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I take great pleasure in having the opportunity to address you
on behalf of businessand to reflect upon the challenges for the
consensus-seeking process in the year ahead.
At the outset, let me begin by saying that business is fully
committed to Nedlac.
The first 15 months of formal stakeholder participation in
policy-making have certainlynot been without difficulties. A new
democracy brings with it challenging new roles andrelationships,
which inevitably involves a gradual learning curve.
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What we do have is a common goal which must unite us, that is,
to lift South Africaonto a higher growth path where the benefits of
growth are shared, to alleviate povertyand to rid ourselves of the
massive unemployment crisis this country faces.
Nedlac has a key role to play in expediting the process of
finding strategies towardsattaining this goal. It provides a forum
where important information and ideas can beexchanged which
contribute to the development of workable strategies that address
thenational social and economic objectives needed for growth and
development. Significantly,it is also a forum where stakeholder
concerns can be better understood, so that strategiesare
sustainable outside of the confines of Nedlac.
As Nedlac enters its second year of existence, it is essential
that we criticallyreflect upon the lessons already learnt, to build
on strengths and identify weaknesseswhich must be overcome through
joint effort.
The challenges for the coming year are manifold:
The political transition over, South Africa now arrives at
another decisive juncture when crucial economic and social issues
that need to be urgently addressed are on the table.
Global pressures to a large extent dictate the macroeconomic
path that the country must follow. We are not in a position to
begin experimenting with different policy packages, and we cannot
reinvent the wheel. The international evidence is out there in
terms of what we simply have to do.
International experience shows the importance of creating an
environment which is conducive to growth. This will involve
encouraging both domestic and foreign private fixed investment,
growing the SMME sector, restructuring state assets, greater
investment in human resources, improving productivity levels,
strengthening the competitiveness of our markets, and maintaining
fiscal prudence.
Integration into the global economy is a necessity if South
Africa is to avoid being marginalised. Improvements in living
standards world-wide over the past three decades have been driven
by the massive increase in global trade to over $5 trillion per
annum. The reality that goods and services can be produced and sold
virtually anywhere in the world bring great opportunities but also
enormous pressures. Integration into the international economy is a
complex process requiring deft economic management and posing
significant challenges to the country's policy-makers if it is to
successfully benefit the whole country.
While global pressures dictate the macroeconomic path that the
country must follow, it is in the detail of the policies that
unique solutions must be found which reflect the particular history
of South Africa and the resulting crisis it faces. Nedlac has an
important role to play in helping manage the process of
restructuring necessary for South Africa to compete successfully in
the global market.
The spirit of cooperation which lead to the political miracle
and gave birth to the new South Africa can lead also to an economic
miracle that benefits all our people. Unfortunately, that spirit
has not always been consistently present in Nedlac over the last
year, and it is essential that all parties make a concerted effort
in this regard. Nedlac must serve as a forum for constructive
dialogue. There is a need to strengthen the relationships between
the constituencies and develop the mutual trust which is necessary
for us to engage meaningfully on often controversial issues.
Business and labour must recognise and pursue the long-term
national interest in the knowledge that some of the necessary
policies may in the short-term negatively affect our
constituencies. Instead of short-sightedness, there should be
greater understanding of each others difficulties and a spirit to
help each other sell agreed strategies to our respective
memberships. But the process of consensus cannot override the
pressing realities of what needs to be done.
This is not the time for theoretical ideological debates and
blaming each other for thewoes this country faces. We must always
remember that business, government and labour areunited in the
common goal of growing the economy much faster for the benefit of
all SouthAfricans. It will be necessary to look dispassionately at
which strategies will work touplift the poorest in our country and
focus on long-run development. We have to bepragmatic and get on
with the job.
While maintaining an understanding of constituency concerns,
there is a need for acommon vision which focuses on the interests
of the nation. The critical challenge thatfaces the Nedlac partners
in the year ahead is to arrive at this common strategic visionand
to show the leadership necessary to implement it.
Government has a key role to play in the Nedlac structures as an
active participantthat treats its social partners equitably, and
must be even-handed between all interests -including those millions
outside the Nedlac process. There is a strong perception outthere
that labour has an undue influence on government on crucial policy
matters, evenwhen the policies advanced are clearly out of step
with international norms.
