To our readers – a Merry Xmas and a Happy New Year!

This is the last edition of ANC TODAY for the year 2005. We would therefore like to take this opportunity to convey to all our readers our best wishes for a Merry Christmas and a Happy New Year. We also add our voice to the appeal of the nation to all road users, including pedestrians, to respond to the important call to Arrive Alive!

All of us should use the holiday period immediately ahead of us to take a well earned rest after what has been a very busy year for our people and the peoples of Africa, which also further strengthened the confidence of these masses in the certainty of a better future for themselves.

For all of us as Africans, the year 2005 began very well, opening with the signing of the Sudan Comprehensive Peace Agreement (CPA) that finally ended the long drawn out war between Northern and Southern Sudan. The year will end with the holding of the constitutional referendum in the DRC, this being the first time since the last elections in 1960 that the Congolese participate in a democratic electoral process.

Domestically, we began the year on a highly positive note, by launching the important campaign to mark the 50th anniversary of the Freedom Charter. We close it on the same high note, with activities that celebrate the establishment of the Truth and Reconciliation Commission 10 years ago.

The historic developments in Sudan and the DRC and the two anniversaries in our country bring sharply to the fore the need especially for the progressive forces on our continent, among whom the ANC belongs, at all times to focus on the principal tasks that confront the African national democratic movement in each of our countries and on our continent as a whole.

As this movement, including the ANC, responds to these tasks, it will continue to face many temporary diversions that seek to impose themselves as major issues that define the national democratic revolution (NDR). The African national democratic organisations therefore face a permanent challenge at all times properly to understand the imperatives of the NDR, and at all times never to lose sight of the strategic objective to serve the interests of the people.

In our country, as elsewhere on our continent, the masses of our people demand and expect of the progressive movement sustained and principled action targeted on achieving such objectives as:

• peace, security and stability;
• national unity and equality in our diverse multi-national, multi-ethnic, multi-cultural and multi-religious societies;
• democracy, human rights and popular participation;
• the emancipation of women and gender equality;
• the eradication of poverty and underdevelopment;
• African integration and unity, and the restoration of the dignity of the African people, including the African Diaspora; and,
• a beneficial integration of Africa within the globalising world, ending its marginalisation and regression.

At all times, and as they confront their daily challenges, the national democratic organisations on our continent must ask themselves whether what they are doing is focused on achieving progress towards the realisation of these objectives, which address the strategic objective of achieving a better life for the masses of the people.

This is particularly relevant to us as we reflect on the lessons of the year 2005, during which we have seen activities that are totally foreign to our broad movement. These have included people who pose as members of this movement engaging in various unacceptable activities.

I refer here to the burning and destruction of public property and the perpetration of violence against legitimate representatives of our movement, including their property. I refer to the destruction of the property and symbols of our movement, and contemptuous disregard for our movement’s democratic processes, such as those that relate to the selection of our candidates for our legislatures.

I refer also to attacks against the organs of the democratic state, including assaulting police officers with petrol bombs. I also have in mind mischievous efforts to elevate administrative issues, such as the demarcation of provincial boundaries, into important issues of the national democratic revolution, to divert attention away from the fundamental concerns of the masses of the people.

However, we are fortunate that, despite everything else that might have happened, occasioned by negative forces in our midst, we can celebrate the year 2005. This is because this important year has been defined by important advances with regard to many of the goals we have mentioned, that have to do with advancing the genuine interests of the people.

Peace between the Sudanese north and south represents a major contribution to the realisation of the critically important goal of peace and stability on our continent, which has eluded us for many decades, as it continues to do in Darfur.

The Sudanese CPA also opened the way in that country for the unfolding of the process of national reconciliation, which is a vitally important element in the effort to ensure the integrity and cohesion of many of our countries, including our own. In the Sudanese case, the importance of this process is underlined by the fact that it has to address and eradicate an entrenched legacy of antagonisms and conflict based on racial, religious, cultural and other divisions.

As in our country, we hope that, in time, the Sudanese people will be able to say – Sudan belongs to all who live in it, united in their diversity! The achievement of this objective by the Sudanese people would have a powerful impact in advancing the goal of genuine unity within all African countries and on our continent as a whole.

