Address by President Nelson Mandela at the World Economic Development Congress

24 September 1993

Distinguished delegates,
Ladies and Gentlemen.

I would like to thank the organisers of this important Congress most sincerely for giving us the possibility to participate in its work and to meet and share views with its distinguished participants.

I would also like to extend to you our sincere appreciation for the interest in and concern for our country which you have demonstrated and continue to sustain.

After all, we are human beings first. Therefore all of us could not but be moved to action when confronted by a political and socio-economic system as inhuman and offensive to all norms of decency as the apartheid is and has been.

That common action against apartheid by the peoples of the world, including yourselves, has brought us to the point where it was possible for us earlier today at the United Nations in New York, to call on the international community to lift all existing economic sanctions against South Africa.

I am pleased and honoured that so soon after that meeting, I have the opportunity to address the same appeal to this eminent Congress.

We appeal to you, who are important players in the world economy, to seize this historic moment of the lifting of economic sanctions against South Africa, to look afresh at our country in terms of investment, trade and other economic opportunities.

We will return to this point but would, in the meantime, like to assure you of the firm commitment of the ANC in ensuring investor confidence in South Africa and creating the conditions that would make her attractive to all investors, both domestic and foreign.

We look forward to building a new partnership with you which will benefit both yourselves and our people. We believe the call to lift all economic sanctions says to us all that the moment to build that partnership is now.

The economic sanctions that were imposed as a peaceful measure to secure the end of apartheid system, have brought us to the point where the necessary decisions have now been taken regarding the transition of South Africa from apartheid to a non-racial democracy.

The first truly general elections in our country will take place on April 27th, 1994.

The process has also started of constituting the statutory bodies, including a governmental Transitional Executive Council and an Independent Election Commission, which will organise and conduct the elections and ensure that the conditions exist for these elections to be free and fair.

It is true that there are some among our compatriots who are still determined to resist the inevitable, not least of all by resorting to violence, hoping to create such fear and instability as would make a negotiated settlement impossible.

It is also true that this violence has claimed and continue to claim many lives. It remains a problem we have to solve as a matter of the greatest urgency, both to save human lives and property and to ensure the success of the peaceful transition to a democratic society.

I would however like to take this opportunity to assure you that despite the unacceptably high levels of this violence, it is not true that the country as a whole is engulfed in an escalating maelstrom of so-called black-on-black violence.

The reality is that there is no political violence over the greater part of our country.

The most pernicious violence that we experience is conducted by organised elements who are intent on blocking progress to a just society.

This is not violence that is, as is sometimes said, inevitable in a society in transition. Nor is it a reflection of ethnic feuds which are assumed to be characteristic of African societies.

The violence we are experiencing is planned and orchestrated for the definite purpose of producing the greatest amount of fear, insecurity and instability. It is executed in such a manner that it promotes this objective, to discourage and stall the advance to democracy.

We are convinced that it will be possible to take new measures to address this scourge once the multi-party Transitional Executive Council and a new National Peace Keeping Force become operational.

We speak on this matter at some length because the media tends to give a very distorted picture of what is happening in South Africa, underestimates the importance of the structures I have just mentioned and may not fully appreciate the decisive impact that the transition to democracy will itself make in terms of creating the conditions for peace in our society.

We are fully cognisant of the importance of peace and stability to help the investor confidence of which we have spoken. For this reason and for the sake of life itself, we will leave no stone unturned in the struggle to ensure that both political and criminal violence are addressed effectively.

No longer should you and ourselves be subjected daily to the horrifying newspaper and television pictures of bodies lying dead in the streets of our towns and cities.

In our situation, there can be no gainsaying the fact of the intimate relationship between the twin processes of political and economic transformation. Both impact on and reinforce each other.

We are determined to ensure that we do indeed create the political order in South Africa which has been agreed by the majority of the political formations involved in the negotiations - namely, a united, democratic, non-racial and non-sexist country.

This will be a political system characterised by the supremacy of the constitution, to guard against arbitrary rule, a multi-party system, the protection of human rights through the adoption of an entrenched and justiciable Bill of Rights, an independent and representative judiciary and the rule of law.

