Foreign Affairs Budget Speech - Address
by Deputy Minister Aziz Pahad to the National Assembly,
28 May 2002
International relations has to be carried out in a
world that has fundamentally changed in the last decade.
Today, we live in an era of profound change, distinguished
by globalisation. We cannot role it back or ignore it.
Globalisation has been made possible by the unprecedented
dismantling of barriers to trade and capital mobility
together with unprecedented technological advances and
steadily declining costs of transportation, communication
Globalisations manifestations have a profound
impact on the global economy, and the world political
order and indeed every countrys foreign policy
is influenced by these manifestations, which inter alia,
Dramatic increase in the flows of capital :
In 1980 cross-border transactions in bonds and equities
(shares issued by companies) were equivalent to 8% of
Japanese GDP; in 1998 the figure was 91%. During the
same period it increased in the US from 9% to 230%,
in Germany from 7% to 334% of GDP.
The global bond market is remarkably big. In 1997 it
was US$25trillion. By mid-1999, the total value of bonds
outstanding had reached US$34 trillion. That exceeds
not only the total capitalisation of all the worlds
stock markets (US$27,5 trillion in 199 ) but also the
total GDP of all the worlds countries ( US$30,1
trillion in 1997 ). More than half of all bonds in 1999
were issued by governments or other public sector agencies.
And just under half of all bonds were of USA origin.
The daily turnover on the worlds foreign exchange
markets rose from US$1,6 trillion in 1995 to US$ 2 trillion
in 1998, implying annual flows of more than US$400 trillion
( SAs approx R11 billion per day or approx. US$1
billion ). The volatility of the financial markets,
largely determined by speculators, is a cause for serious
concern e.q. Asian meltdown.
Monopolisation is taking place at an unprecedented pace.
Nobody is immune, not even the large multinational companies.
For example : of the Fortune 500 top companies of 1980,
60% of them had disappeared by 1994 ( either bankrupt
or merged with other companies ).
Growing concentration of financial and economic power.
In 1997, around 90% of total bond issuance was issued
by just 20 firms ( of which Merrill Lynch, Morgan Stanley
and JP Morgan accounted for around a fifth ).
A transnational communications take-over in the US created
a company whose market value exceeds the GDP of nearly
half of all UN members.
A task force, sponsored by the New York Council of
Foreign Affairs, concluded that the assets of the three
top billionaires are more than the combined GDP of all
least developed countries and their 600 million people.
While there is greater demand for liberalisation of
economies there is increased protestenism, e.q. OECD
agricultural subsidy of + $300 billion a year; USA
re + $160 billion agricultural subsidies; anti-dumping
and other non-tarrif restrictions.
Unprecedented scientific technological revolution.
In 1993 there were 50 pages on the World Wide web. Today
there are more than 50 million. In 1997 143 million
people used the Internet. By 2002 there are over 700
million users. In 1996 the e-commerce market was $2.6
billion, by 2002 expected to grow to $300 billion. Globalisation
has opened up new possibilities for growth.
Spectacular advances have been made, but it is grossly
uneven. Nearly 1,3 billion people do not have access
to clean water; one in seven children of primary school
age is out of school; an estimated 1.3 billion people
live on incomes of less than 1$ a day. It has been estimated
that a 4% levy on the worlds 225 most well-to-do-people
would suffice to provide the following essentials for
all those in developing countries: adequate food, safe
water and sanitation, basic education, basic health
care and reproductive health care.
We have moved from a world which once was marked by
governments with control over resources to one where
little wealth is common or public. We live in a world
where inequality of wealth and opportunities are growing
within countries. In the USA, for example, the inequality
based on falling real wages for low-paid workers is
unparalleled since the Great Depression. The same story
emerges in Europe.
Extreme right wing tendencies.
But the growing inequalities between countries is even
more stark one fifth of the worlds people
living in the highest-income countries have :
86% of the worlds GDP the bottom fifth
have a mere 1%
82% of the worlds export markets the bottom
fifth just 1%
OECD countries with 19% of the global population, have
71% of the global trade in goods and services, 58% of
foreign direct investment and 91% of all Internet users.
What are the consequences for Africa:
The number of Africas poor have grown relentlessly
and Africas share of the worlds absolute
poor increased from 25% to 30% in the 1990s
Africas share of world trade has plummeted since
It now accounts for less than 2% of world trade and
if SA is taken out of the equation, the figure for Africa
is a mere 1.2%;
Africa is the only region to see investments and savings
decline after 1970. The savings rate in many African
countries are the lowest in the world.
In 1997 Africas debt was estimated to be $159
billion and by 1999 this increased to 201 billion dollars.
