Address at the Annual Conference of the Black Management Forum on the Impact of political leadership transition on the economic landscape by the UDM President at the Sandton Convention Centre, Johannesburg (16 October 2008)

Ladies and Gentlemen,

Thank you for the opportunity to interact with you today; I’m honoured to address this forum that has a track record of fighting for disadvantaged communities. This forum is composed of many people who fought for a free South Africa. It is also expected from this forum to play an influential role in the economic policies of the country for the betterment of the disadvantaged communities. You draw your membership from both the urban and rural communities.

There is no doubt that through your campaigns there have been improvements on some of the issues that you have been promoting. Indeed, some of you have benefited from Government’s realigned policies with regards to the awarding of tenders, consultancy and outsourced services.

The topic of today is: The impact of political leadership transition on the economic landscape. What a relevant topic!

As people who are dealing with economic investment and always looking at forward-planning, this topic is relevant to yourselves, in particular for those who thought they were doing well under the outgoing Government. Equally so for those of you who didn’t benefit from the same Government, who are now pondering and asking: “Will I be included this time in either baking the cake, or sharing it?”

One thing is certain, on this topic of political leadership transition: there has been a great deal of uncertainty and uneasiness, no matter what the ANC says to the contrary.

Perhaps had the new ANC leadership asked advice from me directly after Polokwane – I would have told them to avoid uncertainty and anxiety after their successful coup. As a person who had successfully executed two coups in succession, I would have told them not to adopt half-baked measures. They should have immediately made the changes they intended and removed the people they wanted to. If they had done so, we wouldn’t have the uncertainty and uneasiness we witness today.

By now we know that the country didn’t benefit in the past nine months, instead the ANC turned inward in order to ferret out the so-called ‘undesirables’. Nor is there any evidence that they invested effort on unity and reviewing the policies of the outgoing Government.

This new ANC leadership wasted a lot of energy in campaigning for a post to accommodate Mr Motlante in the Executive, others wanted the President to be recalled, whilst the former President was perceived as being intransigent on implementing Polokwane resolutions, until that controversial judgement by Judge Nicholson.

In the minutes and hours after Judge Nicholson’s judgement a fever seemed to grip certain Tripartite Alliance leaders, whilst other leaders simply put their heads in the sand and allowed the war-talk and mentality of vengeance to be plastered all over the news. All of that culminated in the recall of President Mbeki.

In my interaction with South Africans from all spheres, not least of all with influential people in business, I have heard time and again in the past month how people are disturbed by the manner in which the President of the country was recalled.

We must not fool ourselves, despite what the ANC says, there will be dramatic policy shifts. One of the reasons for the Polokwane outcomes was because there was deep unhappiness with the policies and performance of the Mbeki Government. They presided over the so-called jobless growth, and I’m sure many of the delegates at Polokwane were unemployed graduates who have been loitering in the streets. Hence, the desire for policy change as demonstrated by the ANC’s first order of business after Polokwane, namely the destruction of the Scorpions. The power of the Treasury in budgets and policy had also been questioned in the last couple of months and it would be foolish to think that no major changes are going to take place if the new ANC steps into Government after the 2009 polls.

As a result of these matters a sense of disquiet has filled many people during the course of this year. Business people especially are aware that political leadership and policy uncertainty has an extremely negative impact on the economic environment. What uncertainty does, is to drive away foreign investors, whilst making domestic investors hesitant. Thus local businesses adopt a wait-and-see approach, where they argue that it is more prudent to wait until after the next elections before committing to large expenditure investments. Naturally this type of behaviour has a negative impact on the economy.

This uncertainty has also been driven by the Tripartite Alliance’s threats against the judiciary and the threats to purge the NPA, and the campaign by them to withdraw the charges against Mr Zuma. The ANC, as ruling party, is currently the custodian of our Constitution and this unconstitutional behaviour fuels uncertainty.

The uncertainty continues to this day – the ANC’s split is well-documented. However the jury is still out on how much such a split will affect the status quo.

