Issued by: African National Congress
SACOB Annual Banquet Address by Cyril Ramaphosa ANC Secretary General 28 May 1996
Ladies and Gentlemen,
As I make the transition from the 'business of politics' to the 'politics of business', it is perhaps appropriate that I stop to make a courtesy call on SACOB - the political face of South African business.
I describe SACOB thus because it is the institution, which for many politicians like myself, is the voice of business in South Africa.
The new constitution
The approval of the constitution by the Constitution Assembly was a high point in the history of South Africa's journey to democracy. It is no exaggeration to say that the 8th of May 1996 marked the beginning of a new era in the life of this country.
The constitution which was adopted is a remarkable document. Remarkable, not only for its content, but also for the extent to which the views and interests of ordinary South Africans are reflected in its provisions. It is a transformational document.
The new constitution lays the basis for a new society, governed by a new set of values and a new vision. Values that recognise and protect the basic inalienable rights of all South Africans. Rules which allow for the creation of a state which is accountable to the people, and responsible for their well-being. A vision which reduces the potential for conflict, and which maximises stability and cooperation.
The new constitution follows in the footsteps of the interim constitution, permanently entrenching many of its provisions, improving and elaborating on several others.
The process by which the new constitution was written was remarkable also. It set a new precedent in South Africa for the level of participation and breadth of consultation which went into its various chapters. The South African constitution-making process is being regarded in many parts of the globe as a model for successfully engaging popular participation in an effort of this magnitude.
I think we should acknowledge that the finalisation of the constitution was a great relief for many South Africans. For some of us, it meant that we could get some sleep at last. But for the rest of the country, it meant that there was certainty and confidence, where only days before there had been uncertainty and doubt.
Most importantly, the constitution-making process was open and transparent, completed on schedule and under budget. I sincerely hope that this achievement sets a trend for everything we do in this country. We need to set deadlines for ourselves, and then meet them - whether in government or outside government. The social partners in Nedlac would do well to take a leaf out of the Constitutional Assembly's book.
Constitutional provisions
Not everyone in this country is entirely happy with everything in the constitution. Political leaders - even some of those who were voting for the constitution - said as much in their speeches to the Constitutional Assembly. Yet this constitution is the best expression of our collective will as a nation which the hands of this country have been able to produce. As such, it is a valuable document which I am confident will serve our people for many years to come.
The finalisation of the constitution is a signal that the process of democratisation in this country is irreversible. Two years after the first democratic elections in South Africa, the new constitution provides confirmation that our country is bound to a path of reconciliation, democracy and development.
This constitution says to investors that the South African people have affirmed their commitment to a particular kind of society. A society in which there is respect for the rule of law within a constitutional state. A society in which the human potential of South Africa - neglected for so many years - will be realised. A society committed to economic growth and development. A society in which all citizens should enjoy the fruits of freedom.
More than merely just articulating the intentions of the South African people, this constitution creates the mechanisms whereby these intentions can be effected.
No one is under any illusion that this constitution can, on its own, achieve all these things. It is merely a blueprint for a better society - it will require labour, resources and time for our dream South Africa to become a reality.
It will require the commitment of all sections of our society - not least the commitment of government, labour and business. I believe that that commitment is there. It is there in Nedlac. It was there in the Constitutional Assembly. And I believe it is slowly developing within the workplaces of South Africa. But it needs to gather momentum.
The last few years have witnessed extensive efforts towards establishing consensus among political parties, labour, business and other sectors around the kind of shape South Africa should take, politically, economically and socially.
We have not reached absolute consensus. Nor do I think we will ever reach total agreement on all matters. However, I do believe that we are capable of reaching a sufficient level of consensus to make this country work - and to make it work well.
This constitution is one of the most important milestones in our search for consensus. It represents a level of agreement among all sectors of society which has never before been seen in this country. It represents a level of agreement which says to the world that South Africa is one nation, not just on the rugby field but in the hearts and minds of all South Africans.
It is this agreement - this national consensus - which is perhaps the greatest incentive to business and investors in this country. It is a signal that, whatever differences still remain, we are at one about the fundamentals. And that is good for business.
Constitutional issues
In addition to these fundamentals, there are a number of provisions in the constitution which bode well for business in this country and for the development of the economy.
The media has paid a great deal of attention to the provisions in the constitution which proved most difficult to negotiate - lock-out, education, property and language. What has not been commented on is the overall commitment to a vigorous and open democracy it reflects. One of the main functions - if not the main functions - of a modern constitution is to ensure that the enormous concentrations of power found in a modern society are controlled. Our constitution contains numerous mechanisms to ensure this.
Chief among these is the acceptance of the principle of cooperative governance. Some people have charged that the principle of cooperative governance is little more than a piece of subterfuge to entrench the power of central government to the disadvantage of provinces.
