ANC Today ---------------------------------------------------------------------- Volume 5, No. 19, 13-19 May 2005 ---------------------------------------------------------------------- THIS WEEK: * Letter from the President: Viva South Africa! Viva Africa! * Haiti: Campaign for the return of democracy to Haiti ---------------------------------------------------------------------- LETTER FROM THE PRESIDENT Viva South Africa! Viva Africa! This month of May, on the 6th and 7th, we spent just over 30 hours in Rome and Venice in Italy. During this short period we were privileged to meet His Holiness Pope Benedict XVI at the Vatican, as well as the President and the Prime Minister of Italy, HE Carlo Azeglio Ciampi and HE Silvio Berlusconi respectively. In Venice we addressed and interacted with a group of just over 50 leading European corporate CEOs who had convened in an annual summit conference hosted by the global financial institution, Morgan Stanley. Accordingly, the visit to Italy gave us an opportunity to interact with religious, political and business leaders whose decisions and actions impact on all humanity, including our country and continent. In this regard, we must express our sincere thanks for the warmth, friendship and spirit of solidarity with which we were received everywhere we went. Naturally, in all our interactions, we spoke about the challenges, the needs and hopes of our people and those of the peoples of the rest of our continent. We talked about Africa's pursuit of an equitable partnership with the developed world, convinced that it is in the material interest of the developed countries themselves to help create an Africa free of war, poverty and underdevelopment. I believe we would be correct to draw the conclusion from our discussions in Italy and the Vatican that there is a general and genuine appreciation of the fact that the reality of increasing global interdependence means that no country, however fortunate its circumstances, can be indifferent to the fate of other countries. Borrowing words from John Donne, we can say that many leaders across the globe have come to understand that "no country is an island, entire of itself". In this context we should also say that our discussions in the Holy See and Italy confirmed that Africa is very much "on the radar screens" of the leaders we met. Very encouraging in this regard was the fact that these leaders viewed Africa not as "the hopeless continent", but, while understanding our challenges, seemed to be inspired by the hope that at last our continent has embarked on its journey towards a better future. In this regard, it was very inspiring for our delegation to experience the extent to which many of Europe's senior corporate CEOs appreciate the progress we have made during our years of liberation, towards the creation of a humane South African society. We came to understand that because of this, these CEOs would not be easily persuaded to accept the negative propaganda about our country that some, including some South Africans, still appear determined to communicate to the rest of the world. Reporting on this mood, Ms Beth Mandel, Managing Director of Morgan Stanley in South Africa, said of our interaction with the CEOs in Venice: "It could not have gone better." The newspaper that reported Ms Mandel's comments, (the 'Cape Times'), stated that, "Mandel said that apart from a question about the capacity of South African officials to implement black economic empowerment, the CEOs of some of Europe's major corporations were completely satisfied with Mbeki's explanation of the government's economic and political policies. "The usually-contentious issues of Aids, Zimbabwe and crime had been dealt with satisfactorily by a South African CEO at the conference, so that Mbeki himself did not need to, she said. He had said that the South African government was dealing with these issues as well as it could, but that the perception was different. "Mandel said that Mbeki had dealt so well with the deracialisation issue in his opening remarks, that no one felt the need to ask questions. She said the CEOs had accepted the principle of black economic empowerment but raised a concern about the capacity of government officials to manage the implementation of the policy. "Some companies were experiencing problems in getting officials to explain the details of how to comply with the policy. She said Mbeki had acknowledged that the government was suffering capacity constraints not only in this field but in general." The 'Cape Times' went on to report as follows: "I would not be surprised if investments flowed from this (interaction in Venice),' (Ms Mandel) said, adding that there had been some discussions between some CEOs and Mbeki's officials about specific investments." I am happy to support Ms Mandel's comments in this regard. Indeed, having repudiated the effort to chase them away from our country by frightening them with all manner of negative messages, the European CEOs seemed determined to discover such opportunities as South Africa might offer for them to do business in our country. This does not mean that these CEOs are not aware of the problems and challenges our country faces. However, they understand that they can make an important contribution to the solution of these problems, while honouring their obligation to operate as responsible leaders of their companies. They are ready to be part of the exciting project of creating the new South Africa. They do not want to wait in the wings until others have succeeded to eradicate the legacy of a protracted period of colonialism and