Transcript of the Speech delivered by President Thabo Mbeki of South Africa at the Progressive Governance Regional Conference, Sandton 28 July 2005

President Mbeki: Thank you very much Essop. Let me say welcome to everybody to this important conference. I am very glad indeed that the decision was taken that we should, that the Progressive Governance Group should meet in Africa and that, as part of that process, would convene here over the next two days. And I say thank you very much to the people who made an enormous effort to be here. Because the workers on South African Airways are on strike. I understand that some people had to do some very adventurous things in order to get here.

But I am very, very glad indeed that you were able to make it. I understand there are still some people who are stuck in Europe, who are insisting, nevertheless, that they are still coming and should be with us tomorrow morning. I think it is a matter of great encouragement to us, such a level of commitment to be here.

And as I was saying, that is the first time we are meeting in Africa, we are meeting in the countries of the South. As South, as Africa in the South, we would face as many challenges in terms of giving answers to a whole range of questions, centred on the question of: what is the progressive African agenda? I am not sure what cap to wear this afternoon. Essop said he was introducing the President of South Africa. That is a government cap. A government cap requires that I must speak diplomatically.

If I was wearing a different cap, I would be less diplomatic. Essop, what do you advice?

Essop Pahad, Minister in the Presidency: Both.

President Mbeki: Both? Ok.

President Mbeki: But, of course, we come to the African Continent at a time when the Continent is indeed striving to address a number of important issues. And I would hope that we, during the course of our interaction and all of the groups in which we would be meeting, we try and probe some of these questions in order to find the progressive answers that the Continent needs. One of these, of course, is the issue of peace and stability on the Continent. As everybody knows, there is a lot of work going on in this area. Because, of course, all of us understand the thing that is said by everybody, that without that peace, peace and stability, we won't have the development. But also, in the context of the theme of the conference, putting the people first, the matter of peace is critical, because, indeed, the people who die in these conflicts are the ordinary people. And I think, as progressives, we have to say, we have to end the conflicts, in order to save the lives of the ordinary people from death caused by those conflicts. But, clearly, in many instances, the issue is not merely about peace-keeping troops and arrangements of that kind. In many instances, in fact in all instances, the achievement of lasting and stable peace and stability has to do with the structuring, the functioning, and the tensions that exist in our societies. And in many instances it is not quite easy to engage those issues, so that indeed we create the social and economic conditions which would result in that stable peace and stability, but it is an important part of what the Continent is trying to address.

Another element, of course, with which all of us are familiar, is the struggle to establish stable democracies with respect for human rights. Again, this is very much part, must be part of, a progressive agenda. In this country, we are celebrating this year a famous document of our own liberation struggle, the Freedom Charter. And among other things, it says the people shall govern. And I am saying that, from our point of view, the issue of human rights, of democracy, the capacity of the people to govern, to determine their future, clearly has to be yet another important part of the progressive agenda in our Continent.

Hopefully, in the process of addressing these things, as well as the challenge of the reconstruction of the African economies, which obviously must be yet another part of that African progressive agenda, the reconstruction of those African economies, we would succeed in addressing two things, which is the building of equitable and inclusive societies and providing a better life for the ordinary people of our Continent.

The issue of what should be done to achieve that reconstruction of the African economies, I am quite certain, should be one of the matters to which the conference would pay particular attention. It is a challenging issue and I am not quite sure that we quite know what it is agreeing to do. And I am certain that with all of us here, we should be able to provide some answers to this question, which, and I am certain, also that those answers would also be relevant to other countries, countries outside of the African Continent, but I will come back to this particular question. And I am saying, as a result of all of these interventions which the progressive movement has to undertake, of peace, of democracy, of economic development, of shared wealth, we have to focus on the matter of building these equitable and inclusive societies, of social cohesion within our countries and a better life for the peoples of Africa.

And obviously, all of these are interrelated and interdependent goals. And therefore I believe that the theme of the conference in that regard is indeed very correct. It must be correct that we should say, the progressive agenda must indeed be to put the people first. The people first in all areas, whether this relates to issues of political rights, of peace, of a better life, of culture and so on. All of these things must in the end address this matter, whether this progressive agenda is indeed putting people first.

