Johannesburg, 23 May 1990
Nelson Mandela addressed a conference convened by the Consultative
Business Movement on the theme: "Options for Building an Economic Future." Over
300 executives attended the conference.
We would like to thank the Consultative Business Movement most sincerely for
taking the initiative to convene what is for us a truly historic conference. The
mere fact that it is taking place sends an important signal about the need for
all South Africans to get together to determine the destiny of our common
Recently, I had occasion to read an advertisement inserted in the British
press by the Anglo American Corporation. It begins by quoting various clauses of
the Freedom Charter, which have to do with job creation and the provision of
food, housing and education. It then poses the very important and correct
question - "If the South African economy doesn`t deliver, how can any politician
That, in a sense, encapsulates the significance of this conference. Both of
us, you representing the business world and we a political movement, must
deliver. The critical questions are whether we can in fact act together and
whether it is possible for either one of us to deliver, if we cannot and will
We hope that the fact that we are meeting here signifies that there is a
common acceptance among us that we necessarily must cooperate to ensure that the
people do indeed enjoy a decent standard of living, in conditions of freedom.
To establish a system of cooperation requires that we should at least share
some common objectives. But it also means that we have to overcome the mutual
mistrust that, to some degree, undoubtedly exists between us. We do not have to
elaborate the reasons for that mistrust. As South Africans, we all know that
they emanate from the fact that on one side of the street are the haves, and on
the other, the have-nots; on one side, the whites, and on the other, the blacks.
The interaction that is taking place among us today - and hopefully, in other
encounters in future - should help in the process of identifying the common
objectives which should become part of a national consensus that will help to
bridge the enormous gulfs that separate the different communities in this
country. As we discuss, we hope that some of the mistrust will fall away. But,
of course, it will be in the process of the honest implementation of what would
have been agreed, that this mistrust would finally disappear.
Roots of bitterness
You will, I am certain, remember the nursery rhyme:
Baa! Baa! black sheep,
Have you any wool?
Yes sir, yes sir,
Three bags full.
One for the master,
One for the dame,
the little boy
Who lives down the lane.
Could it be that when the children composed this simple verse, they
understood that it was only the figurative black sheep that would, because it
was itself excluded, have sufficient sense of justice and compassion to remember
the little boy down the lane? Was it because they had seen in practice that the
white sheep apportioned only a tenth of its wool, or none at all, to the little
boy down the lane?
Many a time the martingales and deprived people whom we represent have posed
the same bitter questions that Shylock posed in Shakespeare`s Merchant of
"Hath not a Jew eyes? Hath not a Jew hands, organs, dimensions, senses,
affections, passions? Fed with the same food, hurt with the same weapons,
subject to the same diseases, healed by the same means, warmed and cooled by
the same winter and summer, as a Christian is? If you prick us, do we not
bleed? If you tickle us, do we not laugh? If you poison us, do we not die? And
if you wrong us, shall we not revenge? If we are like you in the rest, we will
resemble you in that... the villainy you teach me, I will execute; and it
shall be so hard, but I will better the instruction."
Questions such as these, whether about black sheep or the universal nature of
human pain and suffering, can only be posed by people who are discriminated
against, in a society that condemns them to persistent deprivation of the
material artefacts and the dignity that are due to them as human beings. We pose
them for the same reasons.
The bitterness of a Shylock, who threatens to execute and even better the
villainy which his persecutors have taught him by their example, is a feeling
that comes naturally to those who are hurt by systematic and systemic abuse. It
should come as no surprise that it lurks in the breasts of many whom this
society has considered and treated as disposable cyphers.
The issue we are addressing is the one of power and the uses and abuses of
power. Those among us who are white come from that section of our population
that has power, and, in a sense, total power, over the lives of the black
people. Nothing within the sphere of human endeavour is excepted - be it
political, economic, military, educational or any other. Indeed, this even
extends to the right to decide who shall live and who shall die.
These may sound like harsh words, but the reality that is unseen inside the
boardrooms, by those who exercise power, across the length and breadth of this
country, is harsher still. The anger in the heart of Shylock is abroad in our
society. This is a fact to which we should be very sensitive, without any
attempt at self-deception.