apartheid. They see no contradiction between running successful businesses in our country, on one hand, and contributing to the building of a peaceful, non-racial, non- sexist, prosperous and democratic South Africa, on the other. They recognise and accept the synergy between these social and business objectives. One of the principal lessons we learnt from our interactions with the religious, political and business leaders we met in Italy and the Vatican was that the changing perceptions about our country and continent have created the space for us to take the lead in terms of deciding what we want to make of our future. The enhanced respect for our right to determine our future imposes an obligation on us as Africans indeed to take responsibility for our destiny. The peoples of the rest of the world expect that we will inform them what we expect of them when we speak of entering into an equitable and mutually beneficial partnership with them. In the meantime, responding to what we have already said and done, and reflecting the spirit so generously conveyed by the European CEOs in Venice, major international corporations have taken and implemented decisions that cannot but communicate a message of hope to millions who were previously condemned by historical circumstance to expect perpetual despair. Among others, I refer here to the decisions and actions relating to our country taken by the well-known corporations, Barclays Bank and General Motors. Four days before this edition of ANC TODAY went to press, Barclays Bank plc announced that "the Board of Directors of (the South African bank) ABSA has voted unanimously to recommend the acquisition (of up to 60 percent) of ABSA to shareholders. The South African Minister of Finance has approved Barclays ' application to acquire a majority stake in ABSA. The offer has been endorsed by Batho Bonke, ABSA's (black) empowerment partner." Correctly describing this as "the largest ever Foreign Direct Investment in South Africa", Barclays announced that the transaction amounted to R33 billion, which translates into £2.9 billion or US$5.5 billion. John Varley, Group Chief Executive of Barclays plc, went on to say: "This transaction accelerates our strategy to internationalise Barclays earnings and increase exposure to selected high-growth, well run markets. South Africa is a dynamic economy with great growth potential...Absa has a track record of supporting the South African Government's policies to tackle economic and social disadvantage. It fits well with our own businesses in Africa and gives us the opportunity to generate synergies and to deploy our global product skills..." Steve Booysen, Chief Executive of ABSA said: "This transaction represents an acknowledgement of Absa and South Africa's achievements over the past decade...Our customers will have access to the best of Barclays, the global skills and scale of one of the top ten banks in the world...By working with Barclays, we accelerate the achievement of our strategic intent to build the leading banking business in the new South Africa and, ultimately, on the African continent. It will provide a positive impetus for the continued development of South Africa and the wider continent." Some time before the conclusion of this important venture by one of the top ten banks in the world, the leading global automobile manufacturer, General Motors (GM), had made an important announcement relating to its operations in our country. It said that General Motors South Africa had been awarded an R18 billion or US$3 billion contract to assemble and export the new GM Hummer H3 vehicle to markets in Europe, Asia Pacific, the Middle East and Africa. This vehicle, the "Humvee", will be assembled at the GM plant in Port Elizabeth/Nelson Mandela Metro. Significantly, this will be first time that this vehicle is produced outside the USA, with the Port Elizabeth plant being the only GM facility outside the US contracted to produce the Hummer H3. When the announcement about the Port Elizabeth contract was made, Ms Maureen Kempston Darkes, General Motors Group Vice President and President of GM Latin America, Africa and the Middle East, said: "The H3 exported from South Africa has the size and features to expand the appeal of the Hummer brand to an international audience, including right hand drive and full global homologation...The assembly of Hummer H3 in South Africa is another important step for Hummer in becoming a truly global premium brand." Robert Socia, President and Managing Director of General Motors South Africa, called the announcement of the Port Elizabeth export programme a significant achievement for the company. He said he was confident that the South African operation would be able to meet the requirements of the export programme. The decisions taken by Barclays Bank and General Motors constitute an inspiring and unequivocal vote of confidence in democratic South Africa. This is particularly significant given that both these major corporations had, during the years of extreme apartheid repression, disinvested from our country. By this means, consistent with popular opinion in their countries of origin and the demands of our movement and people at the time, they deliberately chose to contribute to the defeat of the apartheid system by imposing economic sanctions against apartheid South Africa. They have now returned in strength to make their contribution to the successful development of a new and free South Africa that belongs to all who live in it. In practical action they are also making the statement that they are ready and willing to accompany us as we contribute