Item 1095 - Statement by Nelson Mandela President of the African National Congress to the Frankel Max Pollak Vinderine Investment Conference Carlton Centre : Frankel Max Pollak Vinderine Investment Conference

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ZA COM MR-S-1095


Statement by Nelson Mandela President of the African National Congress to the Frankel Max Pollak Vinderine Investment Conference Carlton Centre : Frankel Max Pollak Vinderine Investment Conference


  • 1992-02-17 (Creation)

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Transcription of speech made by Mr Mandela

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(18 July 1918-5 December 2013)

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Migrated from the Nelson Mandela Speeches Database (Sep-2018).

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Frankel Max Pollack Vinderine Investment Conference

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  • English

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Chairperson, ladies and gentlemen,
I would like to express my gratitude, and that of the African National Congress, for this invitation to share with you some of our considerations on the role investment can play in the post- apartheid democratic South African economy.

After apartheid, investment will be one of the key factors that decides whether we move along the path toward democracy, justice and peace, or lurch back into the valley of death. Without adequate and appropriate investment, we will not be able to create jobs or expand the wealth of the country. We will not have the funds to remedy the wrongs of apartheid. And let us be very clear: unless we remedy those wrongs, we cannot hope for stable economic development or for lasting peace.

Right now, we face an investment crisis. Over the past ten years, fixed investment has fallen to perilously low levels. In some sectors of the economy, our capital stock is significantly smaller than it was in the early '80s. The percentage of our gross domestic product devoted to investment in new capital stock is far too low. The economy has begun to roll backwards.

But the problem is not only low investment. When investment has taken place, it has neither met the needs of the majority of South Africans nor brought about dynamic growth and rising productivity. Under apartheid, investment created an enclave of prosperity that left out most of our people, who remained homeless, unskilled and all too often unemployed.

Today, World Bank figures show that South Africa lags far behind its much poorer neighbours in terms of life expectancy, infant mortality, levels of education and virtually all other indicators of quality of life. Meanwhile, unemployment runs around 40 per cent.

If investment continues in the pattern of the past, it cannot address these ills. Investment has historically been inappropriately capital-intensive, dependent on imports, and generally biased toward provision of goods and services in white areas. To this day, two thirds of all new houses are built for whites - a segment of the population not noticeably suffering from homelessness. If we do not transform existing investment trends, the economy would have to grow at least 20 per cent a year to make a dent in unemployment.

The fundamental cause of this multi-faceted investment crisis has been mismanagement by the apartheid regime. In turn, the investment crisis has meant a stagnant, inequitable and conflict- ridden economy, in turn weakening business confidence and generating capital flight. As South Africans, we must work together to break this vicious cycle.

We believe that the most important elements for a favourable economic climate include strong and growing domestic and regional markets; political stability; transparent and consistent economic policies; and the prospect of steady economic growth and profits. A well-trained, flexible and productive workforce is also critical in today's increasingly sophisticated international climate.

Low productivity represents an important symptom, as well as a cause, of the investment crisis. Too much of our economy
relies on obsolete technologies. Even more important, thoroughly inadequate investment in education leaves us lagging far behind our competitors. For every thousand workers, we have perhaps a tenth as many skilled people as other countries with a similar level of production. Finally, as long as most workers feel they do not benefit from economic growth, they cannot be expected to work hard to sustain it. To change that perception, we have to empower the black majority by transforming, not only the political system, but also management practices and business relations.

It is more and more obvious that the establishment of a democratic state represents the first step toward solving the investment crisis. Minority rule has shown that it cannot ensure the political and social climate required for economic stability and growth. That way lies only a continued, disastrous cycle of revolt and repression. The only possible way out of our economic quagmire, then, is the creation of a legitimate government.

The first way you can help us solve the investment crisis, then, is to put your full weight behind a rapid transition to a democratic state. Whether at national or local level, we need the support of business to bring about a democratic, efficient system of government that is acceptable to the majority of South Africans. This political solution is a necessary precondition for an attractive investment climate.

Unfortunately; one of our few instruments for hastening the political transition remains sanctions on the economy. We realise that sanctions cause a lot of headaches for business. But we cannot hope for a real solution to our economic crisis unless political changes come about quickly. Of course, if business throws itself behind the struggle for a democratic South Africa, a political transition and an end to sanctions and the associated uncertainty will come sooner rather than later.

But a democratic state only gives us a first step. We must also find policies that, while allowing the greatest possible space for personal freedom and initiative, create a more equitable and dynamic economy. Finding those policies presents us with a great challenge.

In the process of revamping our economy, we must create a system that the majority perceives as functioning in their interests. A paternalistic approach will not work. Rather, the political arena. Inevitably, its undemocratic decisions have caused costly conflicts. We need only refer to the VAT strike and our own position on foreign borrowing to underline the high price that we as a nation paid for the state's refusal to consult.

As a second step to solving the investment crisis, then, we must begin to set up consultative structures at a local, regional and national level that can begin to suggest policy solutions to our economic problems. Again, we need your help in finding appropriate democratic forms that can start to function even before the establishment of an interim government.

Finally, even before appropriate policies are in place, business can directly address the problems plaguing our economy. You can find ways to create jobs. You can avoid discriminatory practices in the workplace, which certainly hinder productivity growth. You can encourage training and education through apprenticeships, training schemes, bursaries and donations to educational institutions. You can foster the development of our communities, for instance by developing ways to extend credit for black businesses or housing.

In short, business can begin now to work closely with trade unions and community representatives to build a better South Africa for all of us. These activities will provide a firm basis for broader social cooperation under a democratic government.

Like any period of rapid change, the present situation brings both great risks and great opportunities. We must all work together to minimise the dangers to the economy - dangers that stem from an over-long transition, from the disempowerment of the majority, from reckless economic policies adopted without consultation. All of us can then hope to benefit from the opportunities inherent in stimulating and restructuring our economy.

For investors, the opening up of new markets at home and overseas and the chance to forge a new and productive relationship with workers and their communities should prove particularly rewarding. We look forward to the chance to cooperate with yourselves and the other major economic actors in developing policies that will ensure a brighter future for us all.

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Acquisition method: Hardcopy ; Source: ANC Archives, Office of the ANC President, Nelson Mandela Papers, University of Fort Hare. Accessioned on 12/01/2010 by Zintle Bambata




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