This charge is unfounded, and, I suspect, has more to do with party political manoevering than with the principles at stake. Indeed, the new constitution - far from denuding provinces of their power - establishes and entrenches the provincial tier of government as a crucial component of governance, and even gives provinces certain exclusive powers.
The value of co-operative governance is that it gives proper consideration to the regional diversity of South African society, while protecting against fragmentation and inter-provincial conflict. It offers a practical and rational mechanism for distributing competencies between different levels of power, and maintains a sensible balance between the interests of individual provinces and the country as a whole.
Co-operative governance, the National Council of Provinces and the division of competencies between national and provincial government, together lend themselves to greater national coherence, inter-governmental coordination and long-term stability.
Also significant in terms of national coherence is the clause in the constitution on the South African Reserve Bank. While protecting the independence and integrity of the bank, the requirement that the bank consult on a regular basis with the Minister of Finance encourages greater cooperation between the bank and government in their approach to economic and monetary matters.
The events in the money market over the last couple of weeks have demonstrated quite effectively, I think, the value of such a coordinated approach.
The Reserve Bank clause in the constitution has got the basics right. It is, correctly I think, a statement of basic principles. How those principles are translated into future legislation will be important for how business, and society more broadly, regard the bank.
From a business perspective, the property and lock-out clauses were contentious issues. Many people are still not pleased with the compromise formulations. I am confident, however, that many of the fears and concerns around these two issues will dissipate as the effects of the final provisions are seen in practice.
The Property clause was from the outset a difficult issue, particularly given South Africa's history. How does one guarantee property rights in a society in which the vast majority of the people have had their right to property systematically denied them since 1913? Whose right to land do you honour - the person who bought it at a fraction of its market value 50 years ago, or the person who had been forcibly removed from it after having occupied it for generations?
How do you balance the twin imperatives of redress and land reform on the one hand, and current and future security, on the other? That is the question we had to answer. And I think that after much negotiation and deliberation, the property clause in the constitution answers that dilemma quite ably.
The new constitution ensures that no South African may ever again be arbitrarily deprived of property. It recognises both the importance of the right to property and the need to redress the past. It provides both security and fair and equitable means of achieving redress.
I do not believe the property clause in the constitution, nor in fact the exclusion of the 'lock-out' clause, unfairly prejudice any section of South African society.
The Democratic Party and Business South Africa have announced their intention to challenge the constitutionality of the manner in which the lock-out issue has been handled. The matter now lies with the Constitutional Court to deliver a judgement. I hope that all parties respect and abide by the court's decision.
The economy
Apart from the finalisation of the constitution-making process and the positive effect that has on political and social stability, there are other encouraging signs for the future of the South African economy.
And I'm not so conceited that I would count my move into the private sector as one of those signs.
Rather, there are a number of more substantial factors which inform my positive outlook on the future of the South African economy.
Obviously, the political changes in this country have made so many things possible which in the past seemed simply beyond the reach of South Africans. The change that South Africa has undergone over the last two years - and the change which is continuing to take place - is the single most important element contributing to a favourable economic outlook.
The approach which the Government of National Unity adopted from the outset bolstered the achievements of the first democratic elections. At the core of government policy is the Reconstruction and Development Programme, a strategy to re-orientate the structures, process and resources of government towards meeting the basic needs of all South Africa's people; to developing our country's human resources to their full potential; and seeing sustainable growth in the economy. It is a bold programme which will fundamentally change the way the government relates to ordinary people - and the way ordinary people determine the priorities of government.
The steady improvement in the economy over the last two years - the growth rate, the business confidence index and the drop in inflation - is a sign of the potential that exists in this country.
For this country to prosper - and for the benefits of prosperity to be felt by all - we need to develop an economic strategy which is forged through the cooperation of all stakeholders in the economy. We need to use structures like Nedlac to develop a new approach to resolving common problems in the interests of everyone involved. We need to accept the potential benefit to the economy of involving workers more fundamentally in decision-making, not only at a national level - through Nedlac - but at a shopfloor level - through workplace forums. We nee to pursue more progressive labour practices - to empower and enable workers - so that we can use the human resources of this country far more effectively.
This is not only the responsibility of government and communities. South Africa needs a commitment from business. A commitment to build the nation; to assist in the economic empowerment of the majority of South Africans; to implement sound and effective affirmative action programmes; and to assist in job creation.
Just as in the past, when business was able to stand together and speak as one voice against apartheid and government repression, so too is it now critical that business once again adopts a pro-active stance on the issues of social development. Unless business puts its full weight behind the new South Africa - unless there is substantial private sector investment in reconstruction and development - there is little hope that our young democracy will survive, and there is little hope for our economy to achieve the heights it is capable of.
Impediments
Just as much as there is a solid foundation for economic development in South Africa, there are several impediments.
Our relatively recent return to the international community - coupled with the increasing globalisation of the world's economies - leaves us at a distinct disadvantage, particularly with regard to our ability to compete with other countries.
