Oil: It’s not just about the money


What happened in those countries outside of the Middle East in which oil was found? The countries in Africa, which collectively form the world largest oil producers after that region, for example. The top oil producing country in Africa is Nigeria which produces 2.2-million barrels a day, making fourth largest exporter of oil in the world. 

This question arose late after supper among some journalists who were in Abu Dhabi as part of the Emirates Centre for Strategic Studies and Research (ECSSR), which was celebrating its 20 anniversary. The initial question that prompted it was, ‘How did the United Arab Emirates (UAE) become such a successful nation?’

The casual response was, of course, oil money. But as Acemoglu and Robinson point out in How Nations Fail: The origins of Power, Prosperity and Poverty ‘the windfall of wealth has done little to create diversified modern economies in Saudi Arabia or Kuwait’. One of the reasons the authors give for nations failing is the lack of a diversified economy. So why did it work for the UAE? Another response was that the UAE wasn’t a nation but actually a very large – and very successful – corporation, but that dodges the question.

Abu Dhabi had changed since I was last here more than 20 years ago. It looked the same: lots of new buildings, just more of them. The driver, with the zoned-in attention of a fighter pilot, swept from the airport along the broad highways and through the empty streets to drop me at the hotel as the sun rose harsh and fast. Dawn lasts an instant here on the far edge of the Empty Quarter.

The Centre, which has the backing of the Crown Prince of Abu Dhabi, Sheikh Mohammed bib Zayed al Nahyan and who is the Centre’s president operates as a sort of microcosm of the United Arab Emirates: an efficient, fully resourced and effective corporate entity. Its mission, said Dr Jamal Sand Al-Suwaidi, director-general of the centre, is ‘to support national decision making and serve both the UAE and GCC societies’.

Al-Suwaidi emphasised that the UAE is where it is because of its ‘clear strategy and methodology’ that was amply supported by the ‘quality of the management and the thoroughness of the research of ECSSR. The think-tank has produced more than 1 000 publications, hosted more than 800 events and published more than 20 000 of research papers in the fields of politics, economy, military, security and social studies. In short, it forms part of the inclusive political institutions required to make a nation successful.

How do the oil producing nations in Africa then measure up?

Historically, the UAE grew out of what were referred to in the 1850s as the “Trucial Sheikhdoms”, the majority of which now comprise the seven entities that make up the UAE. Earlier in the 1800s, the tribal leaders of the region reached an agreement with Britain to counter the piracy that interfered with their lucrative trading routes to India and the rest of the world. In return, Britain would provide protection against land or sea invasions — and pirates. Once oil was discovered in the 1960s, first in Abu Dhabi, the leaders realised they needed to present a more united front, and formed the Trucial States Council. At the time it included Bahrain and Qatar.

In 1968, however, Britain decided it could no longer afford to provide the protection it had agreed to and in 1971 they withdrew. Sheikh Zayed bin Sultan Al Nahyan, the ruler of Abu Dhabi gathered the Trucial States Council and attempted to form a federation. It failed; Qatar and Bahrain became independent and the regions most powerful leader (and the father of the man behind the ECSSR), the Sheikh of Abu Dhabi then persuaded his counterpart in Dubai to form a union. But first, he stipulated, they must draw up a constitution. The plan was then to invite the five other states to join them, which they did in 1971 (with Ras al-Khaimah coming to the party a few months later).

This matter of drawing up a constitution is an important point. Acemoglu and Robinson point out that in order for nations to succeed its citizens must “trust the institutions and the rule of law that these generated”. Such institutions – economic or political – they term inclusive as opposed to extractive: to be inclusive, “economic institutions must feature secure private property, an unbiased system of law, and a provision of public services that provides a level playing field in which people can exchange and contract; it also must permit the entry of new businesses”.

And here innovation is integral to success, and innovation is “made possible by economic institutions that encourage private property, uphold contracts, create a level laying field, and encourage and allow the entry of new businesses that can bring new technologies to life”.

