Business Networking Breakfast Friday 22nd February 2013 TOPIC: Securing Democracy, Securing Business – A Prosperous South Africa for All! SPEAKER: Marius Fransman Please attached list of delegates.

         


Marius Fransman – the South African Deputy Minister of International Relations and Co-operation and the Chairperson of the African National Congress in the Western Cape province.

 

 

 

Address by Deputy Minister Marius Fransman at the Ubuntu Business Breakfast in Cape Town on, 22 February 2013, on the theme: Securing Democracy, Securing Business- Building a prosperous South Africa For All.

Programme Director;

Members of diplomatic corps;

CEO of Ubuntu Foundation, Mr Chaplain;

Members of Business Community;

Members of the Media;

Distinguished Guests;

Ladies and Gentlemen;

First and foremost I would like to express my sincere appreciation to, Mr Chaplain, for extending an invitation to me to speak at this important gathering of South Africans from different backgrounds, who are passionate about the development of our country. It is indeed an honour to be counted amongst the great speakers who spoke in your previous events. Most important, I would like to acknowledge the excellent work that the Ubuntu Foundation is doing in this country.

Owing to the untold and despicable history of our country, initiatives such as those you have embarked upon in this Foundation are necessary, since they enable us to interconnect with one another as one and united people in the spirit of Ubuntu, hence the talk of a rainbow nation. Such initiatives compliment the government endeavors of building a united, non-racial, no-sexist and prosperous South Africa. They also reaffirmed our popular mantra that ‘together we can make it and do more.”

Programme Director, one of South Africa’s illustrious sons, Archbishop Desmond Tutu, has the following to say about Ubuntu and I quote:

“One of the sayings in our country is Ubuntu – the essence of being human. Ubuntu speaks particularly about the fact that you can't exist as a human being in isolation. It speaks about our interconnectedness. You can't be human all by yourself, and when you have this quality – Ubuntu – you are known for your generosity. We think of ourselves far too frequently as just individuals, separated from one another, whereas you are connected and what you do affects the whole World. When you do well, it spreads out; it is for the whole of humanity”.

 

Unquote

The power and essence of Ubuntu philosophy was also noted and recognized by the USA human rights champion Rev. Dr. Martin Luther King, Jr. in June of 1965, when he addressed the graduating class of Oberlin College with these words and I quote:

All I'm saying is simply this: that all mankind is tied together; all life is interrelated, and we are all caught in an inescapable network of mutuality, tied in a single garment of destiny. Whatever affects one directly, affects all indirectly. For some strange reason I can never be what I ought to be until you are what you ought to be. And you can never be what you ought to be until I am what I ought to be — this is the interrelated structure of reality.

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Ladies and Gentlemen,

The topic of today’s breakfast is: Securing Democracy, Securing Business- Building a prosperous South Africa For All. This is an important and timely topic, because it makes us to stop and take stock of where we have come from and how far we have travelled as a nation in terms of creation of partnerships for the sustainable democracy. In order to do justice to the topic, we may as well ask ourselves the following philosophical questions (1) is it the only duty of the government to secure democracy or government, business and civil society;(2) What should be the relationship between the government and business in a democratic state (3) Does business have a role in a democratic state;(4) from our own experience, what has been the role of business in our democratic transition. I would like to urge you put these questions at the back of your minds within the context of Ubuntu as I proceed with the discussion.

Programme Director,

If there is a nation in this world that understands and appreciates the importance of business in building democracy, that is South African. In casting an eye over South Africa’s recent history, is the scale and growing sophistication of the business response to the key challenges facing the country, which continues to be one of the key ingredients in the fundamental transformation of the nation.

At the time when apartheid  state was reluctant to entertain any idea of talks with the African National Congress and other liberation movements, as you would recall, it was business, through the spirit of Ubuntu, that initiated a series of consultations that contributed to the country’s unfolding transition by, for example, responding to the living conditions of black South Africans in the 1970s; by brokering the first contacts between liberation movements in exile in the 1980s; by facilitating the National Peace Accord and the CODESA negotiations and the Multi Party Negotiation Process in the early 1990s; and by initiating and supporting a wide range of development programmes.

During those times, men like Christo Nel, Leon Cohen and Mike Saunders were keen to see business actively involved in the interaction between the apartheid government, beleaguered by a devaluing Rand and international sanctions, and the increasingly visible United Democratic Front (followed by the Mass Democratic Movement) as the internal arm of the banned African National Congress (ANC).

Some members of the business sector had already begun to hold meetings with progressive political leaders and had joined a group of prominent South Africans who travelled to Dakar in West Africa in 1987 to make contact with leaders of the ANC. However much the government railed, the course was set. The foundations of the apartheid status quo had cracked beyond repair. In anticipation of the intense process of social dialogue and transformation that would inevitably follow, essentially to accelerate the process of dialogue – the Consultative Business Movement (CBM) was established.