whatever we can to the success of the African renaissance. Their actions, involving the deployment of substantial financial, technological and other resources in our country and continent, confirm the willingness of many corporations around the world to be part of the solution to Africa's problems, and not part of the problem. These actions communicate the message that the dignified passion demonstrated by the Morgan Stanley and other CEOs in Venice to be part of the solution to our problems was not mere theatre, given substance only by the requirement that we, the theatre audience, the children of paradise, should suspend our disbelief, to enable us to enjoy the theatrical spectacle. Those among our people and movement who were engaged in struggle against apartheid during the difficult years when Barclays Bank and General Motors withdrew from apartheid South Africa will not have forgotten the impetus their actions gave to the global effort to end a crime against humanity. Today, these patriots and the rest of our people have a task to form a new partnership with these and other corporations, and with the peoples of the world at whose behest they acted, to respond to the new task to give birth to a new and humane South African and African society. MAY DAY PART II In last week's Letter from the President, we cited the assessment of the International Institute for Labour Studies of the impact of the Irish social partnership initiated in 1987, responding to the then Irish socio-economic crisis. Describing that crisis, the Institute had said: "Government debt and deficit were skyrocketing, investments were stagnant, and, undeterred by emigration, unemployment was on the rise." These circumstances, which could not but result in a destructive social and economic national crisis, persuaded the Irish government, employers and trade unions that they were confronted by a crisis that necessitated a united national response. They decided that the only way each would be able to address its concerns would be if they entered into a partnership inspired by a negotiated balance between partisan interests, on one hand, and the collective, national interest, on the other. Fifteen years after the initiation of the social compact, the International Institute for Labour Studies could conclude that, "From an economic point of view, the Irish social partnership has been a big success. In fact, it is held to have substantially contributed to the Irish economic miracle of the last few years by greatly increasing the competitiveness of the Irish exposed sectors in international markets." As South Africans, we understand the concept of social partnership described by the International Institute for Labour Studies very well. In our case, it found its most outstanding expression in the political sphere. This led to the historic compromise that resulted in the victory of the democratic revolution in 1994. In this instance, the different racial, social and political forces in our country came to the conclusion that the only way they would be able to advance their interests would be to enter into partnership with one another, on the basis of a proper balance between particular partisan interests, on one hand, and the collective, national interest, on the other. However, the issues we discussed in our Letter last week had to do with the economy, not politics. Since our comments were inspired by the fact that the workers of the world, including our own, had just celebrated May Day, we focused in particular on issues relevant to employment, or the labour market. Our country has fully accepted the fact that one of the most critical challenges our country faces is radically to reduce the level of unemployment by creating a large number of sustainable jobs, sufficient to absorb both those currently looking for work and the new entrants into the labour market. Nobody disputes the importance of this task. However, as many of us have correctly argued the centrality of this task, we have also produced an unintended consequence. That consequence has been that we have communicated the wrong message that the negative job situation represents an economy that is in deep crisis. In many instances, the particular negative relating to the issue of jobs has been generalised to suggest that the economy as a whole is pointed in the wrong direction, demanding that, among other things, we undertake a comprehensive revision of our economic policies. In this context, demands have been made that we should make an about-turn with regard to our macro-economic policy. Arguments have been advanced that we have no "industrial policy" to speak of. Assertions have been made that we are imprisoned within a wrong "growth path". And all of this has essentially been based on a particular presentation concerning the issue of job retention and job creation. In other words, with reference to the paradigm of simple logic, a specific progression from the particular to the general has sought to present a general picture that is putatively consistent with the particular, but is, in fact, inconsistent with the overall general reality. Because of this, in our Letter last week we posed a number of questions which we said required a common response, which, in turn, would result in a shared understanding of the national tasks we face. Contrary to what is regularly communicated about our economy, drawn from a particular presentation about the job situation, our economy does not face the kind of crisis that obliged the Irish social partners to agree to enter into a cooperative Programme for National Recovery. We are not confronted