We are faced with the reality that outstanding external
debts in many African countries exceed the entire GDP,
and debt service requirements exceed 25% of total export
Overseas development assistance has dropped more than
one fifth in real terms since 1992.
Many of our countries have taken steps to create a
climate conducive to direct foreign investment. They
have either through structural adjustment programmes
or as country programmes put in place trade liberalisation
policies; the strengthening of the rule of law; improvements
in legal and other instruments; greater investment in
infrastructure development, privatisation, greater accountability
and transparency, greater degree of financial and budgetary
discipline and the creation and consolidation of multi-party
democracies. However foreign direct investment has not
flowed sufficiently to Africa.
Electrical power consumption per person in Africa is
the lowest in the world; Tokyo has more telephones than
the whole of Africa; less than half of 1% of all Africans
have used the internet.
Diseases such as HIV/Aids, Malaria and Tuberculosis
Poverty and wealth are very unequally distributed and
many of the "wretched of the earth" are condemned
to lives of extreme poverty and degradation. This situation
is unacceptable and unsustainable.
This stark reality provides a fertile environment for
conflict, instability and underdevelopment.
The ANCs January 8th statement on the occasion
of the 90th anniversary calls on us "to ensure
that the process of globalisation does not result in
the further all round widening of the gap between the
rich developed North and the poor developing South ...
which would condemn billions of people to poverty ...
This would be a certain recipe for the most catastrophic
social upheavals engulfing the whole globe".
How do we respond to this challenge? Over the last
decade we have witnessed the rampant growth of neo-liberal
and neo-conservative ideologies which confuse market
economies with market societies and argue that the debate
about the nature of political economy has ended. The
neo-liberal paradigm gives little consideration to concerns
about representative democracy, human rights and social
justice, and the environment. It sees globalisation
as a de-regulated process of being able to do anything
anywhere in order to maximise profit.
This is a recipe for a global catastrophe.
[Financial Times 08/05/2000]. "Vigorous
market competition helps create individuals of a particular
sort; homo economic or egoistic maximising men.
This although sold as political neutral markets in
fact encourage to spread of "materialistic values
By default the world is now opting for a version of
capitalism in which profit motives is largely unrestrained
There is an alternative. The Commonwealth Heads of
Government Meeting at Fancourt declared that:
"In todays world, no country is untouched
by the forces of globalisation. Our destinies are linked
together as never before. The challenge is to seize
the opportunities opened by globalisation, while minimising
The persistence of poverty and
human deprivation diminishes us all. It makes global
peace and security fragile, limits the growth of markets,
and forces millions to migrate in search of a better
life. It constitutes a deep and fundamental structural
flaw in the world economy. The greatest challenge therefore
facing us is how to channel the forces of globalisation
for the elimination of poverty and the empowerment of
human beings to lead fulfilling lives."
The historic United Nations Millennium Declaration
endorsed by all the world leaders declared:
" We believe that the central challenge we face
today is to ensure that globalisation becomes a positive
force for all the worlds people. For while globalisation
offers great opportunities, at present its benefits
are very unevenly shared, while its costs are unevenly
distributed. We recognise that developing countries
and countries with economies in transition face special
difficulties in responding to this central challenge.
Thus, only through broad and sustained efforts to create
a shared future, based upon our common humanity in all
its diversity, can globalisation be made fully inclusive
and equitable. These efforts must include policies and
measures, at the global level, which correspond to the
needs of developing countries and economies in transition,
and are formulated and implemented with their effective
This reflects the sentiments of a growing broad and
representative movement, united in our rejection of
neo-liberalism and blind faith in markets. What is energising
is a perspective of globalisation based on a democratic
and just world order and a new system of collective
This demands that, in the context of NEPAD, we must
mobilise this powerful army to ensure that the Millennium
Summit targets, are met, inter alia:
Halve the worlds very poor by 2015
Primary education for all by 2015
Reduce maternal mortality by three quarters and under
5 mortality by two thirds, also by 2015
Halt and then reverse the spread of HIV/Aids, malaria
and other major diseases by 2015.
The year 2001 will undoubtedly be remembered for the
terrible tragedy that occurred on September 11th. We
are now having to deal with new policies, inter alia,
"global coalition against terrorism," "you
are either with us or against us," the "axis
of evil," "clash of civilisations," etc.
Also, the debate between unilateralism and multilateralism
is growing more pronounced.
All this impacts fundamentally on international relations.
Notwithstanding the fundamental changes to international
relations after 11th September 2001, the global challenges
affecting humanity are precisely the same as those before
11th September 2001!
If anything, these challenges have taken on a new urgency.
There is growing consensus internationally that to defeat
terrorism, a holistic approach must be adopted in dealing
with the root causes thereof.