What must be done? What must be done to achieve this goal? And I am hoping that, given that all of us here do not have the problem that I have of half the head being covered by an official hat. You'll be able to confront this matter quite directly, of what should be done of putting the people first. I see the Dean of the Diplomatic Corps in the country, [unclear] of Libya. I don't know what hat he is wearing.

Because I am sure he can make some very important inputs into this question, to answer this question, what is it that we must do to put the people first? As somebody yesterday said, I must read a poem written by a Guatemalan, [unknown name], and I am sure many of us will be familiar with [unknown name], who was a revolutionary, a poet, a guerrilla fighter, who in the end was captured by the military junta of the day in Guatemala in 1967 and burnt alive. [unknown name] wrote a poem which was entitled "Apolitical Intellectuals".

And he said: "One day the apolitical intellectuals of my country will be interrogated by the simplest of our people. They will be asked what they did when the nation died slowly, like a sweet [sounds like], small and alone. No one will ask them about their address, their long siestas after lunch, and no one will want to know about their sterile combats with the idea of the [unclear]. No one will care about their higher financial learning. They won't be questioned on Greek Mythology. They will be asked nothing about their absurd justifications, born in the shadow of their total lie. On that day the simple man will come. Those who had no place in the books and poems of the apolitical intellectuals, but daily delivered their bread and milk, their tortillas and eggs, those who drove their cars, who cared for their dogs and gardens and worked for them and they'll ask, what did you do when the poor suffered, when tenderness and life burned out of them. Apolitical intellectuals of my sweet country, you will not be able to answer. A vulture of silence will eat your gut, your misery will pick at your soul, and you would be mute in your shame".

Fortunately we have no apolitical intellectuals here today.

But I think this constitutes a challenge to the conference that is meeting here. We should not be condemned to this vulture of silence which will eat our gut and pick our soul, so that we are mute in shame, because we are refusing to answer these important challenging questions that face our continent, to answer the question: What constitutes the progressive African agenda and how shall we achieve the objectives of that agenda?

Speaking in South Africa last year, Getchi Karouri [phonetic] quoted Prof Anyan Nyongo [phonetic] of Kenya, I don't know if he is here, who had said and I quote: "For we do believe with [unclear], that there was a false start in Africa. One in which development ideas and technology were to be brought to us by well-meaning people from the developed world. And we made a false start. One would put faith in abstract mathematical models from any number of multilateral development agencies that said they knew the answers to our problems, if we sat, listened and did what we are told with aid money. With the variety of authoritarian regimes in Africa that made money for themselves, but not for their people, by playing this funny, make-believe game of development. So we did a rollercoaster from one development model to another and wound up where we are, poor, humiliated, undeveloped and deprived of self-confidence."

If Prof Anyan Nyongo [phonetic] is correct, that is what constituted a false start in Africa, what shall we do then to make the right start this time? And I believe that one of the starting points for us, as progressives, is I believe that we must accept that the new liberal paradigm dominates global thinking with regard to the challenges of development. This has been handed down to us as a so-called Washington Consensus, with two central propositions. One of these advances a notion of dependence on the so-called 'free market' to solve all sorts of economic problems. And the second one is a notion of a minimal state that works to protect property rights and creates the best conditions for the private accumulation of capital.

I am saying we should, I believe that as progressives, we must accept that, indeed, this is a paradigm that dominates global thinking with regard to the challenges of development. But I believe that, as progressives, we cannot agree, we cannot agree with these propositions. And therefore, the question arises naturally therefore: What is the alternative progressives' development paradigm?

And I believe this question is urgent. An answer to this question is urgent. Because, for instance, if you take the African Continent, I think if you take all the African, Caribbean, Pacific countries, the practical reality we face is, for instance, that the Cotono [phonetic] Agreement between the European Union and the ACP countries is based precisely on the propositions of the Washington Consensus. If you go through that agreement, and the related economic partnership agreements, what informs that agreement between the AU and developing countries of the world is that the poorest countries of the world, the ACP Group, what informs that agreement, is precisely these notions put forward by the Washington Consensus, of the leading role of capital development, minimal rule of the state, and therefore the need to do all of these other things that would give this kind of space that new liberal paradigm demands for capital with all of the issues about deregulation and privatisation and so on. So, in the context of African countries, for instance, negotiating the EPAs with the EU, I am saying that what underlines those negotiations is this particular paradigm.