by skyrocketing government debt and budget deficits, stagnant investments, and unmitigated job losses. We are not trapped in a crisis that is destined to worsen, resulting in the reduction of the national wealth and increased impoverishment. Nevertheless we continue to face many serious socio-economic challenges. Unemployment is one of these, as well as the prevalence of low skills among many of our working people. High levels of poverty are another. Gross racial and gender disparities in the distribution of wealth, income and opportunity is yet another. We have a responsibility to address all these challenges seriously and in a sustained manner, as part of our pursuit of the goal of a better life for all. This requires that we understand as accurately as possible not only what we need to achieve, but also the means at our disposal to realise whatever objectives we set ourselves. This means that precisely because we are determined to solve the unemployment problem, as we must, we have to understand the nature of this phenomenon, the setting within which it occurs, and the possibilities we have to solve it. It was for this reason that in our Letter last week we said our social partners need to answer a number of questions together, which we mentioned. This would ensure that they share a common understanding of the challenges we face, as did the Irish social partners when they entered into their 1987 and subsequent agreements. In turn this would make it possible for them to agree what they should do severally and collectively, as did the Irish social partners. We will now present some elements of the South African economy as a contribution to an objective understanding of the material base we need to draw from, to address the serious challenge of reducing the serious levels of unemployment and poverty in our country. Generally available public information communicates very positive economic facts about our country that inspire envy in many other countries. According to this information, for instance: Our budget deficit has remained at below 3% for seven consecutive years. The national debt has fallen from 48% of GDP in 1997 to something like 37% in 2003/4. Among other things, this means that the government has more resources to spend on the fight against unemployment and poverty. This is because the lower budget deficits and national debt levels mean that less government revenues have to be spent servicing the debt that would result from borrowing money to finance higher budget deficits, which borrowing would increase the national debt. In this regard, and perhaps as an aside, here we would like to quote what Karl Marx said about budget deficits and the national debt in his major work, "Das Kapital". We refer to this because opposition to our government's successful efforts to reduce the high budget deficits and the rising national debt we inherited from the apartheid years came from people who described themselves as belonging to "the left". Marx wrote: "The system of public credit, ie. of national debts...took possession of Europe generally during the manufacturing period. The colonial system with its maritime trade and commercial wars served as a forcing house for it...The public debt becomes one of the most powerful levers of primitive accumulation. As with the stroke of an enchanter's wand, it endows barren money with the power of breeding and thus turns it into capital...The only part of the so-called national wealth that actually enters into the collective possession of peoples is - their national debt...The great part that the public debt, and the fiscal system corresponding with it, has played in the capitalisation of wealth and the expropriation of the masses, has led many writers...to seek in this, incorrectly, the fundamental cause of the misery of the modern peoples." It was to avoid imposing an intolerable national debt on the people, forced to diminish their share of national wealth by instituting mechanisms to expropriate the masses to service this debt, that our government implemented measures to reduce the budget deficit and thus reduce the national debt. Our government's and people's success in this regard is one of the positive features of our economy. For 19 consecutive months, we have kept the inflation rate within the targeted 3-6% range. This means that at the same time as we have reduced the weight of the burden of the national debt that would inevitably fall on the shoulders (or pockets) of the masses, we have also avoided the erosion of the purchasing power of the wages and salaries of these masses that would result from high rates of inflation. This is yet another positive feature of our economy. For the first time in over 30 years, our country has been experiencing sustained increases in fixed investment year after year. In its May Day 2005 edition, the 'Sunday Times' reported that, "Last year fixed-investment spending rose by a massive 9.4% year-on-year, in real terms, after growing by 9.0% in 2003." This means that with each passing year, we have been increasing our capacity to produce more wealth, to increase the wealth of nations, the national wealth, that Adam Smith and Karl Marx wrote about. We have therefore been expanding the material base that we need to be able to generate the greater wealth we need, and thus create the conditions for us to achieve new advances in the continuing struggle against poverty and unemployment. This is yet another positive feature of our economy. We would like to mention some random facts that illustrate this increased effort to expand the wealth of the nation. From 2007, Toyota