Extractive institutions are exactly what they say they are: as Robinson put it in a debate with Paul Collier, they are, “those which are designed to extract resources and income from some people and transfer them to other people”.

Nigeria gained independence in 1960 and oil production started in the 1950s. Despite the enormous wealth that oil brought to the country, not much of it benefited the citizens as corruption and venery saw the money channelled into personal bank accounts. In other words, it was an extractive system. This is, however, beginning to change and it’s because the political institutions are becoming inclusive. Military dictatorship finally came to an end in 1999 — as Simon Allison says, there had been a “few other attempts [at democracy] in Nigeria’s post-colonial history” — when a core group of military officers and civilian allies, oversaw the transition from military to civilian rule. It was the culmination of a four-year process and saw Nigerians break with their British colonial heritage and adopt an American-style constitution. The country has since had held three national elections.

In the previous extractive system, for example, there would be no investigation as there currently is into the alleged $49.8-million that went “missing” from the sales of crude oil between January 2012 and July 2013, which was supposed to be remitted to the federation account by the Nigerian National Petroleum Corporation (NNPC). (This trend towards inclusive institutions maybe reversed, however, given the recent firing of the Governor of the Central Bank of Nigeria.)

Ottoman colonialism, which by 1566 covered North Africa from Tunisia to Egypt, the entire Arabian Peninsula and Iraq, imposed highly extractive institutions. The Ottomans were succeeded by the British, and while it was still an extractive system it allowed a greater deal of independence. But most of the Middle East and North African countries after independence simply continued the extractive system; the only difference this time was that it benefited an indigenous select few. The effect of these extractive economies eventually led to the series of anti-government protests – the so-called Arab Spring – that began in Tunisia in 2011 and spread across the Middle East.

Why Nations Fail claims that the high levels prosperity in successful modern societies rests upon those nation’s political institutions. It points out that investment and innovation work to generate prosperity only if they believe their successes will not be appropriated by the powerful. This assurance, they maintain, can only come from a centralized democracy.

Inclusive institutions are those that allow sustained economic growth, technological innovation and capital accumulation. Acemoglu and Robinson state that, ‘economic institutions… are those that allow and encourage participation by the great mass of the people in economic activities that make the best use of their talents and skills and that enable individuals to make choices they wish. Innovation is crucial because talent and skill is spread throughout society and there is no way these talented skilful can flourish in an oligarchy operating a system of extractive institutions.

UAE does not qualify, strictly, as a democracy. The last elections held in 2011 involved 129 000 “selected” voters (male and female) who could vote for 20 members of the 40-member Federal National Council (FNC), an advisory assembly with very limited parliamentary powers. So, while the concentration of political power is characteristic of extractive economic institutions, the difference in the UAE is that political power is not only spread among seven members but, more importantly, it is also centralised.

And it does have a strong justice system. The Norway-based Global Network for Rights and Development (GNRD) 2013 annual International Human Rights Indicator (IHRRI) ranked the United Arab Emirates “first among Arab countries and 14th globally for respecting human rights — six points ahead of the United States (20th overall).

Abu Dhabi controls the majority of the UAE’s hydrocarbon wealth: 95% of the oil and 6% of the gas. Yet, due to a vigorous (and well-funded) economic diversification strategy non-oil and gas GDP — manufacturing industry, real estate, tourism and retail — now comprises 64% of the UAE’s total GDP. Its founder had a development vision, much of which is reflected in the establishment of the ECSSR that focused Al-Suwaidi said was on “establishing innovation and creativity” that supports the overall development of society. It is in other words, an inclusive system.

The same cannot be said for the other four top producers in Africa. Algeria is second, producing about 2.1-million barrels a day and number five in terms of world exports. It gained independence in 1962 after a bitter 12-year war against the French colonialists.