Furthermore, throughout the process of negotiations we have been guided by the principle that, given especially the fact that we inherit an apartheid society, we should seek a solution in which all the people of our country would be winners.

We have avoided any situation in which some would be losers and others winners. What all of us have had to defeat is the system of apartheid, acting in concert to craft a political settlement that will ensure the victory of democracy.

It is for these reasons that we have agreed with the majority of our interlocutors that after the elections of April 27th next year, all the significant political parties that will be elected to the National Assembly should come together in an Interim Government of National Unity to ensure the smoothest possible transition to a settled democratic order and to ensure that no section of our population feels threatened by this change.

Despite everything we have said, it is also true that there are some in our country who evidently became so captured by the ethnic and racial "solutions" of the apartheid system, that they cannot break out of this particular mould, which has led our country into the morass from which we are trying to break out which even the National Party, the architect of this system, now seeks to repudiate.

We would appreciate any contribution you can make to persuade these that you cannot replace a failed ethnically- and racially-based system by building the new reality with the same ethnic and racial blocks which have led our country and people to division, conflict and violence.

We ourselves continue to do our best to engage these forces, to seek an acceptable accommodation with them and to persuade them to continue the dialogue with all other political formations in the country so that their concerns can be addressed around the negotiating table.

The political settlement we are striving to achieve should create the conditions of peace and stability without which economic growth and development would not be possible.

And yet it is also clear that unless we successfully address the questions of economic growth, development and an equitable distribution of opportunity, wealth and income, to end the wide-spread poverty and the racial disparities imposed on our country by the system of apartheid, it will be difficult to guarantee the stability of the democratic settlement.

We are faced with an economy that is in decline. For a considerable period of time now, it has, inter alia, had to contend with declining rates of capital formation, large exports of capital, a continuing reliance on the export of raw material and precious metals, a low and declining capacity to absorb new entrants into the labour market, low levels of productivity, high inflation levels and the diversion of a significant part of the gross national product into the recurrent government expenditure.

Much of this has happened precisely because of apartheid. The transition to a democratic society gives us the opportunity and possibility to address these and other matters, to reverse the economic decline, modernise and restructure the South African economy, make it internationally competitive and enable it to serve the needs of the South African population at large.

We are, of course, not promising that miracles will occur overnight.

We are however convinced that our economy has the underlying strength and the country the infrastructure which will enable us to achieve the objectives we have just stated within a reasonable period of time.

Among the objectives that have to be achieved are that:

public and private sector investment as a proportion of the Gross Domestic Product must increase substantially;

private sector investment in manufacturing, as opposed to other sectors of the economy, should also increase substantially;

manufacturing industry should also be transformed away from import substitution to produce more for export at internationally competitive prices;

the levels of productivity should be increased substantially through a variety of measures related to education and training;

there should be an increase in the aggregate labour/capital ratio to ensure a higher absorption of labour by the formal sector of the economy and a reduction of the intolerably high levels of unemployment that afflict millions of our people today;

various measures will have to be adopted to expand the domestic market to enhance the domestic demand-pull element in the economic revival; and,

serious efforts will have to be made to ensure that the public sector does not absorb disproportionately high levels of national savings and that the public debt is reduced and held at reasonably low levels.

Sooner or later negotiations will have to start, hopefully resulting in our preferential access to the European Community, the North American and the Japanese markets.

This is of especial importance given that 60 per cent of our Gross Domestic Product derives from our exports and imports.

With regard to this preferential access, I would also like to make the observation that as a result of a statistical fiction, South Africa is not classified as a developing country.

The GATT has offered the slightly better classification of an "economy in transition". The real problems we have to deal with are, for the overwhelming majority of the population, those that are faced by peoples in other developing countries.

We will continue to press this matter, not out of selfishness, but because of the reality of the problems that our country faces.

The lifting of economic sanctions will also lead to the normalisation of our relations with the international financial institutions such as the IMF, the World Bank and the African Development Bank.