South Africa will export more than 60,000 bakkies and sport utility vehicles to Europe. This expanded export programme, made possible by increased investment, has already created 900 new jobs at Toyota 's Durban plant, and would also have had a beneficial impact on the 78 local component manufacturers who supply the Toyota plant. Beginning this year, South African Breweries Ltd will invest R5 billion in our economy during the next five years. Among other things, this will result in increasing the number or expanding the operations of black economic empowerment (BEE) suppliers, who fall within the small and medium business sector. During 2004, SAB spent over R700 million on 1,500 BEE suppliers, representing a 21% increase over the previous year. This will also have had a positive impact on job creation. During 2004, cement sales increased by 17.4% compared to 2003. This was because of increased infrastructure, mining, office and residential construction. As a result of the higher levels of investment in real estate, cement producer PPC is considering increasing its production capacity by 1 million tons. The other large cement producers, Holcim and Lafarge, are considering bringing their expansion programmes forward. Of importance from the employment perspective, small and medium companies were the greatest beneficiaries of the higher rates of growth in the construction sector. At the end of April, the media reported on the outcome of a study on employment trends that had been carried out by the economist, Mike Schussler. One newspaper entitled its report of this study "SA adding 10,000 jobs per month". At the end of last month, 'Creamer Media' reported that "South Africa has been a net creator of jobs for the past three years". It quoted Mike Schussler as saying, "South Africa turned the corner and began creating jobs in 2002 after a steady decline...I think jobs are being created because of lower interest rates and because of the macroeconomic policies that have been put in place by (Finance Minister) Trevor Manuel. They are paying off now." 'Creamer Media' went on to say: "Interest rates have been slashed by 6.5% points since June 2003...bringing the prime lending rate to its lowest level in over two decades. South Africa's economy expanded by 3.7% in 2004, its fastest rate since 2000, and the government expects growth of at least 4.0% per year over the next three years - which may also bode well for job creation going forward." The lowest interest rates in more than 20 years, the significantly higher growth rate, and net job creation all underline the highly positive performance of our economy, consistent with the other developments we have already mentioned. All these facts demonstrate that the negative reality with regard to unemployment does not mean that our economy is moving in a negative direction. In this regard, to find one another and build the foundation for complementary actions, it is important that our social partners should develop the common understanding that whatever their exclusive interests and problems, at least our economy is performing at relatively high levels it has not achieved for some decades. This should enable them to arrive at the common conclusion that they share a common interest to encourage this development and take it to even higher levels. The 'Creamer Media' report we have cited says: "The official unemployment rate stands at 26.2% ­- though an expanded definition to include people who have not looked for work over a four-week period raises the rate to almost 42%... Labour participation in South Africa is under 40%, a disturbing trend pointing to deep structural problems including a huge pool of unskilled labour." This is consistent with the normal presentation of the employment picture with which all of us are familiar. It is this picture that is used, perhaps unintentionally, to convey a false image of an economy in crisis. In the next and last part of this extended Letter, next week, we will deal with this matter, relating to the "official unemployment rate" and the "expanded definition" as well as some other matters. We will argue that despite the challenge of unemployment we continue to face, the developments in our economy indicate that the workers who attended the May Day rallies were correct to celebrate this important national public holiday in a spirit of hope and confidence that our democratic revolution will succeed to create a better life for all. In this regard, the question all our social partners will have to answer honestly is what they have to do individually and together that will demonstrate that the workers were right to celebrate Workers' Day in a spirit of hope and confidence. Thabo Mbeki ---------------------------------------------------------------------- HAITI Campaign for the return of democracy to Haiti South Africans are called on to join the people of Haiti, and others around the world, in campaigning for the return of stability, the rule of law and democracy to the Caribbean state. Haiti has been in a state of crisis since an armed rebellion forced democratically-elected president Jean-Bertrand Aristide out of office and into exile in February last year. Despite the deployment of a United Nations 'stabilisation mission', there has been widespread violence and instability since the overthrow of Haiti's constitutional government. Members of the Aristide government, members of parliament, and members and supporters of Aristide's Lavalas party have been arrested and are being held without formal changes. It is estimated there are currently more than 1,000 political prisoners