In this context, we were fortunate that we had the possibility this year to reaffirm the vision contained in the Freedom Charter, including its critical injunction that – South Africa belongs to all who live in it, black and white! At the same time we had the possibility to examine the principal features of the programme of social transformation on which we must continue to focus, to build South Africa into a true home for all our people.

The celebration of the 10th anniversary of the TRC will once again help to draw our attention to the continuing challenge in our country to work for national reconciliation, and centrally the objective of building a non-racial society and cultivating the shared new patriotism that Nelson Mandela called for. We must use the forthcoming year to build on the achievements of the TRC, and the vision that inspired its establishment. We will be assisted in this regard by our celebration of the adoption of the 10th anniversary of our National Constitution.

The constitutional referendum in the DRC will bring this major sister African country closer to the achievement of the goals important to our continent as a whole, of a stable peace, national unity, democracy, development and the eradication of poverty.

This critically important referendum will be held in very difficult and challenging circumstances. This actuality underlines the reality that both in our country and elsewhere on our continent, to achieve victory the national democratic movement will have to overcome major obstacles.

Describing the problems confronting the holding of a successful referendum in the DRC, David Lewis of the Reuters news agency reported on December 15 from Mbandaka in the DRC hinterland as follows:

“The outboard motor strains and water threatens to pour in with every wobble of the dugout canoe ferrying 15 election workers, voting kits and a mountain of food steadily along the vast, brown Congo River. Hours later and 65 km (40 miles) further downstream the team arrive in Maita, a remote jungle village. Today Maita is little more than a collection of huts, but come Sunday thousands of people are expected to paddle here to take part in a referendum on a new constitution, Congo's first national democratic election in more than 40 years.

“U.N. and Congolese officials are flying to remote towns, plying long stretches of river, bumping down rutted roads and hiking through thick forests trying to open some 40,000 similar voting "offices" across Africa's third largest country on time. ‘This is a nightmare - it is the first time we had ever done something like this,’ said Gini Ehungu, spokesman for the Independent Electoral Commission in Equateur Province, an area the size of France with just 65 km (40 miles) of paved roads.

"In the south, we used the river. In the north, there are some roads, but they disappear so we had to use helicopters. Then in the bush, people walked for days carrying equipment - like in the old days with the slave caravans."...

“Added to the lack of basic infrastructure and vast distances, thousands of gunmen still roam the hills of eastern Congo, targeting civilians and looting villages, despite efforts by U.N. peacekeepers and government soldiers to control them. ‘With all this, in terms of logistics, these must be the most difficult elections to organise in the world,’ said a Western logistician helping organise the polls, which are expected to cost over $430 million.”

These are extraordinarily difficult circumstances in which to organise for a democratic expression of the will of the people. Despite this, already 24 million Congolese have registered to vote. These masses are determined to honour the fundamental objective central to the African renaissance project, that – the people shall govern!

It is this same determination, to improve the lives of the people, that gives us the possibility to celebrate 2005 as a year during which, domestically, we scored major achievements with regard to economic growth and development – and the attendant poverty alleviation - yet another vital element of the national democratic revolution.

To achieve this, we have had to overcome an economic legacy no less daunting than the nightmare described by David Lewis of Reuters, relating to the re-establishment of democracy in the DRC.

Despite this legacy, we have built an economy that has achieved the highest growth rate since 1984. The economy has grown during every quarter since 1998, representing an unprecedented upswing in our recorded economic history. This growth is also accompanied by a significant increase in new job opportunities. Inflation has remained within the targeted 3-6% band for 27 consecutive months. Business confidence is at a 23-year high. From London, Neil Gregson of Credit Suisse Asset Management correctly observed that “There is no doubt that South Africa is firing on all cylinders.”

As we bring the year 2005 to a close, we must celebrate the reality that our continent has made important advances with regard to a whole range of important areas, including peace, democracy, economic development and poverty alleviation.

As the year ends, an important international event with an immediate bearing on our fate as Africans is taking place far beyond the shores of the African continent. This is the Hong Kong World Trade Organisation Ministerial Conference, from which we cannot expect an outcome that actually serves the interests of the African poor and the poor of the world.

Of all the major global events that have taken place this year, above all others this WTO Conference emphasises the need for the African progressive movement to strengthen its ties of solidarity with the world progressive movement to build a global political, economic and social order focused on advancing the interests of the poor working people everywhere.

