National Assembly, Cape Town, 25 May 2005
Madame Speaker and Deputy Speaker
Deputy President of the Republic
Honourable leaders of our political parties and Honourable Members of Parliament
Ministers and Deputy Ministers
Directors General, Advisers and Senior Officials
Distinguished guests, friends and comrades
The Chief Whip of the Majority Party, the Hon Mbulelo Goniwe, has informed me that we have in the gallery a delegation from Cradock, the hometown of the outstanding patriot, the Rev James Calata. I am pleased to welcome them to the House and this debate. I hope that their presence in the National Assembly will help them to gain a better understanding of the important work done by the Honourable Members and inspire them actively to act with our National Parliament in future.
Today, May 25th, is Africa Day, which many of the peoples of our continent have marked for over four decades as a public holiday, to honour the establishment of the Organisation of African Unity (OAU) in 1963 and celebrate the African dream. I am therefore pleased to take advantage of this opportunity to convey our best wishes and a message of solidarity to our fellow Africans everywhere, including those in the Diaspora.
The establishment of the OAU 42 years ago constituted an important statement that the peoples of Africa share a common destiny. This inclusive intergovernmental institution was charged with the responsibility to promote the unity of our continent and lead us on the long road to the total liberation of Africa, and its successful development in conditions of peace, stability and democratic rule.
In this context, we would like to reiterate our thanks to the peoples of our continent for their unwavering support for our struggle to end the apartheid crime against humanity and achieve our liberation.
Once again, we would also like to thank our fellow African Heads of State and Government for giving us the honour to host the Founding Conference of the African Union (AU) during the year of the 90th Anniversary of the oldest liberation movement on our continent, the African National Congress (ANC).
Africa has charged the AU with the task to take the work of the OAU to a higher level. By linking its establishment in 2002 with the founding of the ANC nine decades earlier, Africa’s leaders made the statement that as our continent had united to realise its total liberation, so would it use this historic achievement to unite and address the challenges of peace, democracy, development and ending Africa’s marginalisation among the community of nations.
The holding of the Founding Conference of the AU in our country also underlined both that we share a common future with the rest of our continent, and that we have a responsibility to contribute whatever we can, towards the realisation of the new goals that Africa has set itself, as reflected in the Constitutive Act of the AU.
These goals constitute a directive to the contemporary African state. They underline the fact that the state is not an end in itself, but a social institution established to carry out various tasks. Our own Constitution also serves this purpose.
On the role of The Presidency and the Executive, this Constitution says, “The President is Head of State and head of the national executive ... The executive authority of the Republic is vested in the President. The President exercises the executive authority, together with the other members of the Cabinet by ... (among other things), developing and implementing national policy.”
Because of these constitutional provisions and the actual imperatives we face, we would like to dedicate this address on the Budget Vote of The Presidency to the issue of the role of the state in our process of reconstruction and development. We do this fully mindful of the need to maintain the necessary and dynamic balance between the state and the private sector.
Our presentation will include some reflections on what we have to do to position the state so that it contributes effectively to the realisation of the goals of building a winning nation, pushing back the frontiers of poverty and ensuring a better life for all.
The efforts of the Executive in this regard will be greatly enriched by such contributions as the Honourable Members and our National Legislature as a whole may make, both during the discussion of the Budget Vote of The Presidency, and afterwards.
The 17 May 2005 edition of the Financial Times, published eight days ago, carried an article discussing the issue of the role of the state, drawing on recent and current developments in Latin America. Among other things it said:
“The role of the state – which policymakers were trying to cut back for most of the 1990s – is undergoing a rethink ... There is now pressure for the state to play a bigger role ...
“There is a growing belief that the public sector should be strengthened and work in harness with the private sector. In its own study, the IMF concluded that ‘an improved and strategic role of the state is essential. Corruption and weak governance in Latin America have tended to undermine market activity, with the resulting burden falling heavily on the poor’.”