being held illegally in Haiti's jails. Many thousands were forced into exile, and many are in hiding. This situation has been highlighted by the grave condition of Haiti's last constitutional prime minister Yvon Neptune, who has been on a hunger strike in a Haitian prison since mid-April. Reported to be gravely ill, Neptune has been in prison since June last year without having been brought to court -despite a constitutional requirement of a hearing within 48 hours of arrest. Neptune turned himself over to police after hearing a radio announcement of a warrant for his arrest relating to an alleged 'massacre' near the coastal city of St. Marc weeks before Aristide was ousted. Neptune is insisting that he be charged or released, amid reports that the interim government is trying to force him to leave the country. A human rights investigation conducted in Haiti in November last year under the auspices of the Center for the Study of Human Rights at the University of Miami School of Law found that life for the impoverished majority "is becoming more violent and more inhuman as the months pass since the elected government's removal". "After ten months under an interim government backed by the United States, Canada, and France and but­tressed by a United Nations force, Haiti's people churn inside a hurricane of violence. Gunfire crackles, once bustling streets are abandoned to cadavers, and whole neighbourhoods are cut off from the outside world. Night­marish fear now accompanies Haiti's poorest in their struggle to survive in destitution. Gangs, police, irregular soldiers, and even UN peacekeepers bring fear. There has been no investment in dialogue to end the violence. "Haiti's security and justice institutions fuel the cycle of violence. Summary executions are a police tactic, and even well-meaning officers treat poor neighborhoods seeking a democratic voice as enemy territory where they must kill or be killed. Haiti's brutal and disbanded army has returned to join the fray. Suspected dissidents fill the prisons, their constitutional rights ignored. As voices for non-violent change are silenced by arrest, assas­sination, or fear, violent defense becomes a credible option. Mounting evidence suggests that members of Haiti's elite...pay gangs to kill Lavalas supporters and finance the illegal army." Since becoming the world first independent black republic in 1804 following a successful slave rebellion, Haiti has suffered almost two centuries of foreign interference, brutal misrule, military coups, underdevelopment and poverty. For almost three decades, the country was ruled by the Duvalier dynasty, a period characterised by corruption, human rights abuses and the increasing impoverishment of the majority. Following the fall of Jean Claude 'Baby Doc' Duvalier in 1986, and a succession of military governments, Jean-Bertrand Aristide was elected president in December 1990. Within seven months of taking office he was overthrown in a military coup, and was only returned to office in 1994 after a UN-authorised military intervention. In November 2000, Aristide was re-elected president of Haiti, and inaugurated the following February. Yet, despite the disbandment of the Haitian military, armed opposition to the constitutional order continued. Alongside a sustained anti-Aristide campaign in the international - and particularly US - media, and a well-funded opposition movement, armed opposition groups and proxy 'street gangs' waged an increasingly overt campaign of terror against the Haitian poor. Former paramilitary leaders, some of whom had been convicted of past human rights violations, emerged as the leaders of the armed opposition forces. This violence escalated in the months before the 200th anniversary of Haitian independence, on 1 January 2004, and set the scene for the removal of Haiti's constitutional government barely two months later. As the situation of Haiti's poor worsens daily, South Africans are called upon to join others around the world in campaigning for a return to constitutionality, stability and political freedom in Haiti. The United Nations needs to lead an international effort, with the involvement of regional bodies like the Caribbean Community (CARICOM), to ensure the unelected interim government ends the political persecution of Lavalas members and supporters, releases all political prisoners, ends all illegal arrests and summary executions, and ensures the disarmament of all illegally armed groups and indivuals. As an immediate step, the interim government must either formally charge or release Yvon Neptune and other political prisoners. The constitutional order must be restored, which should include the creation of conditions for the return of all exiles, including President Aristide, and the organisation of free, peaceful and fair democratic elections. Urgent steps need to be taken to end the brutalisation of Haiti's population and open the way for a meaningful national dialogue towards the restoration of the country's constitutional order. Yet this cannot happen while the remnants of Haiti's military past are allowed by the international community to continue with their programme to silence the voices of the Haitian people. ---------------------------------------------------------------------- This issue of ANC Today is available from the ANC web site at: http://www.anc.org.za/ancdocs/anctoday/2005/at19.htm To receive ANC Today free of charge by e-mail each week go to: http://www.anc.org.za/ancdocs/anctoday/subscribe.html To unsubscribe yourself from the ANC Today mailing list go to: http://lists.anc.org.za/mailman/listinfo/anctoday