In  the  post-apartheid period, CBM merge with other business formation and  formed  National Business Initiative (NBI), which faced the complex and turbulent post-1994 realities with an avowed determination to promote increased economic growth, reduce poverty and inequality, and support effective and efficient governance

The story of the NBI and its role following South Africa’s first democratic election is powerfully illustrated by three very different examples of its products – organisations and projects that have their origins in the NBI but – in the case of two of them at any rate – have taken flight on their own.

The first example is the establishment of Business Against Crime, as a response to the high levels of crime and violence that were prevalent in the latter half of the 1990s.

The second example is the establishment of the Business Trust in 1999, at the time of the second democratic elections. The Trust was formed to demonstrate business’s continued commitment to South Africa’s new democracy, and to ensure that the business connection to government at the highest level was maintained as Nelson Mandela handed over to Thabo Mbeki as president of the country.

Unlike the first two examples, the third project overviewed has not become a separate organisation. Nevertheless, the remarkable success of the Colleges Collaboration Fund (working in the vital but neglected field of further education and training), reflects a different mode of institutionalising the work of the NBI and sustaining the impact. 

Ladies and Gentlemen,

I have deliberately focused extensively on the historical role that the South African business played in the transition in order to demonstrate the power and the potential of business in building a better South African for all. This also sought to remind ourselves the lesson that our transition was a shared responsibility and this is what many people forget including business itself, and as a result, when something goes wrong stakeholders are quick to blame one another instead of sharing responsibilities. Marikana is a case in point here. In as much as our past success was our shared responsibility, our future should also be a shared responsibility.

Programme Director,

In spite of the many challenges facing our country, South Africa remains one of the most competitive places to do business in the world. We have one of the best policy environments in the developing world. Let me mention an example to substantiate my statement. According to the World Economic Forum's 2010-11 Global Competitiveness Report, of the BRICS countries, South Africa is the easiest place to open a business, requiring on average the least number of steps and days to open a business. I am specifically mentioning BRICS because we will be hosting the fifth BRICS Summit in few weeks time from now and we are inviting all South African business to make use of the opportunity of our membership of this group to grow their business.

This leads us to the point wherein we should ask ourselves, what has been the role of the post-apartheid democratic government in securing democracy and business and how far we have gone. In spite of the huge challenges facing our country, the record of achievements speaks on behalf of the Government of South African with regard to securing democracy. As we speak today, we have one of the most advanced constitutions in the world. This constitution as you know was a product of a social contract we have had between the state and civil society and amongst former adversaries. It was a constitution based on the spirit of compromise and consensus.

In terms of financial accountability, South Africa ranks second out of 100 countries for the transparency and accountability of its budget processes, according to the latest Open Budget Index Survey by the Washington-based International Budget Partnership.

South Africa scored 90 points out of a possible 100 points in the Open Budget Index report of 2012, standing out as one of only six countries worldwide that releases extensive budget information to the legislature and the public in general.

The African democracy institute, Idasa, works in partnership with the International Budget Partnership on the Open Budget Index. Produced by independent experts, it is the only independent, comparative and regular measure of budget transparency and accountability in the world.

According to Mo Ibrahim Index on Governance, our performance is as follows:

·        South Africa scores 71 (out of 100) for overall governance.

·        South Africa scores higher than the regional average for Southern Africa which is 59.

·        South Africa scores higher than the continental average which is 51.

·        South Africa receives its highest score in the Human Development category (77) and its lowest score in the Sustainable Economic Opportunity category (62).

Our recent report released by the UN Human Rights Council in Geneva is also something to be proud of as a nation trying to secure democracy. The report commended South Africa for its commitment to human rights and improving the lives of its citizens, and for the delivery of basic services such as housing, health and education.

In addition, South Africa was also praised for its leading role in the UN Human Rights Council, especially with regards the rights of gay, lesbian, bisexual, transgender and intersex persons.

Programme Director,

From the foreign policy front of which we are custodian as the Ministry of International Relations and Cooperation (DIRCO), it is crucial to mention that our foreign policy is predicated on the Ubuntu diplomacy which is outlined in the Freedom Charter declaration which was adopted in the year 1955. The charter states that “South Africa shall strive to maintain world peace and the settlement of all international disputes by negotiation- not war”.

In this regard, South Africa has always regarded Africa as the centerpiece of its foreign policy, and is mobilising a significant amount of resources towards the socio-economic awakening of the continent, peace-making and peace-building, as well as post-conflict reconstruction and development.

This is essential for us to ensure sound economic integration to enhance socio-economic conditions of our people, which is fundamental to our national interest.

For us to strengthen our African agenda, we have a responsibility to promote unity within our continent. We have successfully realised our objective in countries such as Sudan and South Sudan. In this regard, countries such as Madagascar will continue to receive our devoted attention based on our efforts of a better Africa and a better life for all.  

I would like to mention that our success of economic diplomacy will determine the extent to which SA can achieve its domestic priorities. In this regard we have identified regional integration, reform of the international trading system, and negotiating preferential access for African goods on international markets form the core of SA's economic diplomacy

Our economic diplomacy in the African continent has seen a significant increase in number of South African companies operating in the continent. These companies, in the spirit of Ubuntu, continue to shape the economic landscape of the continent by creating jobs and therefore contributing to the much needed economic development of the continent. They are indeed the important stakeholders in our foreign policy vision of creating a better Africa in a better world.