Most interestingly, the Financial Times quoted one of the principal architects of the so-called Washington Consensus, John Williamson, which had set the stage for the reduction of the role of the state, in favour of the market, as saying:
“I’m not an enthusiast for the minimum state. You can’t get away from the fact that it has to play a more active role, but I don’t see an alternative ideology.”
Recognising the critical importance of this issue, the World Bank devoted its 1997 World Development Report to the topic, “The State in a Changing World”. After discussing various developments up to that point, leading to a reduction of the role of the state, the World Bank said:
“Many have felt that the logical end point of all these reforms was a minimalist state. Such a state would do no harm, but neither could it do much good. The Report explains why this extreme view is at odds with the evidence of the world’s development success stories, be it the development of today’s industrial economies in the nineteenth century or the post war ‘miracles’ of East Asia. Far from supporting a minimalist approach to the state, these examples have shown that development requires an effective state, one that plays a catalytic, facilitating role, encouraging and complementing the activities of private businesses and individuals. Certainly, state-dominated development has failed. But so has stateless development – a message that comes through all too clearly in the agonies of people in collapsed states such as Liberia and Somalia. History has repeatedly shown that good government is not a luxury but a vital necessity. Without an effective state, sustainable development, both economic and social, is impossible.”
From the very beginning of the democratic order, we recognised the fact emphasised by the World Bank, that our “development requires an effective state” and that “without an effective state, sustainable development, both economic and social, (in our country) is impossible.”
Commenting on this issue on 30 June 1999, and speaking from this rostrum, we said that the poor in our country, the disempowered, require a strong state to redress the imbalance of power that derives from our history and the fact that we have a relatively well-developed capitalist system.
The "Financial Times" article to which we have referred said the burden arising from corruption and weak governance in Latin America has "(fallen) heavily on the poor." Similarly, we argued in 1999 that a minimal state in our case would further increase the burden of poverty and marginalisation already carried by the poor of our country.
Specifically we said, "Behind all the words we have quoted, is the fundamental idea that everything must be left to the great leveller, the market, which is driven by the notion that 'self regarding interest is predominant over social interest', as Jeremy Bentham put it.
"In our own specific situation, what this means is that those who are fittest to survive will survive. Those who are best abled will qualify on the basis of merit. Those whose race defined them as sub-human must now have no access to state support which state must, after all, retreat to allow those who have the means to survive and dominate, dominate."
Our development model therefore includes the fundamental proposition that we need a strong state to achieve the sustainable social and economic development to which the World Bank referred. This is as true of our country as it is of all other African countries and other developing nations.
Given the serious development challenges we confront, focused on ending poverty and underdevelopment and the racial and gender disparities in our country, as well as bridging the development gap between ourselves and the countries of the North, we have thought it necessary that we undertake a critical assessment of the organisation and capacity of our democratic state.
When we delivered the State of the Nation Address earlier this year, we announced that we had asked our Forum of Directors General (FOSAD) to carry out this work. As the Honourable Members are aware, earlier this month the Cabinet discussed the FOSAD Report at a meeting attended by Deputy Ministers, Premiers and the national and provincial Directors General, and asked FOSAD to do more work on this issue.
Reflecting the challenges we face, given our history and therefore the legacy that democratic South Africa inherited, our Constitution prescribes that the democratic state has to pursue such objectives as:
Necessarily, the review of the functioning of the democratic state must assess whether it is organised and has the capacity to carry out these tasks. Success in this regard is fundamental to the very stability and viability of the democratic state and is therefore being addressed by the FOSAD process as one of its most critical challenges.
Having achieved our liberation some time after the liberation of all African countries, with the exception of Western Sahara, we have the advantage that we can learn from our continent's experience, to understand the importance of respecting the constitutional goals we have listed, to ensure the stability and viability of our democratic state.
The passage from the Report of the World Bank, which we cited, mentioned the reality of failed states, such as Liberia and Somalia. This must focus our attention on the failure in these countries to address the centrifugal tensions that ultimately led to the seemingly irreconcilable conflicts that caused the collapse of these states.
