Minister Essop Pahad
Address: CHAMSA biennial Economics for Prosperity Conference
11 November 2005
Political and economic reflections on the role of government and the private sector in achieving Southern Africa's Millennium Development Goals
I would like thank the Chambers of Commerce and Industry South Africa (CHAMSA) for inviting me to address this 1st Biennial Economics for Prosperity Conference.
We are of the view that the achievement of the Millennium Development Goals cannot and must not be the sole responsibility of any single country because we live in a world that is complex, interdependent and where there is a huge unequal distribution of wealth and resources. Similarly within a country, the responsibility to achieve the millennium development targets cannot and must not be the sole responsibility of the government.
Our government is deeply committed to halving poverty and unemployment by 2014. These are our goals, they reflect our particular national challenges, but they are consistent with the Millennium Development Goals. We believe that our success in meeting these goals is linked to a number of complex factors including:
- The active promotion of our vision of creating a non-racist non-sexist South Africa that belongs to all who live in it;
- Our connection to the people – the creation of a people's contract;
- Our government's ability to deliver on a domestic agenda of political stability;
- Continuing to nurture the conditions that have produced the longest most sustained period of economic growth and prosperity in our country's history;
- Promoting respect for the constitution; protecting and advancing the fundamental human rights of our people; and
- Understanding the intricate relationship between domestic peace and stability and regional and continental peace and stability.
Our government and our people have long realised that our domestic policies to eliminate poverty and hunger need to be accompanied by the simultaneous advancement of the peoples of the Southern African region and the Continent in general. To this end we have prioritised the promotion of the interests of the citizens of the African Continent. We prioritise the promotion of peace and stability in our region and in Africa as a whole. We play a critical role in the implementation of New Partnership for Africa's Development (NEPAD), the African Union programme, and projects aimed at propelling Africa's economic development while simultaneously contributing to the achievement of the Millennium Development Goals.
We also recognise that the Millennium Development Goals place obligations on wealthier countries to “develop a global partnership for development”. They also obligate governments in the developing world to speedily put in place the requisite systems, institutions and capacities in order to ensure that when the developed world makes concrete commitments - in terms of aid, debt cancellation and trade, the developing world is able to make sufficient progress emanating from more aid, less debt and open and fair world trade.
For its part, the African Continent must accelerate the pace of entrenching good governance and democracy including: combating corruption; enhancing and protecting human rights; building capacity, developing the economies of its countries, ensuring their effective integration into the global economy and promoting and building peace, security and stability without which any hopes of eradicating poverty, hunger and disease would not materialise.
In South Africa, our Constitution requires us to improve the quality of life of all our citizens. This in turn requires us to work collectively reduce unemployment, poverty and underdevelopment. This means putting into place a political and an economic environment conducive to political stability and sustainable economic growth and development. These we believe, are essential for continued prosperity and the data have proved that our strategy was indeed the correct one.
Currently we are in the longest and most sustained period of economic growth in our country's history. And our fiscal policies as well as our broad macro-economic framework are responsible for this immensely positive trend. However, we cannot afford jobless economic growth.
Recently the Reserve Bank noted that it was lower interest rates, tax relief, and the increases in welfare payments that have been significant stimulants to the healthy economic growth that we are experiencing. However the Reserve Bank pointed out that “the only blemish is the paucity of jobs in the private sector”. This means that while the first economy is expanding and expanding rapidly the second economy still requires interventions to stimulate it.
Certainly the halving of poverty and underdevelopment can only be beneficial to the private sector. We must continue to work to create a South Africa that belongs to and benefits all who live in it.
In September 2000, South Africa joined the international community in adopting the United Nations Millennium Declaration and its eight Millennium Development Goals. To attain these goals to which we are all committed, we need to work co-operatively and in tandem; we need strong public/private partnerships. This is about pooling our collective resources in this immense nation building and nation strengthening task. This is about being innovative, ingenious and proactive.