And therefore, the matter of the impact of the new liberal paradigm on the African Continent is not a theoretical matter. It’s a matter that people are grappling with now to see what it is we can do to achieve what I was saying at the beginning, that the Continent says, it is now engaged in a process of the reconstruction of the African economies.

But can we reconstruct the African economies, proceeding on the basis of that new liberal paradigm? In the last few weeks, one of my colleagues, if I put on the government cap, a head of government on the Continent, has been telling me about some of the pressures that they face from the rest of the world. He says there is a demand, for instance, that they must privatise the telecommunications company in the country, and they have said no. And the reason they have said no is because the government believes it is necessary to expand the telecommunications infrastructure to get, to reach into the parts of the country which are underserviced, particularly the rural areas. And obviously, if you privatise this, the private company would do what they call "cherry picking", and focus on those parts of the economy that are relatively wealthy and therefore capable of generating the necessary profits. And he says, I have run into trouble because of that. They have run into trouble because they have refused to open the door to foreign banks, "liberalisation of the capital markets", I think that is what it is called. And the reason they have done that, he says, is because, were you to go that route with regard to the banking system, this would impact very negatively on their capacity to mobilise domestic capital, for domestic development. So he was saying to me they have run into lots of problems and criticisms from the rest of the developed world because of the positions they are taking on this and other issues.

But, of course, this is very much part of the, this construct, this construct that we have to depend on the free market to solve our socio-economic problems and that the state needs to step back, except as a creator of conditions, as I was saying, for the private accumulation of capital. What is the progressive development agenda? Because, I am saying, I do not believe we would agree that this new liberal paradigm would solve our problems.

Two years ago, about two years ago, I made a very interesting discovery in Switzerland. I thought, generally, that I was fairly educated and discovered I wasn't as educated as I thought I was. I discovered that there is poverty in Switzerland. And the Minister of the Swiss Confederation was telling me what was happening in Switzerland. He said, for instance, even in a place like Geneva, the Canton has soup kitchens for Swiss born. Not immigrants, but Swiss born. That you had many middleclass families who get expelled from their apartments because they can't afford the rents. As a result of which the cantonal government has to accommodate them in all sorts of places. I was very surprised about this, because the notion you carry in your head is that Swiss society works like the clocks that they make. It runs very smoothly and everything is fine. But, of course, I think that Switzerland would be one of the countries that could very proudly stand up and say that for many years we have respected the prescriptions of what came to be known as the Washington Consensus.

There is a recent article on this matter which is entitled: "A growing number of Swiss do not earn enough money to pay their monthly bills - a new investigation into the state of poverty in Switzerland shows". And it says the Swiss Labour Association, an independent charity with its roots in the trade unions, says one in every eleven Swiss is forced to live below the poverty line. The charity warns that the number is likely to rise still further in future. It says, according to federal statistics published in March of last year, those worst affected by the threat of poverty are large families, single parents, workers with only primary education and the self-employed. A separate study carried out in Zurich last year, also revealed that a third of the total population in Switzerland risks joining the ranks of the working poor. And Bridget Steinmann [phonetic], a Director of the Swiss Labour Association, says the biggest obstacle to tackling poverty in Switzerland is its invisibility. You don't really see poverty when you walk the streets and you don't see many beggars.

And since being poor is considered shameful, people hide and are very reluctant to ask the state for money. She said Switzerland is not a paradise or some exotic country where there is no poverty. And a Swiss parliamentarian said, Switzerland's international reputation as a wealthy country is at the same time both accurate and misleading. Switzerland is of course a very rich country, she said, but the problem is that three percent of the inhabitants have 90% of the wealth, while the remaining 97% have to share the rest. So we have a layer of people who are not able to run their lives on their salaries and who are in need of help from the state. And she says that poverty has been a taboo subject in Switzerland for decades. And people have only recently become aware of the extent of the problem. Until about two years ago it was like a taboo and nobody really talked about it, but people are now more conscious of this problem. It has certainly been a challenge to get the message across, she said.