Algeria felt the rise of the Arab Spring and in 2011 President Abdelaziz Bouteflika’s government lifted the 19-year state of emergency and promised the 2012 parliamentary elections would mean a real step towards democracy. The elections, however, showed markedly low turnout but it did see the establishment of 23 new political parties and new rules that preserved 30% of the places on the candidacy lists for women (this has led to 145 women gaining seats in parliament). But overall Algeria has largely preserved the political status quo in polls and remains an extractive system.

Third is Angola — one of Africa’s richest countries — with 1.9-million barrels per day pegging them at seventh in the world, yet a third of Angolans exist on les than $2 a day. Angola gained independence in 1975 and since 1979 has been ruled by José Eduardo dos Santos.

An example of how an extractive system works, say Acemoglu and Robinson, would be to look at the daughter of Angola’s president Isabel dos Santos, who according to Forbes, is “the wealthiest woman in Africa”. Forbes also claims, “every major Angolan investment held by dos Santos stems either from taking a chunk of a company that wants to do business in the country or from a stroke of the president’s pen that cut her into the action”. That stifles innovation.

Libya, which gained independence in 1951, produces 1.7-million barrels per day and exports about 1.2m of that. It comes in at fourth. It is currently engaged in a destructive civil war, which started in 2011 – part of the Arab Spring – after the overthrow of Muammar Gaddafi, who had ruled the country for 42 years. It remains mired in conflict. And, finally, in fifth position is Egypt, producing 680 000 barrels per day. It gained independence in 1922.

South Africa is 10th on the list of African oil-producing countries (roughly 191 000 barrels of oil every day). We inherited an extractive system (20% [whites] took resources and income from 80% [blacks]) and its slow to come around. The constitution has been challenged and the rule of law flaunted in numerous cases. On top of that we have cut back on important research and development that is required to increase our international competitiveness in science and innovation, The goal of raising R&D spending to 1% of gross domestic product (GDP) by 2010 was not been achieved and according to the National Survey of Research and Experimental Development 2009-2010, we invested only R21-billion (US$2.3 billion) in R&D over that period. This equals 0.87% of GDP in 2009-10. Not only that, but this was the third consecutive year that research funding as a percentage of GDP had dropped: 0.93% in 2007-08 and 09.2% in 2008-09. It is doubtful that we will meet our target of 2% GDP spending on research by 2018.

Think tanks are not a luxury. They are a prerequisite if a nation is to “adopt a strategic approach to forward planning” and be able to provide support to government decision-making processes.

As Robinson points out, nations locked into extractive institutions are not there for reasons of stupidity or ignorance. It is, they say, about the “conflict of interest of people who control power as politicians or as leaders or business leaders or whatever of the country, are having their preferred policies imposed on society, even if it’s not good for society”.

Organisations, such as the ECSSR — and locally the sadly now defunct Institute of Democracy in Africa (Idasa) — provide input into the political and economic institutions of governance, from training government cadres, to organizing seminars and creating the avenues for dialogue among decision making bodies. In addition it provides extensive and intensive analysis of local, regional and international events that potentially may affect the UAE. And where political institutions are inclusive, this sort of research is incorporated into the vision for the nation, rather than simply providing lip service — another extractive forum — for entrenched rulers.

Robinson goes on to say that leaders who rely on extractive systems are best termed “political losers” – leaders that are only interested in their own bottom line. “Many of the fundamental transformative technologies and many of the institutional changes that unleash economic growth throughout history have come together with changes that weaken the political power of rulers. And that’s why they’ve been resisted by rulers.” And that’s why we have to guard against political losers holding power.

[This first appeared in Daily Maverick http://bit.ly/1lEwegw]


Disappointed idealists or just plain cynics?

Last year, I gave talk to a group of international managers at their company’s annual conference in Cape Town. They came from Morocco, Egypt, Turkey, Poland, Rumania, Lebanon, France and, of course, South Africa. Their company has invested heavily in South Africa. I spoke, in my personal capacity, about the country. Only two of the managers present had any experience and knowledge of this country.

