Keynote address by Minister of Transport, Mr Jeff Radebe, at Stanlib International Pension Fund Conference, in Sandton

I am grateful to Stanlib for the opportunity to join you this morning and I am very pleased that you are holding such an important International Pension Fund Conference, because the opportunity to work should be premised on a strong and a robust pension policy.

But my duty this morning is to give a good account and a reflection on the policies of the African National Congress (ANC) to address the serious challenges we have faced since coming into office in 1994. In particular, the overall economic policy of the African National Congress derives from a number of documents which have been penned by the movement and its partners. In 1992, the African National Congress released a seminal document on its economic approach, known as "Ready to Govern."

The central goal of our economic policy was to create a strong, dynamic and balanced economy that will be directed towards the elimination of poverty and the extreme inequalities generated by the apartheid system; the democratisation of the economy and empowering the historically oppressed as well as creation of productive employment opportunities and living wage for all South Africans.

Underpinning this approach of 'Ready to Govern' was the Reconstruction and Development Programme's (RDP) vision which stated that:

"The fundamental principles of our economic policy are democracy, participation and development. We are convinced that neither a communist central planning system nor an unfettered free market system can provide adequate solutions to the problems confronting us. Reconstruction and development will be achieved through the leading and enabling role of the state, a thriving private sector, and active involvement by all sectors of civil society which in combination will lead to sustainable growth."

As a result, the collective leadership of the ANC remains steadfastly committed to building on the foundations that have been laid for future growth and prosperity since the advent of democracy in 1994.

These foundations have resulted from the policies developed by the ANC led government, the cornerstone of which was the Reconstruction and Development Programme (RDP) and the Growth, Employment and Redistribution (GEAR) policy.

I am honoured on behalf of the ANC to highlight some of these important economic building blocks that have been put in place. Through improved and effective fiscal policies that have been applied since our first democratic election in 1994, the ANC government has reduced its debt burden and the budget deficit.
This has enabled us to increase real expenditure in health, education, housing, social grants and other services. Since 2000, public spending has increased by more than 70 percent in real terms. During the 2000/01 fiscal year, consolidated expenditure amounted to R233,5 billion, rising to R600,1 billion for the 2007/08 fiscal year.

Before 1994, the South African economy was virtually stagnant. Since then the economy grew on average by approximately three percent in the first ten years of democracy. Since 2004 the rate of growth has risen to over 4,5 percent a year. The economy is approximately 40 percent bigger in real terms than it was in 1993.

The real increase in the income of individual South Africans is now growing at over three percent a year, compared to one percent a year during the first decade of our democracy. This growth has been the result of careful macroeconomic management, which has enabled our economy to grow continuously for more than eight years. This is more than twice as long as any previous upswing in South Africa's recorded economic history.

The national income per capita has rose by 22 percent per person since 1999, with increases across all income groups. South Africa has successfully controlled the rate of inflation through an inflation targeting monetary policy, implemented by the South African Reserve Bank, together with trade policy and sound fiscal management.

South Africa has been very pro-active in World Trade Organisation (WTO) negotiations, advocating for a fairer system of international trade. Our commitment to freeing trade was demonstrated by halving the number of tariff lines between 1990 to 2004, with 80 percent of tariffs becoming duty free. We have also eliminated quotas and most import surcharges. Our economy has become more competitive, with export volumes increasing at an average of 5,9 percent per year between 1990 and 2004, and comprising a greater diversity and destinations of exports.

The economy created about two million new jobs in the first decade of freedom, at a rate of about 200 000 jobs a year. Since 2004, job creation has more than doubled, with over 500 000 jobs created each year. Employment is rising faster than at any point since the 1960s, due to the collective commitment of the ANC Government. If we maintain our job creation rate at current levels we will meet our 2004 election manifesto target of halving unemployment and poverty by 2014.

Recent improvements in our economy have been driven by an increase in the rate of investment, which was as low as 15 percent of Gross Domestic Product (GDP) in 2003. Since 2004 it has steadily improved to 18,5 percent of GDP. Fixed investment is now growing at an average rate of 11 percent a year, since 2002 relative to the GDP. This is due to an increase in public and private sector investment.