The achievement of Southern Africa's millennium development goals is dependent on the extent to which all of us government and the private sector work co-operatively to develop and implement effective and efficient policies. In this regard the private sector has a number of very important roles to play including:
- Identifying strategies to create employment for all South Africans and especially for those from historically disadvantaged backgrounds.
- Creating more internships and employment opportunities for young South Africans seeking to access the labour market.
- Investing in both physical as well as the social infrastructure of our country;
- Encouraging foreign investors to invest in South Africa;
- Ensuring that the benefits derived from this period of economic growth is more equitably divided between the First and the Second economies;
- Developing meaningful partnerships with both the public sector and with civil society.
We must consciously articulate and affirm a clear role for the developmental state in the fight to eradicate poverty, unemployment and underdevelopment. We must work together to deal with market related and market induced inequalities; we must provide equality of opportunity to all our citizens; we must work to develop social cohesion; we must promote peace and stability regionally and globally; we must promote sustainable growth and development; ecological and environmental sustainability; and we must deal with the glaring unequal division of wealth on global, national regional and national levels. This we must do with urgency.
United Nations Member States in the Millennium Declaration agreed to “spare no effort to free our fellow men, women and children from the abject and dehumanising conditions of extreme poverty, to which more than a billion of them are currently subjected”. This commitment was then codified into a total of 8 Millennium Development Goals and 18 targets to be reached between 1990 and 2020. The eight goals include:
- Eradicating extreme poverty and hunger;
- Achieving universal primary education;
- Promoting gender equality and empowering women;
- Reducing child mortality;
- Improving maternal health;
- Combating HIV and AIDS, malaria and other diseases;
- Ensuring environmental sustainability; and
- Developing a global partnership for development.
Very specifically eight time bound measurable targets were developed, including:
- By 2015 to halve, the proportion of the world's people whose income is less than one dollar a day and the proportion of people who suffer from hunger and, by the same date, to halve the proportion of people who are unable to reach or to afford safe drinking water.
- To ensure that, by the same date, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling and that girls and boys will have equal access to all levels of education.
- By the same date, to have reduced maternal mortality by three quarters, and under-five child mortality by two thirds, of their current rates.
- To by then begin to reverse, the spread of HIV and AIDS, the scourge of malaria and other major diseases that afflict humanity.
- To provide special assistance to children orphaned by HIV and AIDS.
- By 2020, to have achieved a significant improvement in the lives of at least 100 million slum dwellers as proposed in the "Cities Without Slums" initiative.
All of these commitments are laudable and are achievable with political will, a sense of solidarity, and purposeful co-operation
As a country we can proudly say that we are well on our way to meeting our Millennium Development Goals. The South Africa Millennium Development Goals Country Report clearly indicates that South Africa is well on course to meet or in some cases exceed the Millennium Development Goals and targets. In fact, the current assessment of South Africa's performance suggests that we have already met some of the Millennium Development Goals. This may be related to the fact that when the new democratic government came into being, in 1994, we set for ourselves many targets similar to those articulated in the 1990 Millennium Declaration.
As a government we are committed to the eradication of poverty while recognising that in the short term, given the impoverishment of our people we need policies aimed at poverty alleviation. In this regard we have instituted a number of social programs and social income programs designed to alleviate poverty, for families, children and people with disabilities. We are one of the few countries which can proclaim the “the poor are not getting poorer”.
The measures to address extreme poverty and hunger that we have adopted include:
- Cash transfers in the form of social assistance grants whose expenditure increased 3.7 fold between 1994 and 2004 - from R10 billion to R37.1 billion, and the number of beneficiaries grew from 2.6 million in 1994 to 7.9 million in 2004;
- The social wage (monetary value of accessed basic services) which amounted to about R88 billion in 2003;
- The Expanded Public Works Programme;
- The establishment of the Agricultural Starter Pack Programme and The Comprehensive Agricultural Support Programme.
But these measures have to work in concert with economic empowerment, sustainable economic growth and development, shared growth and the revitalisation of our marginalised rural communities where large numbers of our impoverished people live.
With respect to education and the future of our children, our current projections indicate that the goal of full enrolment will be achieved well before 2015. And we have already eliminated gender disparity in primary and secondary education.
