonstrate the honesty and seriousness of our commitment to the people, which we reaffirmed when we undertook that we would enter into a contract with them to create jobs and fight poverty.

What we do in this regard will define whether our organisation, the ANC, continues to maintain its noble character as a servant of all the people of South Africa, or degenerates into an ignoble, blood-sucking and corrupt parasite, an enemy of an immensely heroic people. However, these masses are convinced that they will have a happy future because they know that they have built a titanic movement, the ANC, which will always serve the people of South Africa!

South Africa's Youth

Report on youth in 2005 - a call to action

A report on young people in South Africa released this week by the Umsobomvu Youth Fund, detailing achievements, challenges and implications for youth, is a call to action to tackle poverty, unemployment and skills development.

Based on research commissioned by Umsobomvu Youth Fund, and conducted by the Human Science Research Council, the report focuses on the status of youth in the first decade of democracy with an emphasis on key socio-economic areas, including economic participation, education and skills development, and poverty, health and well-being and social integration and civic engagement.

Umsobomvu was established by government in January 2001 to promote job creation and skills development and transfer among young South Africans between the ages of 18 and 35. To carry out its mandate, the fund makes strategic investments to create opportunities for young people to acquire skills, to access job opportunities or to pursue meaningful self-employment opportunities.

While the report is intended to help the fund in shaping its programme, it has broader relevance. Speaking before the launch of the report, Umsobomvu chief executive officer Malose Kekana said: "The report is important to youth empowerment and transformation. It is relevant to decision makers including, civil society, government, private sector and youth development practitioners working on the youth development sector."

Among the key findings of the report are that unemployment is arguably South Africa's major scourge with black youth being the most affected. The report recommends that government's plans to halve unemployment by 2014 focus strongly on young people, as they represent around 70% of the unemployed population.

The recommendation is for the participation of youth in economic activities through macro-economic interventions such as encouragement of foreign direct investment that has potential to benefit young people. Other interventions the report recommends include entrepreneurship training such as those offered by the Umsobomvu Youth Fund; including youth cooperatives. These programmes should be strengthened further to promote youth economic activity.

The report notes that the country inherited education and training systems skewed by racial inequality. It acknowledges that every effort must be made to retain young people in schools, where good education is offered and efforts are being made to dissuade them from dropping out before completing their secondary school. "Quality education should reflect contemporary requirements in the world of work. This includes a holistic approach to education that includes technical skills, life skills and preparation for work."

The report argues that the social definition of health and well-being among youth - rather than a narrow medical definition - should be explored. Issues that need to be tackled include sexually transmitted infections, HIV and AIDS, substance abuse, suicide, disability and crime and violence.

Discussing social integration and civic engagement, the report acknowledges the role of the youth in dismantling apartheid. However, it notes the low participation of youth in organisational participation during the democratic dispensation. The report recommends that opportunities should be made available for young people to affirm their worth and draw on the resources of the cultures with which they identify.

"These life skills should be stressed within the framework of a holistic approach to the development of young people. The focus on education and job creation needs to be increased to discourage young people from adopting risky patterns of behaviour such as crime, substance abuse, and potential exposure to HIV/AIDS and unplanned pregnancies," Kekana said.

More Information:

• Status of Youth Advocacy Report, September 2005

Return to Index