Our experience in this country is confirmed by the latest competitiveness ranking by the International Institute of Management Development which places South Africa 44th out of the 46 countries listed.
This is compounded by our failure to develop to any adequate level this country's human resources. For decades the workforce of this country has been viewed as a resource merely to be exploited. No-on has had the foresight to see our workforce as a national asset which needs to be invested in and nourished.
In today's Business Day, Wendy Luhabe notes that historic patterns of low investment in the development of people in South Africa, remains a key barrier to making South Africa a competitive and productive nation.
"Our educational institutions, from kindergartens to universities, must have an economic focus," she says.
We need to invest substantially in human resource development. This investment should take many forms - from school feeding schemes, to free compulsory basic education, to investing more in vocational training. We need to address people's access to sport, recreation and cultural facilities. We need a living environment which ensures that the potential which people have is not squandered.
Business and labour
We need also to develop a new approach to the relationship between business and labour in this country. As we approach the 21st century, we need to develop a new paradigm for business and labour.
We have emerged from an era in which there was a paradigm of confrontation. This new era we are entering requires that we throw off the blinders that have led to and sustained a system of conflict.
Conflict management in itself will never be enough to create the kind of growth that South Africa requires to be able to fulfil its destiny towards the 21st century.
We need to seek win-win, not win-lose, solutions to our problems. We need to encourage participation, consultation and respect.
We need to orient our interaction, as business and labour, towards the objectives of increased productivity, greater competitiveness, realisation of our human potential and a new sense of economic and social community.
Job creation
There is consensus that this country needs substantial economic growth. But we must avoid going for 'growth at all costs'. While pursuing economic growth, we must seized with the responsibility of creating jobs. Employment creation remains the central objective of any macro-economic policy.
We have had profits and growth in this country without jobs being created. The track record of the South African economy in job creation over the last two years, even in a climate of 3 per cent growth, has been somewhat less than satisfactory.
What creates greater concern is that there does not seem to be any sense of urgency among business leaders, and even political leaders, in this country. South Africa will be facing a social and economic crisis very shortly if we do not pay serious attention to plans for job creation.
The government, for its part, has to create the environment within which jobs are created. This includes a focus on export-led growth, which requires a stable real exchange rate environment. The currency depreciation which has just taken place, if properly dealt with, will create an enabling environment for the export sector. To capture the gains from this depreciation will require a review of tariff reduction.
The economy also requires a restructuring of state assets. It is a policy position of the ANC that the government should consider a reduction of the public sector in areas where such a move would increase efficiency, promote affirmative action and empower the historically disadvantaged, while protecting the consumer and safeguarding the jobs of workers.
In restructuring state assets, measures need to be introduced to improve corporate governance - to implement a dividend policy and tax enterprises. The government needs to privatise those companies that don't belong in state hands. Restructuring should include the option of bringing in strategic equity partnerships, to, among other things, encourage the introduction of new technology and increased foreign investment.
We need also to expand the base of people who have the capacity to conduct business in this country. Small, medium and micro enterprise development is one obvious area of expansion. It is a sector which has enormous capacity for job and wealth creation. Organised business, government and non-governmental organisations have a collective responsibility to support programmes which provide capacity to SMMEs.
Violence and crime
Violence and crime remain major obstacles to securing greater investment in our economy, and a hindrance to vibrant business activity. The government's National Crime Prevention Strategy must be welcomed as an important movement in the right direction.
It adopts a holistic and, I think, quite realistic approach to the causes and modes of violence, and quite correctly draws on all government resources in addressing them. This strategy will need the assistance of communities, business and other sectors in society if it is to be at all successful. Efforts like the Business Initiative against Crime need to be continued and broadened.
We are in a bit of a chicken and an egg situation: At the root of crime in this country is staggering unemployment and widespread poverty. Without effectively addressing poverty, we'll never be rid of crime. Yet the very thing that is crucial for alleviating poverty - substantial economic growth and development - is being hindered by crime.
All that we can do is to address both priorities with equal urgency, and in an integrated and holistic manner.
The future
I would not be moving into the private sector if I did not feel that there was a bright future for the South African economy. There is much work to be done, and, together with yourselves, I am looking forward to being part of the effort to make South Africa a prosperous nation.
The struggle that lies ahead is not merely the purchase of white interests by black interests, it is to ensure that the economy of South Africa grows and in doing so benefits all of the nation's people.
The struggle for democracy in South Africa is not over. It will continue until each South African can read and write; until each child has adequate health care; until each South African has a home; and every adult employed - and even then we'll have to struggle to maintain it.
That struggle will take place in parliament, on the shopfloor, in the boardroom - but unlike the struggles of the past, it will not be a struggle we wage against each other. It will be a struggle which we will wage together, and I sincerely believe, it is a struggle which we will wage effectively.
Thank you