Since 1994, South Africa has seen massive shifts of resources in the education sector, and its budget allocation stands at R81.995 billion in the current financial year rising to R89.537 billion and R96.732 billion respectively in the outer two years of the current MTEF – making education the single largest budget item (about 6% of GDP). As a proportion, this is amongst the highest in the world.
Between April 1994 and March 2005, approximately 2,4 million housing subsidies were approved. During the same period, 1,74 million housing units were built. During 2004/05, housing delivery was largely focused on completing stalled housing projects. The new housing strategy stands to accelerate housing ownership further.
The proportion of households having access to clean water increased from 60% in 1995 to 85.5% in 2003 By December 2004, 10 million people had since 1994 gained access to a basic clean water supply. Access to sanitation increased from 49% percent of households in 1994 to 63% in 2003.
We are spending billions of Rand to deal with HIV and AIDS. And our program to combat malaria has met with enormous success. As a result of the malaria control programme the number of malaria cases dropped from 64 622 in 2000 to 26 506 in 2001 and 15 619 in 2002. Malaria deaths in 2001 were 74% less than 2000.
We have put into place both institutional and programmatic mechanisms to ensure that young South Africans have access to decent work opportunities. Although unemployment among youth is high, there are signs suggesting that interventions on skills and training, including learnerships, and youth service are beginning to yield positive results. But creating new and viable opportunities for integration youth into the labour market remains one of our key challenges.
Thus, despite the major challenges we still face, especially in the delivery of services, we can confidently conclude that South Africa is well on course to achieve targets set in the Millennium Declaration. We are confident that, where we have not yet met the targets, the necessary foundation for their attainment has been firmly put in place.
While we believe we have made remarkable progress we are aware of the broader global challenges. The world's leaders gathered in September 2004 at the United Nations to shape an international agenda for the United Nations that would rally all nations on a common cause for global stability and development.
What is clear from the proceedings is that the challenges confronting our continent are reflective of a more general crisis in the global system. President Mbeki pointed to the immense hope that our people had at the dawning of the new millennium. But he noted that today there is disillusionment and that these goals and aspirations may be elusive. He called for urgent political action; he called on developed member states to take the necessary steps to achieve full implementation of the Millennium Development resolutions.
For Africa the debate once again brought into sharp focus the reality that ours is a continent where poverty is on the increase, unemployment is rife and underdevelopment has to be overcome.
However there are immense structural barriers to deal with. Foreign Direct Investment in Africa is still negligible, bilateral aid flows have dropped and heavy debt continues to impact decisively on our developmental efforts. Add to this other legal and illegal capital outflows, as well as the brain drain and one gets some sense of the transfer of resources from the world's poorest continent to the richest countries of the world.
A recent United Nations Conference on Trade and Development (UNCTAD) report also contests the popular view that our debt problems are simply the legacy of irresponsible and corrupt governments. While this is part of the explanation, other factors such as exogenous shocks, commodity dependence, poorly designed reform programmes in many cases imposed from outside, and the actions of creditors have all contributed decisively to Africa's debt crisis. Most of the debt accumulated between 1988 and 1995 was under the guidance of structural adjustment programmes.
As a consequence it appears that Millennium Development Goals won't be met by Africa. At the present rate of development, some project that it will take Africa many more decades to meet these goals.
So whilst globalisation is creating immense opportunities of growth and wealth creation for some, it has produced socio-economic conditions that make it difficult for many countries on our continent to meet their Millennium Development Goals. The historic Millennium Summit Declaration proclaimed that “we believe that the central challenge we face today is to ensure that globalisation becomes a positive force for all the world's 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.”
We can not afford to lose this opportunity to constructively engage the developed world in the historic project to rid Africa of the ravages of poverty, diseases and underdevelopment. Certainly we in South Africa can take pride in the reality that we will achieve our Millennium Development Goals but that is very cold comfort. We must do all we can to assist our sister countries of the South to achieve theirs as well.
Thank you. Issued by: The Presidency
11 November 2005
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