Nothing that is happening or has happened in our country suggests that our new democracy is threatened by such an eventuality. Indeed, many at home and abroad have noted the remarkable national cohesion we have achieved despite our past and continuing reality of deep-seated racial, gender and socio-economic divisions.
However, this should not serve as cause for complacency. There are various matters that arise as part of our daily reality, which indicate the fault lines that can emerge and generate conflicts that we do not need.
I refer here to such issues as:
We can say with confidence that none of these instances present any immediate danger to our democracy. But they do reflect and seek to exploit the class and nationality fault lines we inherited from our past, which, if ever they took root, gaining genuine popular support, would pose a threat to the stability of democratic South Africa.
I mention all these to make the point that one of the tasks of the FOSAD process is to address the capacity of the democratic state to ensure our national and social cohesion, consistent with the prescriptions in our Constitution, and the fundamental task to build a democratic South Africa that belongs to all our people, united in their diversity.
In this regard, bearing in mind our involvement in the process of Africa's renewal, we must mention that it is clear that the peace and stability the peoples of Africa seek has to be based on the national and social cohesion we strive to guarantee for ourselves.
The absence or weakness of this cohesion gives an impetus to the centrifugal tendencies to which we have referred. Understandably, these will be stronger in the national states created by colonialism, and kept together in the past by the power of repression exercised by the colonial power, an experience shared by almost all the African states.
Africa's search for peace and stability, and therefore the creation of the necessary conditions for development, means that Africa and the AU should consciously confront this challenge. Our own support for Africa's process of renewal means that we must develop the skill and sensitivity to work with our sister African countries to achieve such social and national cohesion in all the countries of Africa.
The experience in many of the countries in which we are and have been involved directly confirms the correctness of these conclusions. Among others, this relates to the Comores, Burundi, the Democratic Republic of Congo, Côte d'Ivoire, and Sudan.
Our Constitution prescribes that our executive organs must both develop and implement policy. The capacity to implement policy is fundamentally dependent on the organisation and capacity of the public service in general. The FOSAD process is therefore assessing this centrally important part of the public sector, to make the appropriate proposals.
Our experience over the last eleven years in this context suggests that we have to attend to a number of issues that are critical to the strengthening of the developmental state we have been striving to build.
As in all other countries, we must proceed from the fact that the state is the largest social institution in any country. We must therefore expect that its capital, human resource, managerial, technological and organisational requirements will reflect the society from which it originates.
In addition, the process of globalisation imposes obligations on modern states, which, in the case of the developing world, represent imperatives imposed by the developed world that, in many instances, they have no capacity to meet, but which they have no power to repudiate.
Unfortunately, even the involuntary failure to implement what is decreed by the most powerful in the world includes the threat and the danger of sanctions against the 'defaulting' developing countries, with negative consequences for their development efforts aimed at realising even the most basic aspirations of their peoples.
Bearing all these considerations in mind, I would like to indicate a number of other issues that the FOSAD process is addressing.
It is clear that, as a developmental state, we must ensure that all the three spheres of our system of governance have the necessary professional, managerial and skilled personnel to enable the state machinery to discharge its developmental responsibilities.
The FOSAD process will therefore have to indicate the needs of the state in this regard, and propose what has to be done adequately to address this challenge. Necessarily, this must include some information of what we have in this regard, weighed against our current and future needs.
In this context, it is patently obvious that our greatest shortfalls are reflected in the local government sphere. Given the critical importance of this sphere of government, it is also important that we ensure that the other spheres of government function in a manner that helps to empower local government properly to discharge its responsibilities.
In this regard, all of us must give maximum support to "Project Consolidate", instituted by the Ministry and Department of Provincial and Local Government radically to improve the performance of our local governments and their capacity to achieve significantly improved local economic development and service delivery.