Structure of political power
One of the fundamental issues that the process of transformation must address
is the question of the structure of power. Within the political sphere what has
to be done seems clear enough. I think we would all agree that we must have a
united, democratic and non-racial South Africa. The specific manner in which
this would be expressed in a constitution is something that will have to be
negotiated, preferably within an elected constituent assembly.
I think we would also all agree that every adult citizen should have the
right to vote and be elected into an organ of government. There should be an
entrenched and justiciable bill of rights, which should guarantee the
fundamental human rights of all citizens.
People should be free to form or belong to parties of their choice. There
should be regular elections so that the people decide who
should be on the driving seat. Power should devolve to lower organs of
government so as to ensure the broadest participation of the people in the
democratic process. I would like to believe that on these and other political
matters we are in agreeement. Such an outcome is important both in itself and in
order to create a situation of peace and stability. We should all accept fully
that the economy cannot deliver unless the political objectives we have outlined
All this, of course, addresses the issue of the structure of political power.
We are saying it must change radically. The cause of our discontent is, in part,
our exclusion from the exercise of political power and our consequent
condemnation to a situation of being the victims of the abuse of power. The
inclusion of all the people of South Africa within a genuinely democratic system
will therefore remove this particular cause of our discontent.
Deracialisation of economic power
But then, what about economic power? This, obviously, is one of the thorniest
issues that must be addressed. It is said that less than ten corporate
conglomerates control almost 90 percent of the shares listed on the Johannesburg
Stock Exchange. If somebody did any arithmetical calculation, he or she would
probably find that the total number of people who sit on the boards of these
companies as directors is far less than one thousand. These will almost
exclusively be white males. If you add to this the fact that 87 percent of the
land is, by law, white-owned and is in fact occupied by a minority even among
the whites, then the iniquity of the system we have all inherited becomes even
If we are genuinely interested in ending the old social order and bringing in
a new one, characterised by the notions of justice and equity, it is quite
obvious that the economic power relations represented by the reality of the
excessive concentration of power in a few white hands have to change. We make
this demand not as a result of any imperative that might be said to derive from
ideological convictions. We make it because we cannot see how it would be
possible to pull our country out of the economic crisis, in part caused and
exemplified by white control of economic power while, at the same time, we
perpetuate this power structure.
It might be said that international experience shows it is wisest not to
tamper with this power structure. The argument is made that the sanctity of
private property, and the incentive and dynamism that derive from private
ownership, should convince all of us to accept, if not welcome, this economic
power structure as a fact of life. What we would like to say is that, while we
look at economic models and study the experiences of other countries, we should
not forget that we are dealing with South Africa, with its own history, its own
reality and its own imperatives. One of these imperatives is to end white
domination in all its forms, to deracialise the exercise of economic power.
If we are agreed about this objective, as it affects the economy, then, I
trust, we can begin a serious discussion about how it should be achieved. It
would seem to me necessary that this discussion, vigorous though it has to be,
should not be conducted in a manner which makes healthy debate impossible. We
would therefore have to avoid throwing epithets at one another, questioning one
another`s capacity to think, or challenging one another`s good faith.
Issues to be addressed
I am not going to present any argument about nationalisation. I would however
like to share a secret with you. The view that the only words in the economic
vocabulary that the ANC knows are nationalisation and redistribution is
mistaken. There are many issues we shall have to consider as we discuss the
question of democratisation and deracialisation of economic power.
One of these is whether we should not draw on such lessons as we might learn
from the anti-trust laws of the United States or the work of the Monopolies
Commission in Great Britain to address the issue of how to ensure that there is
no unhealthy over-concentration of economic power. The application of those
lessons would of course have to take into account the economic realities of our
own country which might dictate various optimal sizes for different firms.
The factors that would have to be considered would include the necessity to
achieve economies of scale, the capacity to generate the necessary critical mass
of investible funds, the strength to compete successfully on the international
markets, the ability to participate in serious research and development, and so
Another issue we might have to consider is the advisability or otherwise of
the placement on the boards of privately owned companies of directors appointed
by the government, to see whether it is possible to balance the pursuit of
private gain with the need to promote the common good.
I would also like to stress that we do not want to have everything done by
the new government. A healthy relationship between employers and trade unions is
crucial to the country`s future. We agree with the view that progressive labour
legislation, allowing strong unions to carry out centralised bargaining, will
help to solve many important issues. The question of a living wage, job security
and industrial restructuring must be dealt with in the bargaining process.