Whether it is the case or not, perceptions fuel uncertainty in
the business sector,both local and abroad. This has a detrimental
impact on investment decisions. Foreigncapital, without which the
desired 6% growth rate is unobtainable, is free to move tomarkets
around the world. South Africa must, therefore, create an
investment environmentsufficiently attractive to compete with other
developing countries for this capital.
Government should play the role of leading partner in Nedlac
responsible for initiatingpolicy positions for discussion. The
recent tension over growth strategies introduced bythe other social
partners must be seen in the context of heightened uncertainty
abouteconomic policy. The urgency of placing the attainment of more
rapid growth at the top ofthe agenda is undeniable. Business
eagerly looks forward to the government's nationalgrowth and
development strategy, which should rightly lead the debate.
The task of sequencing measures and, more importantly, nurturing
realisticexpectations, will be a difficult one. It will require
careful monitoring mechanisms andcriteria to judge performance, and
a national campaign to inform citizens accordingly.Failure to
balance the needs of delivery with the need to become a
competitiveinternational player will lead to socio-political
instability that will consign our bestefforts to the scrapheap of
history.
A challenge for the Nedlac structures will be to contribute to
this process.
The matters addressed by all four chambers are integrated by
their nature, and Nedlacneeds to ensure that all recommendations
that emerge are consistent with, and contributeto, the growth and
development objective. In this respect, the year ahead requires
thatthe challenge of internal coordination within Nedlac itself be
met.
Furthermore, for effective participation in the various Nedlac
structures, moreconcerted effort is needed to maintain continuity
of representation at a level whichallows substantive dialogue to
take place and decisions to be taken.
During the year all the chambers have been confronted with broad
agendas, and it is nowtime to focus on key achievables and
prioritise issues within the framework of a commonvision for the
growth and development of the nation.
Clarification of the relationship between Nedlac and parliament
is another area thatwill have to be addressed. Business has always
recognised that Nedlac should not andcannot usurp the role for
which Parliament was democratically elected. Nedlac must beviewed
as a body which enhances social and economic discussion, and one
which facilitatesgovernance without impinging on the government's
leadership role.
While Nedlac may have a role in expediting the drawing up of new
legislation, care mustbe taken in the setting of appropriate
timeframes. Artificial deadlines are likely toresult in suboptimal
proposals being forwarded for Parliament's consideration.
What are we as business doing? It is important not to
underestimate the important rolethe domestic private sector has
already been playing in achieving our vision of a growingeconomy.
Fixed investment is the engine of growth, and there has been growth
in domesticprivate sector fixed investment in real terms of over
32% since early 1993. This is equalto 41% of the increase in GDP
over the same period, and bears simple testimony tobusiness's
commitment to the new South Africa. Private sector fixed investment
as apercentage of GDP stood at 14,5% at the end of 1995. This is
higher than the average levelover the last three decades and
nearing the historical peak of about 15,5% in the early1980s.
Nevertheless, much higher levels of fixed investment will need to
be encouraged toachieve a 6% target growth rate.
Business recognises that there is room for further involvement
in the economy. Theseare exceptional times in our country, and to
achieve the growth required, business must gobeyond its traditional
role. We must rise to the challenge of our function
aswealth-generators in an ever more competitive global economy,
while ensuring that thedevelopmental needs of the nation so
critical for socio-political stability aremeaningfully addressed
through growing employment opportunities.
Business is currently exploring its role in addressing the
country's needs in training,research and development and
infrastructure investment. At an enterprise level, along
withlabour, we must address the challenge of increasing
productivity to internationallycompetitive levels. This must
involve critically evaluating our management practices,reviewing
workplace strategies, addressing our internationally uncompetitive
costs ofproduction, and, above all, working together to manage the
inevitable challenges ofrestructuring.
Again, along with labour, we must play the critical role as
representatives of ourrespective constituencies while never losing
sight of the needs of those presently outsidethe formal
economy.
Our country's remarkable transition to democracy has been
referred to as a politicalmiracle, but it was achieved through the
coming together of positive energy, hard work anda vision for a
better South Africa. That same spirit of consensus-seeking was the
catalystfor the establishment of Nedlac a little over a year ago,
bringing together all thestakeholders of our society to address the
critical challenges of growth and development.
This summit comes at a time when we must remind ourselves of
what can be gained throughcooperation. It comes at a time when the
nation and the world are yearning for decisiveand visionary action.
Nedlac has a vital role to play in achieving this goal.