Our economic performance is of course partly a consequence of favourable global economic conditions in the form of sustained commodity prices, low interest rates globally and strong international demand, which have combined to contribute to the momentum of our income growth and to financing investment through capital inflows. South Africa received R144 billion in capital inflows in 2006, so that in spite of a current account deficit of 6,5 percent of GDP, which amounts to R12 billion, we have been able to finance a higher level of investment, and therefore create opportunities for future growth.

However our undertaking to the people of South Africa, as the ANC, is not only to build a successful economy, but to address the historical inequalities and poverty that still scar our country. Our economic successes would mean nothing if we could not act concretely to improve the lives of the South African people. In this respect, much has been done to ensure that the benefits of freedom are shared by all.

Workers' rights are now protected, and employers and workers are increasingly finding better ways of resolving problems as industrial relations improve. Vulnerable workers such as domestic workers and farm workers have been given greater protection.

More and more black people are becoming professionals, managers and technicians. Policies and laws have been put in place and funds made available for black people to own businesses to facilitate a greater level of entrepreneurship amongst South Africans.

Since 2004 we have extended the programme to provide social grants to benefit 11,2 million of the poorest of the poor in our society. Independent research shows that the grants are having an important impact in terms of reducing poverty.

Empowerment initiatives have made great strides since 2004 with the introduction of a range of progressive empowerment charters and the finalisation of the Codes of Good Practice for Broad-Based Black Economic Empowerment (BBBEE), thus ensuring that Black South Africans can have a significant stake in all sectors of economy.

A key programme for the reduction of poverty and the development of work experience and skills is the Expanded Public Works Programme (EPWP). The programme is on course to reach its target of one million job opportunities in five years. By June 2006, it had surpassed its employment creation targets across four sectors, with more than 300 000 job opportunities created. The number of projects within the EPWP is constantly expanding, reaching more people in terms of work opportunities, services provided and infrastructure built.

By June last year, 85 percent of all poor households were receiving water directly to their homes, compared to just fewer than 50 percent of people in 1996. Again we will have to accelerate our progress to reach those who still have no access to clean water, and on speeding up provision of sanitation services.

The electrification programme has seen 3,5 million homes electrified since 1994. The ANC has established the Free Basic Electricity Programme where people earning below a certain income bracket receive a free monthly allocation of 50 kilowatt electricity.

In 1996, only 64 percent of our people lived in formal houses. Today, over 70 percent enjoy this right. Between 1994 and mid-2006, 2,8 million housing subsidies were approved which is unprecedented in South Africa's history.

Overall, the frontiers of poverty are steadily being pushed back. Between 2001 and 2004, it is estimated that the number of households living below the poverty line dropped from 4,1 million to 3,6 million. These and other gains in addressing poverty can be attributed to improving economic conditions and a wide range of government interventions specifically aimed at addressing poverty.

In fact, in almost every area of public service delivery there has been considerable progress to affect improved living standards, from access to schooling, health care and refuse removal, to electrification, access to computers, roads and street lights, to sport facilities, telecommunication services and public transport.

This constitutes tangible progress in improving the lives of the people of South Africa. It is an approach which is protected by the notion that democracy, and strong democratic institutions will ensure that government is able to serve its people.

The new South Africa has a strong Constitution, an independent judiciary, a free press, and a Bill of Rights, and many other democratic institutions in order to protect the freedom and the rights of the people of South Africa.

All these achievements are the result of the policies that have been shaped by the collective leadership of the ANC. These have been articulated in detail and implemented by the Executive Government of South Africa, formed by the ANC. The leadership of the ANC is proud of the achievements of our young democracy, and the foundations that have been laid, but will remain seized with the challenges that we still face. We will continue the tradition of our collective decision making as we rise to this challenge.

Our aspiration is to achieve growth of six percent a year or more, an unemployment rate of below 14 percent by 2014. The ANC leadership will continue to monitor our progress in sharing the fruits of democracy with the people of South Africa, and will continue to be accountable and transparent to the people of South Africa.

I am aware that there has been concern and speculation about the ANC succession debate in the media. These concerns are misplaced as once a leader of the African National Congress is elected, that leader has to remain true to the policies and traditions of the African National Congress.

The policy development process of the African National Congress is a collective effort, driven largely from a National Executive Committee (NEC) Policy Committee which I am fortunate to head. Policy positions are work-shopped with all the structures of the African National Congress and its alliance partners including other interest groups such as youth, business, faith-based organisations and other organs of civil society.