I provided some personal background. On my father’s side of the family, I am second-generation born in Southern Africa, and fourth generation on my mother’s side. I was born in Zimbabwe—then called Southern Rhodesia—and, after Ian Smith’s Unilateral Declaration of Independence, we moved to Zambia. Eventually, my parents moved back to South Africa, where I finished my high school and university. In the early 1970s, every white South African male was required to serve in the South African Defence Force. I refused and left for England.

Two years later I found myself in the Sudan, working as an English teacher in a high school just north of Darfur province. I then joined the Omdurman Islamic University—the first non-Muslim academic ever to be hired by the institution. Eventually, I ended up as the Sudan field director for an NGO. When I left the Sudan, I returned to London for a few years and subsequently lived in Greece and the USA before returning to SA in December 1995. I had been gone 20 years.

South Africa was now a democracy. It was the beginning of a new story. South Africa has many stories. But too often they are simply and easily reduced to the 46 years of apartheid and the struggles against it. And now it is also true that the story is being reduced to the 16 years of democracy and the struggle to maintain it. Or not.

But, one of our writers put it, there are other stories as “stories as interesting and even more revelatory of the dilemmas of the 20th and 21st century.”

Archbishop Desmond Tutu used the phrase “rainbow nation”—a metaphor that meant many things and I covered some of the factual numbers. We are a nation of 50-million people. 39.6-million blacks (almost 80%); 4.6-million whites, 4.4-million coloureds and 1.3-million Indians—or rather descendants of people of Indian sub-continent. The black population is divided into four major ethnic groups, speaking nine languages. There are numerous subgroups of which the Zulu and Xhosa subgroups are the largest. The majority of the white population is of Afrikaans descent (60%), with many of the remaining 40% being of British descent. The coloured population—the term used for mixed race people—mostly speak Afrikaans. Almost 15-million people are aged between 15 to 29 years old.

This is important.

What is also important, I told them, were two names, which they should remember: Julius Malema and Tokyo Sexwale.

What’s changed?

So what makes South Africa today so different from South Africa 20 years ago? Let’s look at the details, the small things against which we can measure individuals. Yes, we have the world’s most comprehensive constitution; yes, we have democracy. But what about at a personal, everyday level?

Our national sportsmen and women are on tour in the rest of the world.

Our ballet, opera and stage companies are filled with black and white performers as are the audiences.

Big international acts come our way.

Our restaurants are up there in the World’s 50 Best Restaurant’s list

Our winemakers and their wines are welcomed abroad

Our beaches are packed. (When I left SA, most of the public beaches were reserved for “Whites Only”. Hard to believe, yes, but it was so.

And we hosted the FIFA World Cup 2010. Did that benefit us? (Of course not. It is an event designed for the benefit of FIFA.)

Our writers, artists and musicians are globally recognised—Vusi Mahlasela played in New York city at John Lennon’s remembrance party in October.

What else is different? The current question at dinner parties in South Africa is whether we will see development or decline in the future. But let’s put that in perspective

The economic situation in SA from 1980 to 1994 was one of prolonged and steep decline.

The 16 years that followed the advent of democracy have been called “the second golden age”.

But what now?

There are 283 municipalities.

In 2008/2009, 89 received disclaimers or adverse opinions for their annual audit.

An additional 36 could not finalise their audits.

In 2010, 57 municipalities got disclaimers and adverse opinions.

An additional 47 failed to finalise their audits.

There used to be 21 civil engineers for every 100,000 people in the municipalities. Today there are three for every 100,000. This was largely due to the passing of the Municipal Systems Act in 2000. The Act allowed mayors—an elected position—to govern in secret with a hand-picked executive committee. The ANC used it to “deploy”—i.e. find jobs for—its loyal followers. Zuma has now set about dismantling that structure to ensure municipalities are run by professionals.

There are only 800 anaesthetists working in the country.