I am saying this about Switzerland to say, if this paradigm can produce those kinds of results in Switzerland, as wealthy, as rich, as developed as it is, what would we expect of its impact on the African Continent? And I believe that one of the things that we should say, in that context as progressives, is that it is perfectly obvious that, to achieve the kind of development that we need on the African Continent, is going to require large resource transfers from the rich to the poor. I don’t know if my colleagues here will have time to discuss this during the course of the conference.

That certainly is what we are trying to do in this country. Because this country also represents – there are two societies. Part of the society, very rich, where we are here. It looks very nice, very developed and so on. And like in Switzerland, the Swiss said, you are quite unlikely to see beggars on the street. But not very far from here you would find this dire poverty that characterises the majority of the people of this country.

And, so what do we say? We say, for these poor parts of South Africa to develop, is going to require large resource transfers from this richer part of South Africa to the poorer part of South Africa. And we believe that, as a progressive movement, we cannot but take a position like that. It may be difficult to find ways and means and mechanisms to effect that transfer, to do it in a way that doesn't weaken and destroy this richer part, which produces the wealth that we need, but to do it nevertheless. I am saying it may be difficult to find the correct answers and ways and means and methods to achieve that, but that it is a critical element of our domestic development and I am sure we have no doubt about that.

We sent a delegation from the government here to, earlier this year, to Brussels. We discussed this thing with the European Commission to say, something that we've said a number of times in the past. The European Union has taken precisely the same position with regard to itself, that it is not possible to develop the undeveloped parts of the member states of the European Union without large resource transfers from the richer parts of the EU to the poorer parts. The whole regional policy of the European Union is based on this thesis. So the discussion about solidarity, about cohesion, about structural funds, is based on this notion that in reality it isn't possible to say, as the Washington Consensus would say, as a new liberal paradigm would say, for Liverpool in England, for the Merseyside to develop, all it needs is to create the appropriate conditions to attract capital. Create these market-friendly conditions, the capital will come and the state must play a minimal role. The EU has said it doesn't work. You need a conscious intervention which is going to result in the transfer of resources to the Merseyside, to Liverpool. Otherwise it could not develop as it should. We are saying the same thing here.

The reason I had this discussion with the Swiss minister two years ago, I was telling her what I was going to say at a conference in Geneva, that I was going to repeat what I have just said about the regional policy of the EU. And therefore to say, when we are discussing the question of the defeat of underdevelopment globally, it has to include these large resource transfers from the rich to the poor. If this policy is correct within the context of fighting underdevelopment within the EU, it surely must be correct with regard to fighting underdevelopment globally.

So I told her that this is what I am going to say. And I am going to bang the tables to say, development, if you are serious about development, you the developed world, have got to match that seriousness with those resource transfers. And she said to me, Mr President, I agree with you. We need to do that. In reality, what we try do here in Switzerland to address this challenge of poverty, is indeed to transfer resources to the poor of Switzerland. But, Mr President, you are not going to get that money, she said. She says, you won't get it, because the challenge of poverty within the developed world, said the challenge of poverty here in Europe, is in fact quite serious. So, indeed, we will speak very favourably about the challenge of development, but you are not going to get the resources that you are asking for.

Well, I do not know whether she was right, but of course, the answer to this question in the context of that new liberal paradigm is that, again advancing the notion of this minimalist state, that this matter of those large resource transfers should be left to the market, and all you need to do is to make ourselves market friendly and the resources will come. And of course, as you know, people will talk about China and so on, which indeed have received and for some time now, continue to receive large volumes of capital from the rest of the world. But, not many of us are China. Indeed, if I was a business person myself, I would be very keen to access that Chinese market.

What I am trying to say is that, does the progressive development paradigm, does it take on board this particular issue? When you talk about development in Africa to reconstruct and build the African economies to defeat poverty, that means capital. Obviously, as African countries, we have got to do what we have to do to make sure that we mobilise and generate capital domestically on the African Continent for these purposes.

And indeed, as a project that is ongoing now, some of our people looked, for instance, at the public sector pension funds, in a number of African countries, and they found, I think it is about twelve African countries, that those pension funds, they actually manage something in the order of $130 billion. And we have this absurd situation that some of that money is invested in stock exchanges outside of the African Continent. Because it is sad, about a lack of capacity to absorb these large volumes of capital here. That is something we are working on, to say that, but yes, capital, savings of the working people of the Continent that are being used to develop countries that are already developed. We must do something about that.