These are, inter alia:
Eradication of poverty, communicable and pandemic diseases;
Ensuring sustainable development;
Combating the negative consequences of globalisation;
Preventing global warming;
Containing the threats to global peace and security,
amongst others, the current conflict in the Middle East;
Eradicating racism, xenophobia and other forms of intolerance;
Combating transnational crime and terrorism.
Sadly, different perspectives of the current global
situation are emerging, differing interpretations reflecting
two different basic agendas the development agenda
and the security agenda. Among countries of the South
there is a perception that some countries of the developed
North are giving priority to the security agenda to
the detriment of the development agenda, thus failing
to see the inter-connectivity between security and development.
Failure to appreciate this is resulting in the growing
alienation of many and the disillusionment with the
manner in which governments conduct their business,
as well as reaction to the existing global environment.
The situation in the Middle East continues to deteriote.
This constitutes a serious threat to international peace
and security and undoubtedly creates the most fertile
breeding ground for terrorism.
In the last few days Israeli troops again invaded the
West Bank towns of Tulkarm, Qalgiya, Bethlehem. Israel
also plans to implement further movement restrictions
in the Palestinian Territories whereby the Gaza Strip
would be divided into four separate areas and the West
Bank into eight; Palestinians would only be allowed
to travel between their own towns and cities in different
areas between 05:00 and 19:00 daily and only if they
are in possession of permits issued by the Israeli military
authorities; and merchandise destined for or coming
from the Palestinian territories as well as merchandise
moving between Palestinian cities would have to be transhipped
from incoming trucks onto local trucks.
This was followed immediately by another suicide bomb.
An Israeli author Amos Oz wrote:
"I am willing to fight the just war for the survival
of Israel. I refuse, however, to fight for the continued
occupation of Palestinian land. This war is unjust.
It saps my countrys sanity and morality and corrupts
I saw kids grow up with hatred in their
eyes. Eyes that I was ashamed to meet.
"Ometz le Saren" [courage to refuse]
is a filling response to Amos agony. A
few weeks a group from the "Ometz le Saren"
visited South Africa to learn from SAs experiences.
The peace forces in Israel are motivated by the interests
of Israel and understand that this can best be served
if ensuring that the interests as Palestinians are defended.
They made the choice to break out of the spiral of
repression, violent resistance, more severe repression
and greater violence. They made the choice not to be
participants in the perpetuation of the illegal occupation
of the Palestinian Territories. They made the choice
not to be perpetrators, nor even bystanders, in the
humiliation and persecution of the Palestinian people
but to challenge the legality of the occupation and
of the orders given to Israeli soldiers in the Occupied
Territories. This is more than their democratic right.
It is their patriotic and humane duty.
Security does not bring peace. Justice brings peace
and that peace guarantees security. I am convinced that
their road is the road that will lead to peace and security
for both Israelis and Palestinians.
The Government of South Africa unequivocally condemns
the collective punishment imposed against the Palestinians
and continuing attempts by the State of Israel to destroy
the infrastructure of the Palestinian National Authority,
its legitimately elected leadership the extra-judicial
killings and the loss of many innocent lives.
Security Council resolutions treated with impunity
Serious consequences for multilaterism
"Seek and destroy" policy doomed to failure.
The leaders of Israel must appreciate the basic truth
that fundamental to the ending of terrorism and conflict
is the establishment of an independent Palestinian state.
No amount of violence against the Palestinians will
stop their struggle for the establishment of their own
While we unreservedly recognise the right of the Israelis
to live in their own state within secure borders, this
will only become a reality if the legitimate right of
the Palestinian people for an independent State becomes
a reality. South Africa therefore welcomes the Arab
league proposal that Israel should withdraw to the 1967
borders in exchange for recognition by the entire Arab
world. This proposal creates the possibility for an
historic process that could end the tensions and conflict
in the Middle East.
The peoples of Palestine and Israel are condemned by
history to live together and they have no choice but
to succeed or live in perpetual conflict together.
All pressures must be intensified to restart the political
process to find a negotiated settlement of the fundamental
causes of this conflict. The argument that there will
be no substantive negotiations until peace is achieved,
is unsustainable. Peace negotiations are necessary to
end the conflict and violence!
At the 1st ever Africa EU Summit [Cairo 2000]
President Mbeki said:
"Cairo will have meaning only to the extent that
all of us, without exception, wage the struggle to end
human suffering in Africa with the passionate intensity
of the humanists who have given dignity to despised
human beings, while others were happy to enclose themselves
within their little worlds of selective and false fulfilment.
In the interests of humanity let us through concrete
action contribute to making this an African century.