We train 30 surgeons a year when the medical system needs a minimum of 120

We are bottom of the log in maths, maths literacy and science in our schools out of a sample of 133 countries.

80% of our schools are dysfunctional yet we spend 6.1% of our budget on education, much more than many other nations.

We have become a conduit for money laundering, the drug trade and human trafficking.

We have more than our fair share of murder and rape.

Another country

Let’s tell the story of an African country, I said. Let me describe a country to you and you tell me whether this is taken from fiction or reality and whether it is the the future, the present or the past. Here’s some pointers about this “country” I want you to imagine:

This country’s capital is the hub for the largest African airline.

It’s ports are served by fleets of ocean going liners.

There is an efficient railway network that connects it to its neighbours and which carry trade.

Publishers launch tourism travel guidebooks to the country which run to more than 800 pages long and lists hundreds of smart guest houses and things to do.

The game parks are vast, with plenty of game and accessible.

The country’s road network—more than 120 000km of it—is extensive and clearly marked maps are readily available in book shops.

The bus system covers the country and the buses run on time.

The country has vast areas of rich agricultural land.

The country’s education system produces some of the continents finest experts.

The country has unmeasured deposits of diamonds, gold and other minerals.

Fact or fiction?

Does such a country exist on the African continent?

Is it a future projection of what we’d like to see?

Is it a description of the state of the South African nation today?

Well, it’s fact, for starters.

Some of you may recognise the country about which I am talking. And no, it is not present day South Africa (though it could be). The country I have described is what the Democratic Republic of the Congo (DRC) was in 1960.

Between 1965 and 1997, this country I have described—the DRC—was run by Mobutu, a man who developed the cult of the personality and presented himself as a god-sent saviour for the country. He was assassinated in 1997 and Laurent Kabila took over. He in turn was also assassinated, and in an ironic salute to the country’s name, his son Joseph was installed as President. Elections were held six years later at a cost of US$500-million (paid for by the USA and the EU) and Joseph was installed as the legitimate elected leader.

Today, the DRC is a little different.

It’s airline is now dilapidated and unsafe.

It’s ports are unused.

The railway system has entirely collapsed.

There are no tourist guidebooks and there are no tourists.

It’s game parks are run down. People who have been there speak of the eerie silence of the forests. Everything has been hunted for food. There are not even the sounds of birds.

It has less than 1 000km of passable roads and those must be traversed in a 4×4.

It has no bus system.

More than 17% of the population are malnourished and 10% of the urban population. The rural people live on cassava, the staple diet, low in nutritional value.

The education system has collapsed.

It still has vast mineral wealth. But that is not going to solve the economy of the country. Think about cobalt. There are vast reserves being mined as we speak. Mined by hand by extremely low-paid labourers, packed into sacks and trucked out the country and shipped out of South Africa’s ports to China where it is then processed.

And that is where the money is made.

None of the money stays in the DRC. The mining companies don’t pay taxes (they say that paying bribes is simply a form of tax).

Frog in the water

There is a scenario that everyone likes to quote, and I am no different. It is the story of the frog in a pot of cold water. It will sit there happily. Place the pot on a very light gas flame and the frog will continue to sit their until it boils to death because it is oblivious to the gradually increasing heat of the water.

The question we must ask is: are we the frogs in the water? The controversial financial advisor Robert Kiyosaki, the author of Rich Dad, Poor Dad, visited here recently. He was very popular. But when he was asked about future investments in the country he cited the story of the frog. It was not well received.

There are two problems with the question: Are we the frog in the water?

First, it is politically incorrect.

Second, to give a politically correct answer will be simply to avoid the issue.