The year 2005 has confirmed that, acting correctly and remaining loyal to the objective at all times to serve the interests of the people, the progressive movement in our country, our continent and the rest of the world has the possibility to achieve significant advances towards the realisation of the goal of the creation of a people-centred society. The victories achieved in this regard during 2005, constitute the basis for all of us to enjoy a merry Christmas and a happy New Year!

Economic Development

Investment survey points to progress and highlights challenges

An assessment of the investment climate in South Africa, released this week by the Department of Trade and Industry and the World Bank, points to a growing confidence in the economy and provides valuable insights into the work that needs to be done to increase levels of investment and boost growth.

The assessment, which follows a survey of South African businesses, compares the investment environment in the country with those of other middle-income countries in Africa and other parts of the world. In doing so, it seeks to identify the country’s strengths, and highlight those issues which may act as constraints on investment.

An interesting finding, according to the report, is that relatively few firms surveyed rated the constraints to investment as major or severe obstacles. The biggest constraint identified – worker skills – was only rated by about a third of firms as a “serious problem”. This is far lower than in most other countries. This suggests that there isn’t any one area of the investment climate that businesses are overly concerned about.

While this indicates a healthy investment environment, and general confidence among private sector investors, it is necessary to study these and other findings in detail to establish why the rate of investment in the economy has not been higher.

The report notes that since the advent of democracy 11 years ago, “South Africa’s macroeconomic performance has been solid but not spectacular”. Between 1994 and 2003, annual GDP growth averaged about 2.9%.

Although South Africa’s economy has grown in a sustained manner, its growth has been modest when compared to comparable countries outside of Africa. These include China, Thailand, Malaysia, Poland and Brazil. These countries have also enjoyed higher rates of investment than South Africa, whose total investment has remained in a narrow band between 15 and 16 percent of GDP.

By contrast, however, labour productivity in South Africa is relatively high. This is far higher than even the most productive countries elsewhere in Sub-Saharan Africa and compares well with other middle-income countries. It is also higher than in the fast growing Chinese economy.

Considering the issue of productivity in relation to other factors, the report noted: “Despite the highly capital intensive production and high labour costs, labour productivity is high enough to ensure that existing firms are relatively profitable. Profitability (profits over sales) was higher than in Poland, Lithuania, or Malaysia, but lower than in Brazil. At the firm level, profitability is associated with better performance – firms that are more productive and have lower costs will be more profitable than other firms. But at an economy level, high profitability can also suggest a lack of competition – when markets are competitive and entry is possible, profits will typically be competed away.”

When asked to identify the main obstacles to greater investment, four areas were identified by around a third of businesses: worker skills, macroeconomic instability, labour regulations and crime. Other areas were rated as being less significant.

“Enterprise managers were more likely to say that worker skills were a serious obstacle to their enterprises’ operations and growth than any other area of the investment climate...

“One notable piece of evidence is the high premium that firms appear to pay for skilled and educated workers... Another piece of evidence is that wages appear to be relatively higher for managers and skilled workers in South Africa than wages for unskilled workers are. The median monthly wage for an unskilled production worker in South Africa in 2002 was about $240 per month. In comparison, an unskilled worker in Poland earns about $250 per month and an unskilled worker in Brazil earns about $167 per month.. The median monthly wage for a manager in South Africa is about $1,850 per month – over twice as high as in Poland ($740 per month) and over three times as high as in Brazil ($540 per month). The earlier evidence suggesting that wages are high in South Africa appears to mainly be due to high wages for managers and professionals – not high wages at the bottom of the income distribution.”

The report found that despite the concerns about worker skills, relatively few enterprises had training programmes. According to the firms’ manager, between 70 and 80% of skilled workers in China, Poland and Brazil received training compared to fewer than half in South Africa. Interviews with firm employees suggested that training was even less common – more than 80% of workers in South Africa reported that they had not received any formal training.

Macroeconomic instability was rated as a serious obstacle to enterprise operations and growth by about 33% of South African firms, making it the second largest constraint. The report notes that this view might seem puzzling given that economic growth has been positive for over a decade and inflation has been modest.