The policy positions of the African National Congress are debated and adopted by the members of the ANC at the ANC National Conference. Neither an individual, nor a group within the African National Congress, has the authority to change policy outside the National Conference. Those adopted policies then become the political mandate of the leadership collective for five years until the next National Conference.

The ANC is the oldest political party in Africa formed in 1912. Its leadership, through the ages, has many common traits and offers us much wisdom and many lessons, particularly around the importance of our collective leadership and responsibility.

The ANC leadership is a team. In fact I cannot recall any leader of the ANC ever deviating from the stated policies of the organisation, as adopted at the National Conference. As an example, our iconic former President, Mr Mandela had also made a policy suggestion regarding the composition of the National Executive Committee in 1994, but this was not acceded to by the ANC National Conference.

As I have indicated, despite the dramatic changes that has been affected to our economy, the ANC leadership team remains acutely aware that we still face huge challenges to bring about a better life for all South Africans. In our mission to tackle the scourge of unemployment, poverty and inequality that blight the lives of many of our people, our leaders will, in the words of Martin Luther King Junior, 'accept finite disappointment, but never lose infinite hope'.

The policies and programmes of the ANC are continually being enhanced and modified in our efforts to deliver on our mandate to the South African people. More recent targeted initiatives of government were included in the Accelerated and Shared Growth Initiative (AsgiSA) and the Joint Initiative on Priority Skills Acquisition (Jipsa), which will give further impetus to the improvement of the performance of our economy, including the critical area of job creation. These initiatives, introduced after discussion within the ANC and with alliance partners, are aimed at addressing the binding constraints on the South African economy.

Moving forward, the ANC has placed particular focus on the skills shortage in the economy. This is a global problem. Europe and America are importing scarce skills from Africa, and India is running short of Information and Communication Technology skills. New emphasis is being placed on developing priority skills and encouraging greater learning in Mathematics, Science and Technology.

We have also improved the training environment for workers and have started the recapitalisation of the Further Education and Training (FET) Colleges, whilst increasing financial support for poorer students within our system of tertiary education. In addition, we are significantly expanding the resources devoted to our national capacity for knowledge production, innovation and research, including through an innovation management framework which includes the promotion and development of indigenous knowledge.

Emphasis is also being placed on continuing to roll out a state-led infrastructure investment programme, and promoting strategic investments in productive activities to diversifying the economy and build towards an overall investment to GDP ratio of 25 percent.

A number of major investments are being planned in the rail and road transport network, the telecommunications backbone and international telecommunications links, new energy production and distribution infrastructure, which should all impact on the cost of doing business in South Africa. Further investment is also planned in housing, water and sanitation, hospitals and clinics, public transport networks, and of course, new football stadiums.

The investment community in South Africa benefits from a continually improving economic and social environment built on strong democratic and legal institutions, and transparent and efficient laws, regulations and institutions with respect to the financial sector.

In particular, international investors benefit from national treatment, property rights that are entrenched in our legal system, and the ability to repatriate profits and capital freely. South Africa has continually improved its ratings with the international credit rating agencies and has never defaulted on coupon or capital repayments on its debt.

Our domestic policy approach is also reflected in our foreign policy priorities. South Africa remains a committed member of the international community, pro-actively engaging international debate for a fairer global system that supports development, whilst promoting best practise and international standards through the multilateral system. Within Africa, South Africa is an active member of the Southern African Development Community (SADC) and the African Union (AU), where much attention is placed on policies and programmes that will support the development of our continent, such as the New Partnership for Africa's Development (Nepad).

The ANC continues to build on its long-term commitment to push the frontiers of poverty by adhering to the Freedom Charter and taking the long-term decisions to deliver a better life for all our children and grandchildren and for the generations to come.

In conclusion, the Government's Medium Term Budget Policy Statement, released last week correctly observes that: "Our domestic economy remains strong buoyed by rising investment, productive capacity, rising employment and incomes, strong consumer demand and healthy capital inflows."

This statement indicates much more profoundly that the South Africa of today is better than yesterday and that tomorrow will be better than today.

I thank you.

Issued by: Department of Transport
8 November 2007