speech - FW de Klerk Foundation

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4 • “state ownership, including more strategic use of existing state-‐owned companies, as well as strategic nationalization, where deemed appropriate on the balance of evidence”; • greater state involvement in mining, falling short of outright nationalization; • the utilization by government of the assets of insurance and pension funds for state developmental projects; and • accelerated land reform that o “must represent a radical and rapid break from the past, without significantly disrupting agricultural production and food security”; o would abandon the principle of “willing buyer, willing seller”; o would down-‐grade private property rights to freehold “with limited extent”; and that would o prohibit foreigners “as a principle” from owning land. The other ideology that has contributed to the present crisis is the Marxism-‐Leninism of the SACP and Cosatu. It is one of the main causes of unemployment and of our failure to attract the foreign investment that we need for sustained economic growth: • South Africa has the worst labour relations in the world. According to the World Economic Forum’s Global Competitiveness Report it is the worst of 144 countries assessed in terms of co-‐operation in labour-‐employer relations; • Cosatu has continuously raised labour costs without commensurate productivity increases -‐ which has inevitably resulted in job losses. South Africa’s flexibility of wage determination is the fourth worst in the world. • Our labour legislation is amongst the most onerous anywhere. South Africa’s hiring and firing practices are the second worst in the world. • Cosatu’s campaign to abolish labour brokers would lead to the loss of more than half a million jobs. • Cosatu has steadfastly opposed proposals to open labour markets to the unemployed -‐ including proposals at the ANC’s 2005 National General Council for a two-‐tier labour system and more recent proposals for a youth employment subsidy. • It is destroying jobs by alienating foreign and domestic investors through its confrontational stance and open support for nationalisation. On top of all this came the Marikana massacre of 16 August; the subsequent wave of violent and uncontrolled wildcat strikes; and hopelessly unrealistic wage demands. The Farlam Commission will no doubt inform us in January of all the circumstances relating to the incident. However, enough information has already been made available to raise the most serious possible questions regarding the behaviour of the police. All this has negative implications for present and future foreign investment. According to the UN Conference for Trade and Development, foreign direct investment in South Africa has fallen by 43.6% in the past year -‐ the largest decline among all developing economies. South Africa is dependent on foreign investment, not only for growth, but also to cover our large current account deficit.
5 On 27 September Moody’s downgraded South Africa’s sovereign credit rating from A3 to Baa1. Moody’s referred to policy uncertainty ahead of the ANC National Conference in December and noted that, “The revision reflects Moody’s view of the South African authorities’ reduced capacity to handle the current political and economic situation and to implement effective strategies that could place the economy on a path to faster and more inclusive growth.” This, unfortunately, is where we find ourselves at the end of October 2012. A rising tide of corruption, ineptitude, cadre deployment and inappropriate ideology has inundated much of the state sector and is threatening economic growth and jobs. • Most of our schools have been drowned by this tide of dysfunctionality -‐ leaving millions of failed school children floundering, out of their depth and with little or no chance of reaching the shore. • Eskom, the SABC and South African Airways have been engulfed by mismanagement and incompetence. • Black Economic Empowerment is used to enrich a small politically-‐connected elite rather than to promote real equality; • Billions of rands are channeled to poorly qualified tenderpreneurs; • Government department after government department, municipality after municipality and parastatal after parastatal fail to achieve acceptable audits; • The rising tide is lapping at the foundations of those departments and municipalities that continue to function. Throughout the sector some embattled public servants are attempting to stem the flood by shoring up dykes and building coffer dams. But they have an increasingly impossible task. Substantial areas of high ground continue to stand proud above the deluge. They include the Treasury, the Supreme Court of Appeal, the Constitutional Court, the Public Protector, the Western Cape and the City of Cape Town. They also include great swathes of the private sector, our banks, our farmers, our mines and service industries that continue to perform with excellence. Ironically, and perhaps predictably, these are the very institutions that would be targeted by the ANC’s all-‐encompassing developmental state. Everyone -‐ except the Government -‐ agrees that we are facing the most critical challenges since 1994. Thabo Mbeki, Fikile Mbalula, Russel Loubser, Mamphela Ramphele, and many others have all raised their voices in alarm. Which brings us to the road to 2020. The progress we make along that road will be determined by a number of factors including • the decisions that the ANC will take at its National Conference in December;
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speech - FW de Klerk Foundation

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