Meanwhile there are many economic matters that require our urgent attention. Business people will know that job creation remains a massive challenge. You will also be aware that in the past few years not enough has been done to expand the economic cake so that there is a bigger slice for everybody. Too much time has gone into redistributing the current wealth, instead of creating new wealth.

Looking at the themes of your conference it seems that you are open to suggestions on how to build South Africa’s economy. The UDM’s position on this is as follows:

 The UDM believes that the achievement of real freedom for all can only be gained through massive socio-economic delivery.
 Our point of departure is that this massive socio-economic delivery can only be achieved by a Government that is willing to invest in its own economy and people.

This is a philosophy that says: GOVERNMENT MUST DO MORE.

It stands in stark contrast with the thinking of other parties that hold the view that Government must do less and everyone else must do more.

Our economy suffers from jobless growth due to the confusion created by an ambivalent Tripartite Alliance (ANC, Cosatu & SACP) government. This ruling clique preaches elimination of unemployment in the streets and legislate retrenchments and greater unemployment in Parliament.

The harsh reality is that we are suffering from:
 a 25% - 42% rate of unemployment
 the economy is unable to create jobs
 Economic growth is too slow to absorb new entrants into the labour market.

Many South Africans are suspicious and mistrust Government because of perceptions that Government is not equitably distributing the resources of the country.

We must remember that there has been no consensus on a macro-economic policy that can transform the economy in a manner that could create and spread wealth wider and improve the lot of disadvantaged majority. There have been concerns about the inadequacies and contradictions of the fiscal and industrial policies.

Because South Africans deserve to have an input in how the economy is run and how job creation is pursued, the UDM proposes the establishment of a Presidential Council on Planned Sustainable Development representing all stakeholders in society, not just Government, Business and Labour only.
 This Council will afford broader society the opportunity to advise a UDM Government on issues related to the economy, infrastructure development and job creation.
 We envisage a similar structure which delivered political solution for our country prior to 1994 i.e.: CODESA

High on the agenda of such a structure would be to review our economic performance and perhaps emerge with consensus on how to remedy the inherent defects in it. UDM policies recognizes that South Africa is a developing country that is still reeling from the backlogs and imbalances of the past.

It is for that reason that the UDM is calling for a Marshall Plan to resuscitate the economy, but focussing on infrastructure development that will also improve service delivery. Such a targeted government-led investment drive will focus on services such as water, roads, irrigation and electricity in a labour intensive manner. In that way we are also creating jobs, whilst we are addressing the service delivery concerns of the people. Such a Marshall Plan must also invest in the people of this country, with a view to enhancing the skills available to the economy. A Government, especially one in a Developing Country, that proposes anything less, does not care about its people, and is not willing to accept responsibility for their welfare and prosperity.

None of these things imply that Government on its own can solve our economic challenges, or that Government must nationalise everything and ditch the free market system. What it actually means is that Government has a democratic duty to intervene and ensure that the failures and imbalances in our society – and the world at large – are not replicated by the free market. Therefore profoundly free markets like the United States and Europe have democratic governments who intervene in their economies to the tune of trillions of dollars to ensure that their domestic businesses and jobs are protected. In the past two weeks we have seen these self-same Governments entering the free market and flooding it with hundreds of billions of dollars in order to rescue banks that are going under.

In conclusion, I would urge you to consult with all political parties and canvass views and proposals on economic matters because this forum has a pivotal role to play in the economic development of our country.

You also have a duty to support multi-party democracy in this country. It was indeed gratifying to see some of you pledging millions to the ruling party recently; one individual even donated R10 million. It shows that you have arrived as influential members in our society. One hopes that such contributions will not be limited to the ruling party, so that we encourage multi-party democracy as opposed to a one-party state. In order to level the playing field, it is also necessary to regulate party funding and stop the current secrecy. Otherwise we run the danger of state tenders going to political donators and selling democracy to the highest bidder.

Some of the uncertainty about the political transition will be addressed at next year’s election, where we will establish who is the real bull in the kraal. Let the voters have the final word – it is certain that the political landscape will never be same. The winner will be the improvement of service delivery, including those issues that you in the business community have been complaining about for many years.

I thank you.

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