This could be explained, the report suggests, by the instability of exchange rates, rather than instability within the broader macroeconomic environment. Between 2000 and 2002, the rand depreciated against most major currencies. It then appreciated rapidly over the next two years, especially against the US dollar.

On this issue, the report notes: “Consistent with the idea that exchange rate instability is driving the negative perceptions about the macroeconomic instability, exporters were far more concerned about it than non-exporters. Whereas 28 percent of non-exporters rated macroeconomic instability as a major or very severe problem, 44 percent of exporters did the same. Since many South African manufacturing firms appear to be price takers on international markets, changes in the exchange rate can have a serious impact on enterprise revenues. Moreover, close to three-quarters of exporters to the United States – the country whose currency against which the rand has been most unstable – saw macro instability as a major concern. These results strongly suggest that exchange rate instability is the main concern in the area of macroeconomic instability.”

Firms had few complaints about most other areas of the investment climate. Infrastructure, regulation, taxation, corruption and the court system were not seen as serious obstacles.

“Most firms believe that courts are able to enforce property rights and court cases appear to be resolved relatively quickly. Losses due to power outages are modest and the cost of power is low by international standards. Tax rates are low and have been declining over time. Although the burden of regulation is not particularly low, it is lower than in most countries in Africa and is comparable to most middle-income countries. Few firms report paying bribes to obtains services or win government contracts. In summary, the objective indicators are consistent with firm perceptions – on most other areas of the investment climate, South Africa appears to perform relatively well,” the report said.

Local government elections

An exercise of people’s power

The ANC is gearing up for the 2006 local government elections campaign, with the process of selecting candidates in its final stages, and the announcement this week that the ANC will formally launch its campaign on 8 January in Cape Town.

The ANC held its national list conference in Johannesburg this week to consolidate nominations for ward and proportional list candidates for the local government election due to take place on 1 March next year.

The list conference was the culmination of a process that began in ANC branches several months ago. Draft final lists will now be returned to ANC structures in all provinces, allowing for a process of appeals and objections, before being finalised in early January.

As this process is being finalised, the ANC will formally launch its local government election campaign at Athlone Stadium in Cape Town on Sunday 8 January. This national campaign launch will coincide with the celebration of the 94th anniversary of the ANC, marking its founding on 8 January 1912.

ANC President Thabo Mbeki will present the January 8th Statement of the ANC National Executive Committee, outlining the priorities and tasks for 2006. He will also unveil the ANC’s manifesto for the local government elections.

As has become an annual practice, there will be an award ceremony to recognise those ANC members and structures that excelled during the course of 2005. Top and upcoming artists will be performing as part of a cultural programme.

The timing of the launch is particularly significant, since the ANC’s local government manifesto forms an integral part of the movement’s broader programme to build a better life for all South Africans.

The elections provide an important opportunity to reflect on the progress made in building democracy at a local level and to respond to the challenges facing this important sphere of government. The ANC will respond to these tasks, guided by the principles, policies and values that have characterised the movement over the course of its 94 years.

Given the challenges faced by communities and local government, the identification of suitable candidates has, correctly, occupied the organisation for some time.

Through the list process, members of the ANC have selected those candidates who they consider best able to respond to the needs of communities. The selection process has taken place according to a set of criteria, both for the individuals nominated and for the overall composition of the lists.

Among other things, candidates must be ANC members in good standing with a proven track record of commitment to and involvement in the democratic movement. They should have the necessary experience or expertise that will enable them to make a constructive contribution in the relevant municipality.

Candidates should have no criminal record (excluding struggle-related crimes committed before April 1994). They must have no history of ill-discipline or corruption. They may not have been involved in fostering divisions and conflict in the democratic movement or have breached the ANC code of conduct and those of other organisations of the democratic movement.

As part of its efforts to improve the representation of women in all sectors of society, the ANC has taken a decision that there should be equal representation of women and men on all their candidate lists.

In broad terms, the ANC's list of candidates must be geographically representative, have a fair representation of all national groups, a fair spread across all age cohorts, and a fair number of people with disabilities or who are differently-abled. To ensure continuity and retain experience, the lists should have a reasonable balance of sitting councillors and new candidates. There also needs to be an adequate number and spread of skilled and experienced cadres to deal with governance challenges

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