Houghton, Johannesburg 27 October 2000
Honoured Guests
Ladies and Gentlemen
Captains of Industry
I would like to thank you for offering me the opportunity to speak to you this morning on an important topic in South Africa today – business and education.
But first let me digress, to recognise those American companies present in this room today that have a long history of genuinely opposing Apartheid. I appreciate the decisions whether to stay or leave were sometimes difficult ones that involved leaving a country that you grew to know and care about. To those of you who stayed and willingly abided by the Sullivan Principles I thank you for respecting the importance of good business practices, ethics and the respect for human rights. To those of you who divested, I particularly thank you for supporting sanctions and now returning to assist us in rebuilding our great country, its people and its economy. To all of you, who are now part of our new and developing South Africa, welcome.
Of course our struggle against the legacy of apartheid and against poverty is not yet over. During the fight against apartheid, South Africa lost several decades of education for its people, what is often called the lost generation. During those difficult years, large numbers of schools, universities and other educational institutions became sites of the struggle. Students refused to co-operate with inferior education. Teachers, likewise, refused to co-operate with officials of the apartheid regime. This was all further complicated by the lack of educational resources for schools which we now regard as historically disadvantaged. Unfortunately this legacy left South Africa with a poor human resource base, which we are now having to address, particularly if we are to succeed in making South Africa competitive in the global economy.
The poor human resource base has enormous impact – it reduces the size of the market, affects personnel recruitment, and manifests itself in the scourges that poverty reaps such as violence and crime. It indirectly leads to greater uncertainty in the work place, lower productivity, and the fluidity of the South African Rand although regrettably much of the fluctuation of the Rand has precious little to do with what happens in South Africa.
We acknowledge that American Business as a whole has been the one of the most active investors in South Africa over the past six years. But one must still ask the question, why are you here? Well, it is no secret that South Africa is considered the engine of growth for Africa, especially sub-Saharan Africa. It is also no secret that South Africa has an advanced infrastructural, financial and tax system that encourages investment.
South Africa is also one of the top three most important emerging markets offering excellent returns and a beautiful place live and work – it is hard to believe that some expatriates, particularly diplomats, are paid hardship allowances for living here. But these are advantages that can easily evaporate without support from business and from the government for the broad spectrum of education and training.
Undoubtedly the futures of business and education are intertwined within the economic realities we face. I believe that our Human Resources are one of the most important “factors of production” in today’s global economy. At the same time employee mobility has dramatically increased globally and the quest to retain skilled staff is a difficult task in today’s world. On the one hand we are “exporting” skilled professionals to some countries and “importing” equivalent numbers from other countries.
One of my responsibilities in all of this is to provide the policy framework to transform the old systems of education, to overcome the apartheid legacy and to create a system that prepares young South Africans to participate fully in our fledgling democracy and in the global economy. Investment in South Africa by American business over the past several years since the end of apartheid has been significant and we want to keep it that way. But every time you make the decision to invest into South Africa perhaps, you can also consider the issue of education a little more closely.
Education is fundamental to the transformation of society. Linked to this is the ability or willingness of the state to deliver an appropriate education system. We inherited an education sector, which was structured along racial rather than rational lines. Our first task was to realign 17 racially based departments with their own salary structures and terms of condition. His resulted in significant re-deployment of teachers. As a result, as much as 93% of provincial education budgets is spent on salaries. So, this leaves very little for other equally important items such as maintaining or building new schools, providing education materials to children, and introducing new cultures of technology and innovation into the classrooms. Add to this that more than 50% of schools still have no electricity and nearly 25% no water.
This is where we need public/private partnerships that allow us to leverage our resources to have greater impact on learning and the world of work and productivity. I urge you, as business professionals, to consider how to contribute to these important and essential tasks when investing into South Africa, whether through running your business or through making Corporate Social investments. I am aware that there are many large companies in South Africa that do not have Corporate Social Responsibility programmes. I am also aware that within members of the American Chamber of Commerce should be congratulated for making substantive Corporate Social Responsibility donations in education. This is a great start.
On the South African front the Business Trust with the assistance of the National Business Initiative has contributed R450 million to three enormously importantly educational projects. This partnership with business is a good example of what can be done if the will is there.
But we need more investment in human resource development in the form of training and support. The fierce competition for markets, the demands for performance management and a trainable work force and the requirement for higher worker productivity needs a fundamental and overall solution. The solution to these problems is one that government and business can jointly address.
The world is changing – with information and communication technologies a critical underpinning force – in this context in the 21st Century we speak of the knowledge economy. Markets and suppliers are no longer regional, but global. Established companies crumble while competitors engage in new partnerships. Previously distinct technologies converge, such as is happening in the media and telecommunications industries. The speed with which the new media have penetrated our lives is staggering: it took 38 years for radio to reach 50 million listeners, 13 years for television to reach 50 million viewers, 4 years for the internet to attract 50 million surfers. Estimates suggest that by the year 2005 there will be 2 billion people using the Internet!
There is also a tussle for dominance between what is being called the ‘new’ economy and the ‘old’, where start up (or is it upstart?) information technology companies have paper values that defy logic. But the sea-saw of investment in the new global order always has one common denominator: that is, the development of human capital.
To develop South African human capital for the new global economy and to address the legacy of Apartheid policies, we need business to understand issues we all need to address. The most common area of concern is education. American corporate contributions should include extensive training for your employees at all levels, allowing them access to the world through the Internet and travel, and real Corporate Social Responsibility Investment programmes. This investment in your employees and South Africa will go a long way towards improving the conditions in which you do business in South Africa and how your company competes in the global economy.
What drives me, as Minister is the idea of a day when normalcy returns. When schools become, as they are for so many children everywhere, safe homes for simple childhood. Places where young minds find adventure, mischief or boredom as may be their wont: places where childhood’s petty preoccupations reign supreme rather than the adult matters of starvation, blighted prospects and invidious exclusion. What awful words these are, that ought to be out of place in a world where equity reigns.
Democracy is not built on ballot papers alone, democracy requires much deeper foundations, ones that outlast differences of opinion that will outlast political parties and heads of state that will outlast many generations. This is the challenge that faces us now, as a young and developing nation: to entrench our democracy and make it real. This requires us, very profoundly, to transform our state, our society and our economy through education and training.
I thank you and wish you well.