 According to Consultancy African Intelligence, by 2008, South African companies had put US$ 8.5 billion into the sub-continent, more than any other African country. Investment has occurred in a number of economic sectors and has gone beyond the traditional Southern African markets, spreading into West, East and even Central Africa, in most cases with much success. 

To the credit of South African companies, they have also ventured into investments that traditional investors from the Global North never dared to explore as they were deemed to be risky. This is clearly something we need to celebrate as it demonstrates that the better life for all transcend our borders within the spirit of Ubuntu, which simply means, I am because you are.

We gladly welcome recommendations and observations made the National Development Plan on how we should conduct our relations with other countries in the world and enhance our status in the global politics.

Programme Director,

Those are some of a few achievements made during the last 18 years of our democracy and the way ahead is long. However, we should not be complacent since we remain one of the most unequal societies in the world. South Africa constantly ranks among the most unequal nations of the world. The richest 10 percent of the population earn just over 51 percent of the country’s total income. That means the other 90 percent of the population share only 49 percent of what is earned in South Africa. The poorest 20 percent receive less than 1.5 percent. The implications of these figures are not good for the Government and business.

To borrow a quote of Leading South African Business Leader and Writer Clem Sunter

“We cannot continue to live in an island wealth surrounded by a sea of poverty"

Allow me to refer extensively to an article published recently in the business report by Pierre Heistein who is the convener of UCT’s Applied Economics. “Inequality is economically inefficient. Regardless of how much the superrich are able to buy, there is a limit to how much of their wealth they can practically use. A centralisation of wealth from the majority to a select few results in a decrease of overall demand.

It slows the circulation of money and spending, and ultimately decreases the number of jobs being created.

It also leads to political instability. When a country is characterised by an extremely rich minority and a poor majority, the richer elite inevitably has greater control over the leadership and is able to steer it to meet its own interests.

Throughout history there are examples of how leadership is violently overthrown when inequality reaches a tipping point”. Indeed this is a trend of unequal societies, not poor ones”

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Indeed these are societies whose economies remain archaic and extractive as opposed to inclusive and innovative. Conversely countries that have developed the necessary strong governance (political and economic) institutions that allow for innovation and creative destruction (of old ways of doing things) these are the countries that thrived. Similarly businesses that have also refused to change the business models – innovative destruction will lag behind creating more inequality and by implication implosion.

The mining industry and agricultural industries are a case in point where the industry continues to use outdated extractive business models creating major inequality and hence the subsequent strikes. The area of unrest has the highest income disparity. Hence, despite the economic framework and institutions in place business initially when the strike broke out rather than trying to build a partnership with workers and government in order to find an innovative and sustainable solution, it spoke past government and workers.

Thankfully we have moved beyond that. However if we want to ensure the prevention of future Marikanas and farmworker strikes in other industries all parties must begin to play its role together.

Government must ensure that it creates an enabling environment for business to prosper through strong institutions.

Business and labour must recognise that it must change its sometimes archaic business models and allow for innovation and creative destruction in order to move forward and address inequality.

Solving inequality is not about making the rich poorer. It is about preserving a system whereby a sufficient income gap exists to allow an incentive for innovation, hard work, risk taking and wealth creation, but where the pursuit of wealth is inclusive of all those involved in building it.

This profound analysis finds resonance in the words of wisdom from our globally most celebrated struggle icon, Dr Nelson Rolihlahla Mandela when he says; I quote

“As long as poverty, injustice and gross inequality persist in our world, none of us can truly rest. Security for a few is insecurity for all”  

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There is empirical evidence that poverty and unjust inequality are sources of global threats to peace and stability. For us to sustain our hard won democracy and development, it is imperative to always embrace the spirit of Ubuntu in everything we do, including how we do our business in our country and elsewhere.

Ladies and Gentlemen,

I would like to argue that it is a responsibility of the all stakeholders in the country to ensure that that we together in the spirit of Ubuntu can consolidate our democracy. It is clear that democracy cannot be secured without the role of business, which is critical for the economic development. The mantra is that there can be "no freedom without development and no development without freedom”. (Amartya Sen)

One of the British famous poets, John Donne, once made the following observations: “No man is an Island, entire of itself; every man is a piece of the continent, a part of the main… And then he goes on toward the end to say: any man's death diminishes me, because I am involved in mankind; and therefore never send to know for whom the bell tolls; it tolls for thee.” And by believing this, by living out this fact, we will be able to remain awake through a great revolution.

In conclusion ladies and gentlemen I want to believe that as social partners that is  business, government and labour, we today again begin to find in ourselves the same substantive resolve of Ubuntu we experienced in the in the 80's and 90’s between those businesses I spoke about earlier. We should encourage such social partnership that brought down the apartheid system and ushered in our democracy to come to the party again and help us to address our current economic disparities.