As I am sure you will understand, we are determined to handle our economic affairs in such a way that any support and assistance that accrues from these important institutions does not impact negatively on our national sovereignty or on our capacity to address the imperative task of addressing the inequalities that we inherit from the system of apartheid.

We are ready, in the context of the Transitional Executive Council, to enter into substantive discussions with the international financial institutions and are both pleased and encouraged by their own willingness to enter into this process.

As part of the process of the normalisation of relations with the rest of the world, we have also been party to negotiations concerning the rescheduling of the debt caught in the standstill imposed by the Botha regime in 1985.

We have been keen that this matter should be resolved without delay and to the mutual satisfaction. We are keen that our country can meet its debt obligations.

The agreement we sought was one that would be sympathetic to the fact that the democratic government that will be elected next year will be confronted with enormous economic challenges.

Among these would be the generation of sufficient foreign exchange to help sustain any upturn in terms especially of creating new production capacity in the country.

We would like to think that between ourselves and those of you in this Congress who are bankers, there will be a shared interest in ensuring that the South African economy develops as quickly as possible to be able to service the existing debt and absorb new loans without this imposing such debt servicing obligations that it cannot grow.

Clearly, the South African economy cannot sustain the levels of net capital exports that it has had to contend with for some time and would deeply appreciate any contribution by the banks to help us address this problem.

We are also conscious of the fact that, as South Africans, we have to attend to the considerable seepage of capital from our country which results from the resort by some domestic investors to questionable business practices in the conduct of their international dealings.

As a token of our commitment to normalise our economic relations with the rest of the world, we are working with the present government of South Africa and other important players to negotiate an agreement on our tariffs in the context of the Uruguay Round.

We have not engaged in any special pleading but would like this to be taken into account that we are not only an economy in transition, but also a dual economy, with only a minority of the population involved in the sector that can survive the immediate implementation of trade liberalisation policies.

We believe that, by any standards, the Southern African region constitutes an economic zone of enormous potential and which should interest all business people capable of participating in the international economy.

For obvious reasons, South Africa is and will be an important player in this geo-economic area. We are convinced that we can play an important role with regard to economic reconstruction and development in this area, not in search of domination, but in context of balanced regional development and cooperation.

But unlike the developed regions of the world, such as the EC, NAFTA and the Pacific rim, there is no country in the region of Southern Africa with sufficient resources to play the role that other developed countries have played in the formation and growth of regional economic entities.

This is a challenge that the peoples of our region will have to deal with together. But what we would hope for is that you, who can lend us support by your involvement in the economies of Southern Africa, will see it as necessary and in your interest to seek such involvement to strengthen a region which can inspire an African economic revival and, thereby, contribute to the revival and development of the world economy and peace among the peoples.

Let me end by saying that we are acutely conscious of the fact that the whole world is competing for limited investment capital.

In this regard, we are determined to ensure that the new South Africa is as attractive to the international investor as any other country.

We are therefore ready to address such matters as the security of investments, repatriation of profits and dividends, competitive rates of taxation and stable and predictable public policies.

We are however certain that, as possible or actual corporate citizens of the new South Africa, you are sensitive to the challenge that, together, we have to dismantle the system of apartheid not only in politics but also in the economy.

This requires that, again together, we address such issues as black economic empowerment, fair labour practices and socially responsible investment, including the protection of the environment.

I would like to take this opportunity to invite everybody present here to visit us in South Africa so that we can continue our dialogue and arrive at the point where we do indeed build the partnership I have spoken of, a partnership that will add to the common struggle to build the world economy and thereby create the conditions for prosperity for all and peace, stability and democracy for the peoples of the world.

We are, after all, part of the same world economy. Poverty in one country impacts on the other. Prosperity and stability in one continent in the end can never survive unless others share in those common human imperatives. There is no such thing as a successful business venture while it is surrounded by an inferno of social unrest that is driven by poverty and deprivation.

The transformations taking place in South and southern Africa provide us all with the opportunity to join hands in a mutually beneficial effort to regenerate the development of this region and thereby reinforce the development processes that are taking place in the countries and regions which you, the distinguished participants at this Congress, represent.

Thank you for your kind attention.

Source: Nelson Mandela Foundation