Yet another question we might consider is whether there are no areas in which
it would benefit society at large if the state established public corporations
or strengthened existing ones. One of these areas might be housing, where it
seems clear that there is an urgent need for vigorous state intervention rapidly
to expand the country`s stock of habitable accommodation. Another area is
suggested by the need for state encouragement of small and medium business as
well as the cooperative sector, especially as there is a crying need for the
multiplication of economic activities that will lead to the creation of new
We might mention at this point that we are firmly opposed to the process of
privatisation on which the government has embarked. It seems to us eminently
wrong for the government to engage in this important restructuring exercise
precisely at the moment when the whole country and the world expect that
fundamental political change is in the offing. It would seem only reasonable
that so important a question as the disposal of public property should be held
over until a truly representative government is in place. Additionally and
inevitably, the process of privatisation cannot but reinforce the economic power
relations which we assert have to be changed.
As we have said, the land question must also be addressed within the context
of the restructuring of the old economic power relations. Recent state actions
to sell state land and to evict people from white farms are entirely unhelpful
to these purposes. Before anything else is done, the racist and discriminatory
land acts have to be repealed. Furthermore, serious discussions and planning
must take place involving the rural people and their representatives, the
democratic government, those who own land, and the country as a whole, so that
we can all address the related issues of making land available to the
land-hungry masses, while ensuring the necessary increases in the production of
food and agricultural raw materials.
We still believe that there must be further discussion of the issue of
nationalisation of assets that might at the moment be privately owned. The ANC
has no blueprint that decrees that these or other assets will be nationalised,
or that such nationalisation would take this or the other form. But we do say
that this option should also be part of the ongoing debate, subject to critical
analysis as any other and viewed in the context of the realities of South
African society. It should not be ruled out of the court of discussion simply
because of previous bad experience or because of a theological commitment to the
principle of private property.
We are very conscious of the critical importance of such matters as the
confidence in the future of both the national and the international business
communities and investors. We accept that both these sectors are very important
to the process of the further development of our economy. We can therefore have
no desire to go out of our way to bash them and to undermine or weaken their
confidence in the safety of their property and the assurance of a fair return on
their investment. But we believe that they too must be sensitive to the fact
that any democratic government will have to respond to the justified popular
concern about the grossly unequal distribution of economic power.
There should be no debate among us about the centrality of the issue of
ensuring a rapidly growing economy. To ensure a rising standard of living the
gross domestic product must grow at rates that are higher than the rate of
growth of the population. Various figures have been thrown around about the
possible and desirable rates of growth. This conference will obviously not have
the possibility to look at these figures and to study their macro-economic
Economic growth and equity
But, of course, the issues, about which I am sure we are agreed, of the need
to generate significant domestic savings, to attract substantial foreign
investment and to keep the rate of inflation reasonably low, are central to the
discussion of the question of economic growth. Perhaps there are only three or
four points we should raise at this stage.
One of these is that we are concerned at persistent reports that some of our
own domestic companies have been and are involved in a process of exporting
capital from this country. We cannot sit here, verbally welcome the prospect of
democratic transformation, talk of the need rapidly to develop the economy, and
at the same time reduce the means that would make such development actually
The second point is that it is important that we should stop propagating the
gloomy picture of a South Africa that, as it is said, will inevitably sink into
the economic crisis that afflicts many African countries.
The third is that it seems obvious that the democratic parliament, together
with the public at large, should elaborate a macro-economic indicative national
plan to provide a framework within which to determine the directions of growth
policy. We are saying, in other words, that the process of growth cannot be left
to develop spontaneously because it would ineluctably result in the structural
distortions and imbalances which have to be corrected.
In this connection, we should all accept the reality that growth by itself
will not ensure equity. A situation could develop in which, in terms of levels
of income, we continue to have a persistent gap between the haves and have-nots,
despite any increase that may take place in the standard of living of the other.