But nevertheless, in addition to that, in order to address these challenges that the Continent faces, means that there has to be an additional capital transfer from elsewhere in the world in order to meet these objectives. And the market won't do it. The market won't do it.

There are notions that Malawi can create market-friendly conditions, as a result of which they are going to get billions of capital coming into Malawi to invest. I don't believe that story.

I think it emphasises a point that, inevitability, as progressives we have got to argue that these are major challenges of human development that cannot be left to the market. That requires that the state has to intervene in order to help us to address these challenges. I would imagine that, as I was saying at the beginning, given the dominance of the new liberal paradigm in terms of the global understanding of the challenges of development, it might indeed be very, very difficult for even ourselves sitting here as progressives to agree to this. Even the financialist, George Soros, has complained about what he calls, market fundamentalism. But I suspect, I have a sense, that fundamentalism, market fundamentalism, has also had an impact on progressives. So, the right thing to do then becomes: How do we accommodate ourselves within the market? But I think there must be a progress of agenda which comes at this matter differently [unclear].

It is quite clear, on the African Continent that continuing poverty will result in the continued scramble for scarce resources, which underpins much of the conflict on the Continent.

If you look at the Côte d’Ivoire now, the problems that they have, part of that arises from the fact that, because of the history of the revolution of the country in the region, you had many people from Mali, many people from Burkina Faso, who live in Côte d’Ivoire. They are peasant farmers. They are growing cacao, they are growing coffee, they are in trade and once the price of cacao went down, the reduction of those resources, tensions arose. What are these foreigners doing in our country?

I am saying, that that scramble for scarce resources, which underpins a lot of the instability on the Continent, will continue if these matters of the development of the African Continent are not addressed successfully, as will the process of social stratification. Social stratification would result, indeed, in an elite at the top, reaping whatever benefits there are of that development, while the masses of the people remain where they are, which would be contrary to what we are saying, as being central to the progressive agenda, 'putting the people first'.

And I am sure that inevitably in the course of the conflict that would arise, when you say, we are democratising while keeping the structures of inequality within society and further entrenching them, a minority having a monopoly of that access to these resources, you obviously will have conflict. And I am quite certain the dominant elite would in any case be tempted to resort to repression in order to keep the people down, which brings us back to a situation of instability if no development becomes possible.

So I think, as progressives, certainly on the African Continent, we have to answer these large questions. When we talk about a 'progressive agenda', what are we talking about? If we say part of that progressive agenda must mean that we do not allow ourselves to become market fundamentalist, what replaces that? Maybe, another question that we would ask and answer more honestly that I can.

Progressive change requires a progressive movement. It can't happen on its own. Does a progressive movement exist on the African Continent? Are there these progressive forces on the Continent which would be able to elaborate on this progressive agenda and mobilise for its success? Maybe we could ask the question more broadly. Does a progressive movement exist globally? Is there a progressive movement that could indeed, globally, change the development paradigm? - So that we are able to deal with the challenges of poverty in Switzerland, produced by the same system that produces poverty on the African Continent. With the globalisation of the capitalist market, should there not be a global progressive response? Is it possible to have a global progressive response? Because, indeed, I think it may very well be very difficult within that system, of the situation of globalisation, it may very well be difficult for individual countries to adopt progressive policies and to pursue them on their own when the rest of the world is going in a different direction.

I know that Karl Marx is very much out of fashion.

But, 150 years ago plus, when he saw the development of this global capitalist market, he said it would no longer be possible for the workers of one country to defend their interests acting on their own. And that is why he said, 'Workers of all countries unite'.

That process of globalisation has gone much further now than it was then, but perhaps we should also say, 'Progressives of all countries, unite'. To unite around a perspective, informed by the need to achieve the right power balance between capital on the one hand and the working people and the poor on the other. And I believe that in joining that progressive, global progressive struggle, to achieve that power balance, to depart from this paradigm which gives this dominant place to capital, so that all of us become market fundamentalists. That the central progressive goal surely must be that, as this conference is saying, we must put the people first throughout the world.

Thank you very much and best wishes.

Brenda Nkosi
Communications: Media Liaison
Tel: (012) 300 5451
Fax: (012) 323 6080
Cell: 086 683 5451 / 082 770 2369

Issued by: The Presidency
28 July 2005

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