The challenges facing local government oblige us also to focus on managing the hierarchy of state power in a manner that ensures that our system of governance works optimally to achieve our policy objectives. We have to ensure that all our spheres of government honour the constitutional principle of cooperative governance, especially to meet our real and constitutionally defined socio-economic imperatives.
In reality, all our spheres of government share the same goals, as defined by our reality, our national policies and the objectives stated in our Constitution. However, the legal, conventional and procedural processes we have put in place might have resulted in processes that make it difficult for the various institutions of state to act together in a coordinated fashion, to achieve the common outcomes that all our spheres of government actually share.
The FOSAD process therefore has to assess what we need to do with regard to the organisation and functioning of the state machinery, to ensure that it operates as a seamless mechanism, capable of responding to the inclusive development and reconstruction challenges that are fundamental to the building of the new South Africa.
In this regard, while recognising the need to specialise, with reference to the different government departments and the spheres of government, we have to ensure that all our departments and echelons of government are able to, and actually act together in concert, to realise the common goals we all seek.
We have to ensure that we do not undermine our capacity to meet our national objectives by allowing the state institutions and personnel to remain imprisoned within unnecessary, restrictive and counter-productive silos of action, policy formation, and resource allocation.
Among other things, this means that we should strengthen the cluster system in terms of the functioning of the various government departments, build a truly effective system of inter-governmental relations, and create one unified public service covering all spheres of government.
Like many countries elsewhere in Africa and the world, we operate within the context of a mixed economy. It is described as such because it has both a private and a public sector.
In our case, the private sector remains the dominant part of our economy, despite the size and importance of the public sector, as represented by its ownership of productive assets, its capacity to provide economic services, and its regulatory obligations.
Nevertheless, the democratic state disposes of enough power to play a "catalytic and facilitating" role with regard to our economy. This includes creating and sustaining the conditions for the market, including private capital, to operate maximally, bearing in mind the social obligations that bear on the state.
In this regard, the state has a duty continuously to address the challenge of providing a better life for all. To address this objective, it must work to ensure that our economy grows and develops, enabling this economy to create the greater wealth we need to help us accomplish the goal of improving the living standards of all our people.
These issues are critical to the achievement of the objective stated in our Constitution to "improve the quality of life of all citizens", as well as the realisation of the socio-economic goals contained in our Bill of Rights and the subsequent decisions of the Constitutional Court.
It is therefore imperative that the FOSAD process addresses the challenge of the capacity and organisation of the state in this regard, including the capacity of local government to facilitate economic activity.
This review must include the impact of the regulatory activities of the democratic state, assessing whether they act as an incentive or disincentive in terms of encouraging healthy and required economic activity.
From the beginning of our democracy we recognised the importance of the concept and practice of social partnership to respond to our socio-economic challenges. This found expression in the establishment of NEDLAC.
The Job and Growth and Development Summits were organised by the social partners, giving practical expression to their determination to act together in concert.
However the follow-up to the decisions they took brought to the fore the need for us to ensure that government discharges its obligations to contribute to the effective functioning of our social partnership. The FOSAD process should therefore help us to achieve this objective.
Our Constitution places the Presidency at the apex of our system of governance. Among other things, it has the responsibility to "coordinate the functions of state departments and administrations".
This coordination is central to the effective functioning of government. The FOSAD process is therefore assessing whether the Presidency has the capacity and is organised in a manner that enables it to discharge its role of supervision and coordination.
The passage from the Report of the World Bank on the State in contemporary society said, "Without an effective state, sustainable development, both economic and social, is impossible."
The many and serious developmental challenges we face make it imperative that we too ensure that we have an effective state that lives up to its responsibilities to help build the kind of South Africa required by our Constitution.
What we will do in this regard should not only be of benefit to our people, but may make a positive contribution to the efforts of other African countries as they, like us, respond to the task of building effective states dedicated to serving the masses of the peoples of Africa.
I am honoured to commend the Budget Vote of The Presidency to the Honourable Members.
Thank you.