Let’s look at some examples of why we may or may not be frogs. I was born in Zimbabwe. And though I left there when I was still a boy, people in South Africa—both black and white—often ask me if I think South Africa will become another Zimbabwe? Do I know the answer? No. But let me tell you three stories:

A few years ago, the then editor of a prominent women’s magazine—you know the kind, a very glossy, high fashion, lots of bling on every page—was at a very smart dinner for Gauteng’s elite and powerful females. Now, let me tell you about the Gauteng elite—named by the Unilever Institute of Marketing as “Black Diamonds”—they are wealthy, poised and powerful. At the dinner party was the Grace Mugabe, the wife of President Robert Mugabe. This was at the start of the “land reclamation” that Mugabe had launched against white farmers. The editor was seated at Grace’s table. During the evening, most of the black South African women approached Grace and praised her for what her husband was doing: taking back the land.

The second story is about a project I was working on about land reform in South Africa and its relation to small-holder farmers and food security. I was at a panel discussion chaired by the chairman of the Parliamentary Land Reform Commission. The audience was mostly young black students from the University of the Western Cape and the University of Cape Town. A film was shown in which two incidents of land reform were depicted.

One told the story of a group of people who had laid claim to land, which was not challenged. The claim was recognised and the group were now debating endlessly among themselves as to how it should be managed in the future. The second film was about a land claim that was challenged. A family living in Soweto claimed a 500ha piece of land north of Gauteng. The white farmer, whose family had been there for four generations challenged the claim.

One thing you must understand about land claims in SA is that the Land Reform Act of 1994 says that only land that was settled after 1913—the date when laws were passed to forcibly remove blacks off their land, can be claimed.

The white farmer said his family had bought the land from a local chief in the late 1800s. The black family said, no, they were there in 1913 and the land had been taken from them, not bought. They won. The white farmer said: OK, I have built a multi-million rand slaughter house on the farm and have a successful meat supply business. I will relinquish the land but leave me with the butchery and I will guarantee to buy your cattle and share the profits from the butchery.

The family refused. They visit the farm once a month usually on a Sunday for a picnic and the butchery has gone to ruin.

A student stood up and said that the white man should not have argued about the claim. I posed the question as to whether, given our limited land resources—and SA only has 11% of its land mass that is arable—wouldn’t it have made sense to negotiate with the white farmer, keep the land and butchery working (it provided employment) and that it was a matter of management of resources that was most important.

Well, I was shot down in flames. The chairman said he would not tolerate listening to another white man saying blacks could not farm the land and besides, it was not the management of the land that was at issue. Justice was the issue, and it was justice to give back the land even if it was not used for “20 or 40 years”.

Land reform is a very, very emotional issue in SA, and it is a potential time bomb.

The media in Europe and South Africa made much of the devastation and starvation that followed Mugabe’s land claims. However, some years on and Zimbabwe is producing 60% more food than it did before the land claims, mostly from small farmers who are moving back onto the land. It is also producing more tobacco than it did, again from small farm holders. Admittedly, the land is owned by absentee landlords mostly generals in the army. It’s reverted back to a feudal system, but it is feeding the nation.

So when you ask me are we frogs? Are we going to become another Zimbabwe?

I don’t know.

I do know that we need to ensure that our farms guarantee our food sovereignty.

So, what does it mean to be a South African and an African.

Even the word “African” is a big issue. I write opinion pieces for various corporations. Often they will want me to say: “African chartered accountants” when they mean “black” chartered accountants. I consider myself as an African. I was born here. My father’s father was born here; my mother’s grandfather’s father was born here. I have lived on the continent for more than two thirds of my life. This is my country.

We must make it work. One of the common arguments made by African apologists is that Africa was colonised and that the destruction is still being felt. The usual argument against this is to point to the Far East. Much of this argument is well-covered in Tim Butcher’s two highly recommended books: “Blood River” and “Chasing the Devil”.

The Malaysia scenario

Malaysia was colonised for centuries, including by the British, who, true to form were cruel and racist. It got independence in 1960 (about when the Congo became independent). It was also drawn into the Cold War. But Malaysia got through it. The Congo and much of Africa did not. Malaysia is a successful country, part of the bigger world.