I am therefore raising the question that the matter of the redistribution of
wealth in conditions of a grnuine economy, is one that must be faced squarely
and addressed firmly. I am sure it is common cause among us that the very fact
of an expanding market, resulting from the process of wealth reaching those who
were formerly deprived, is itself a condition for and an engine of economic
We are of course all concerned about the need generally to raise the level of
education of all our people and in particular rapidly to increase the numbers of
black engineers, technicians, artisans and other skilled persons. This would of
course make a decisive contribution to the critical issue of the level of
productivity in the economy as a whole. It would also place the issue of the
relative and absolute increase of income accruing to the black section of our
population within the context of expanding national wealth, in whose expansion
they would have played an important part.
The penultimate issue we wish to raise is the matter of public spending.
There can be no doubt that the public finances will come under enormous pressure
for increased spending on education, housing, health, unemployment benefits,
pensions and so on. It should be commonly agreed among us that the democratic
state must indeed have a responsibility to provide this material cushion, at
least to protect the most disadvantaged.
Certainly, the present-day apartheid absurdity must be addressed whereby
public per capita social spending on the whites is at least six times higher
than on Africans. However complicated the economics of bridging this gap and
instituting a rational system of social welfare which actually increases social
welfare, something will have to be done in this area as a matter of urgency.
Indeed, we could say that even now, as we enter a period of transition, it might
be necessary to establish mechanisms by which those who have been excluded from
power play a role in determining the disbursement of public funds.
The concerns that have been raised with regard to the capacity of the tax
base to carry a vastly increased state budget are of course important and
legitimate. But in a situation of rapid economic growth such as we have spoken
of, it would be necessary to review the system of taxation. The aim would be to
reduce the burden of direct and indirect taxation on sections of the community
least capable of looking after themselves and to shift more of the load on to
the corporate sector without, of course, producing a situation of diminishing
But obviously enormous savings will be made as a result of the abolition of
the multi-headed hydra represented by the various apartheid administrative
structures. Defence spending will also have to be reduced radically as a result
of the thinning down of the defence establishment, a process which must also
lead to the conversion of military production facilities to civilian needs.
We would also be of the view that we should build a state system which does
not seek to administer the lives of people as though they were wards of the
state. The situation should therefore be fought against in which there would be
a bloated and unproductive civil service.
Apartheid system must go
The democratic project in which we are all interested cannot succeed unless
the economy can deliver. The reality is that the economy is in a terrible
crisis. Unemployment is increasing. Black employment is the same now as it was
ten years ago. The rate of investment in fixed capital is decreasing. Inflation
is high. There is no prospect of getting out of the morass while the apartheid
system of white minority rule remains in place.
The international community would like to come back as an interested
participant in the creation of a society which can serve as an example in terms
of the solution of the race question and the institution of a healthy system of
race relations. For us to be able to persuade the world that it must invest in
South Africa, that it must extend aid to us, that it should agree on a Marshall
Aid plan, we must be able to report to the nations that white minority
domination is no more. We must also report that all the people of South Africa
are working at the building of a national consensus which will ensure that never
again will our country be torn apart by the criminal divisions which the
apartheid system imposed on all our people.
In the direct interest of the lives of all our people this system must go
now. None of us can afford a delay which will lead to the further destruction of
the economy and the heightening of social tensions and conflict. We believe you
have as much an obligation as we have to bend every effort to ensure that a
democratic political system is instituted without delay.
The effort to build the new means that we abandon the old. The Nationalist
Party, responding to the failure of its grand design, is taking the first steps
in the process of abandoning apartheid ideology. The change in our overall
reality has made it possible for us all to move towards a just political
Think about future in new terms
We need the same transformation in the economic sphere. You, as businessmen
and women, have the obligation to engage in this process. I hope that you are
able to abandon old ideas and think about the future in new terms. Once such
ideas are born, we know that you will have the courage to act on them.
In this manner, we could begin to shape our economic and political destiny in
the interest of justice, peace and progress. We trust that you will consider
this carefully and reflect on the question - what are you prepared to do for
your country, rather than what your country can do for you.
We hope that what we have said might assist in the process of building a
national consensus on the direction we have to choose in order to end the agony
of apartheid and racism, of poverty and deprivation, of internal conflict and
The people who are dying in Natal, the injured of Welkom, the people who are
being evicted from the farms in the Western Transvaal, the millions of the
unemployed in the towns, cities and the countryside, demand a solution. All of
us present here have an obligation to use the levers of power and influence we
hold in our hands to ensure that the new day dawns now.
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