The Hong Kong scenario

Also colonised by the British for centuries. Freetown in Sierra Leone has a natural harbour that is bigger than Hong Kong’s; it has raw material nearby, and it lies dormant; Hong Kong traded. Trade made for more trade. It prospered. In Sierra Leone trade led to rivalry, stagnation and ultimately a bloody and vicious war. Why?

So, is Africa doomed? I don’t know. I do know that there are many young people of all colours who are making it work. I have a friend. He’s white, he’s in his late 20s and he makes music videos. His friends are mostly black because there’s is the sort of music he likes and he hangs out with them. When one of the band’s became successful, they asked him to make the music video. He did. He was over at the house of his friends—black—and he’s introduced to the father of the friend. This is the guy who made the video. The friend’s father—an ex activist—says, why didn’t you use a black guy? The kids just laugh and tell him he’s out of touch. We used him because he’s the best, says the son. End of story. This is the sort of thing that will make this country work.

I’ll tell you another story why I think it may work. I edited a magazine called The Big Issue. It’s a job creation scheme. We produced a magazine which is then bought by unemployed and disadvantaged people. They buy it for R7 and they sell it for R14. I had an internship programme, helping to train young wannabe journalists. I had two young guys and they wanted to write about restaurants and good stuff that was happening in the townships. I said OK, but I want you to write about new stuff, not the restaurants that everyone has written about—like Mzoli’s in Gugs. But they wanted to do the easy stuff, the stuff that had been done.

I looked out my window. There was a building going up about 100m away, and outside on the pavement were two black woman with a gas cooker and pots of food and they were preparing food for the building site workers. They knew they had a market.

I said to them: “Those women are entrepreneurs and they are doing food. Interview them/ eat the food. Find out what it takes for them to get their stuff there.”

That proved to be a great story.

And that’s my point. These are the people who do make a difference. In my very emotional moments, I think Africa—the world—will be saved by the women of the continents.

And then I think of Sarah Palin or Carla Bruno and I am not so sure it is a gender thing.

Where does our political future lie? And where will our cultural future go? Those are huge questions, but let’s take two very important people and talk about the political future. It will also go a long way to explaining our cultural future.

Julius Malema and Tokyo Sexwale. The two represent opposite sides of the political spectrum within the ANC. Both have presidential ambitions.

Julius Malema is the current president of the ANC Youth League (ANCYL) and has been likened by both black and white commentators as a “Hitler”.

Sexwale is a billionaire, a long-serving ANC political activist and is currently the Minister of Human Settlements.

The accusations against Malema are not just random comments. He has huge appeal to the young and the dispossessed. At an impromptu rally on the UCT campus, he drew more than 800 people, and his rhetoric was wildly cheered. The ANCYL claims it can bring 3-4-million voters to the polling booths for the ANC. He talks of nationalising mines and recently they have started targeting banks with their criticism. The arguments are at best flawed and at worst rubbish. But they stick. His notion of nationalising is closer to a form of fascism.

I mentioned that significant figure of nearly 15-million people in SA are between the ages of 15-29. They form the bulk of the unemployed and dissatisfied.

Let’s look at some other important statistics.

One third of the population is food insecure. i.e. they have no sure knowledge of where their next meal is coming from.

More than 25% of children under the age of six are malnourished.

Sexwale is an urban, smart politician. But he’s old school. He does command respect and he is a great orator, but he’s not a populist. He will have big business behind him and he does know how to negotiate with COSATU, the trade union body. When I left SA, he was sitting in prison on Robben Island.

Another consideration. The right to know versus national security. The government is making strong moves to restrict the freedom of the press. It’s most draconian proposal is the Protection of Information Bill, which has been almost unanimously condemned. The government is adamant it won’t back down but the law will basically enable any one within a department to refuse to release information on the grounds of “national security”. The critics of this Bill say it is being pushed through to protect corrupt officials. They say that the ANC’s national democratic revolution is no more than a national tender revolution.

Media Appeals Tribunal. A government appointed watchdog that will give government control of the news rooms through coercion and fear.

But these are relatively inconsequential matters when compared to the problem facing the judiciary. There are sustained and serious attempts to undermine the judicial system through the appointment of people better known for their political shrewdness rather than their legal acumen. People such as Dumisa Ntsebeza, an “influential member of the Judicial Service Commission (JSC) and plays a decisive role in who gets appointed”. He’s also very pro-Zuma.

Zuma reinforced this view of the undermining of the judiciary’s independence when he recently appointed Nomgcoba Jiba and Nomvula Mokhatla as Deputy National Directors of Public Prosecutions*. Another controversial move was his choice of director of National of Public Prosecutions Menzi Simelane, still a hotly debated issue.

Jiba’s husband, a lawyer, was apparently convicted on charges relating to him dipping into the trust fund of his firm of attorneys. The senior prosecutor who pursued the husband was reputedly Advocate Gerrie Nel who, it is alleged was targeted by Jiba in what was called “a personal and political” vendetta and an attempt at “what appeared to be a bid to disrupt the investigation into former national police commissioner Jackie Selebi”. Selebi was later convicted.

So what are our strengths weaknesses obstacles and threats? We cannot assume that because the economy is growing at 5% per annum (GDP) that is not performing poorly. There has been massive industrial decline, outsourcing has weakened the labour class. The challenge is how to boost growth to 6% yet ensure equitable distribution of wealth and eradication of poverty. Our growth goals, however, are not predicated upon the health and durability of our natural resources and ecosystem services.


Constitutional democracy with an effective Bill of Rights;

Independent courts

A media that is still free—despite current threats;

Generally sound macro-economic management

Public debt is less than 36% of GDP—and external debt is only 16% of GDP.

Vast natural resources.

Tourism, which now contributes 8.3% of GDP—much more than mining. (Automobile production contributes as much to GDP as mining. In 2008 we produced 600 000 vehicles of which 170 000 were exported.)

Strong auditing and reporting standards and regulation of securities exchanges are the best in the world.


No progress in eliminating inequality since 1994.

Poverty: 42% of our population lives on less than two dollars a day. Almost 15 million South Africans subsist on children’s, old-age and disability allowances.

Between 35% and 40% of black South Africans are unemployed or have given up their search for employment.

The failure of our education system. Only 22% of children who entered the school system in 1995 passed matric in 2007 and only 5.2% did so with university exemption. Only 1.5% passed maths at the higher grade.


The growth of a multiracial middle class.

The spirit of individuals


Opportunism pretending to be ideology. Policies should be based on pragmatism, consultation, the rule of law and concern for ordinary people.

Imposing demographic representivity in the economy, coupled with deployment.

Global environmental and economic threat.

Land reform. It is not being tackled.

Corruption. On Transparency International’s Corruption Perceptions we have gone from 23rd position in 1996 to 54th place 2008.

AIDS continues to kill five thousand people every week.

Attempts to regulate the press through the Protection of Information Act and the Media Appeals Tribunal are serious threats to our democracy.

Loss of skills. Since 1990 between 750 000 and a million South Africans have emigrated.

Undermining of judicial independence.


There is no conclusion to the stories of Africa.

But I will leave you with one. There’s a woman I know—we shall call her Nomkhita. She is 70 years old, and lives in Khayelitsha. Ten years ago, the HIV and Aids epidemic was sky-rocketing in South Africa. Nomkhita is a crèche owner serving children up to six years of age, saw how this epidemic affected the children and how ashamed their parents were to ask for help.

So, she looked around and then went to a workshop run by an organisation called Abalimi Bezekhaya — farmer’s of home. Nomkhita and two other women started a gardening project. She now grows vegetables for her family, her creche and enough to sell in the market.

I know it’s a woman story but it’s one of hope. And she is making a difference. The thing is: we all can. It’s whether we choose to or not.

* Additional information added after the talk.