Address by Mr Nqabayomzi Kwankwa, UDM Deputy Secretary General, at the Eastern Cape Provincial Congress, at Mthatha Primary School Sports Grounds, Eastern Cape 30 June 2013

Programme Director,
UDM President,
Members of the UDM NEC;
Presidents of the UDM Youth Vanguard and Women’s Organisation
UDM Public Representatives
Fellow UDM members
Ladies and gentlemen:

As we gather here today to elect the Eastern Cape provincial leadership, we should make use of this opportunity to review the progress the UDM has made thus far and to also reflect on possible policy areas that dominate public discourse and the State of the Nation today.

However, before I delve a bit deeper and shed light on these issues, let me ask from the outset whether the time has not come for us to review our policies ahead of the 2014 Elections to avoid becoming politically irrelevant.

In this regard, we should ponder the relevance of our policy position and slogan: “Government Must do More”. Our policy document defines this as “a government willing to help all of its people become productive and self-reliant, capable of taking care of themselves and to contribute to the whole Country’s success.”

Considering the relevance of this policy position is particularly important considering that we now have a government that appears to be doing a lot more, but doing it less well.

In addition, our detractors often argue that the “Government Must Do More” economic policy position implies that citizens are passive recipients of government programmes and that their fortunes depend on the generosity of government.

This weak argument is probably what led the Pirates of Polokwane to steal our slogan and rephrase it to: “Working Together, We Can Do More”.

In order to frame an appropriate response to whether or not our economic policy position is still relevant, one needs to briefly outline the State of the Nation.

Economic indicators reveal that the South African economy is on an unsustainable economic trajectory, as growth levels are too low to meet the demands for employment. Nowhere is this poor performance of the South African economy more evident than in the fact that according to Statistics South Africa’s latest Labour Force Survey the unemployment rate in South Africa increased to 25.20 percent in the first quarter of 2013 from 24.90 percent in the fourth quarter of 2012. This put the number of unemployed people in South Africa at 4.6 million. To make matters worse, the unemployment figure rises to 36.7 once the figure of 2.3 million people who have stopped looking for work is taken into account.

Add to this the fact that inequality levels in South Africa rank among the worst in the world.

Such high levels of unemployment and inequality are a recipe for political instability. We have already seen the signs of this in the rise in protests and acts of civil disobedience around the country.
Increasing the severity of the matter is Government’s poor management of the fiscal framework. President Holomisa summarised this concisely in his Parliamentary Budget Vote on Economic Development recently when he said and I quote that: “…South Africa seems to be on a fiscal slippage. In the year 2007/2008 our budget balance declined from a surplus of 1.7 percent, to a deficit of 5.2 percent in the year 2012/2013. Our debt-to-GDP ratio has increased from 23 percent in 2008 to approximately 40 percent in 2012/2013.” End quote.
Our education system ranks among the worst in the world.The 2013 World Economic Forum (WEF) Global Information Technology Report ranks South Africa’s Maths and Science education second last in the world, only ahead of Yemen. It further ranks the quality of our education system 140 of 144 countries. Our Internet Access in Schools – which General Holomisa spoke about earlier, is ranked 111 of 143 countries.

Reasons for this poor performance are teacher competency, the number of teachers available, to language barriers, to mention but a few. Needless to say, this jeopardises our children’s future.

The entire healthcare system is falling apart.

Millions of our people are landless in their own country of birth. Often, the few that benefit from Government’s land redistribution programme do not receive adequate post-settlement support.

Everyday news comes to us rife with stories that show increasing levels of crime in our country, which points to a disintegration of public safety.

Corruption in the ANC-led government is endemic and institutionalised. For proof one has to look no further than the ruling party’s stake in the Eskom/Hitachi/Chancellor House deal, where every time Eskom raises the electricity price the ruling party gets a share of the spoils.

Black Economic Empowerment (BEE) has only served as a get rich quick scheme for the politically connected few.

The high levels of corruption and failed BEE polices handicap service delivery and as a result, investors are jittery about South Africa’s prospects.

With the bleak picture like this, where the country appears to be on a slippery slope to a dysfunctional state and anarchy, we should return to the question I posed earlier, that is, whether “Government Must Do More” policy position is still relevant.

I am sure you will concur with me when I say the answer to this question is an emphatic YES! With such extraordinarily high levels of poverty, unemployment and growing levels of inequality, Government must indeed intervene in the economy to promote economic growth, increase employment, eradicate poverty, redress past imbalances and reduce inequality, among others.

Ladies and gentlemen,

At the beginning of this address I ventured an opinion that we are dealing with a government that appears to be doing a lot more, but doing it less well. After the brief outline of the Station of the Nation above, I am sure you concur with me when I say that here we are not dealing with a government that is not doing a lot more but doing it less well. Instead, we are dealing with a government that is doing the same things it used to do a decade ago but it is doing all of them less well.

Government must therefore do more in the following areas in order to improve economic performance and thus reduce unemployment:
– Investing in the development of labour intensive production techniques.
– Promoting regional development.
– Promoting Small, Micro and Medium-sized Enterprises (SMMEs).
– Improving the investment climate.
– Expanding educational and training and retraining facilities.
– Providing incentives for on the job training.

Another critical way of stimulating employment is the provision of incentives through subsidies. While we understand the inefficiencies caused by subsidies and that they are not a long-term solution, they are important in giving infant industries time to learn the tricks of the trade until they are ready to face competition.

Industrialised countries do not hesitate to protect their industries by introducing subsidies to protect struggling industries. For example, France uses subsidies to protect its famers, while other industrialised countries gave bailout packages to their financial institutions during the subprime crisis.

We should revive the closed factories around the country in areas such as Dimbaza, Mthatha and so on, and use subsidies to protect them from foreign competition. These factories should then be run and managed by South Africans to ensure that they employ students, graduates, and the skilled, semi-skilled and unskilled sector of our population. Such a step would create employment opportunities for our people.

Coming back to the challenge of land redistribution, you will recall that the Natives Land Act of 1913 decreed that only certain areas of the country could be owned by black people. This led to a situation where the majority citizens owned only15 per cent of the land mainly in native reserves, while the minority groups owned the remaining 85 per cent.

Strides have admittedly been made in redistributing land since 1994. However, even snails move faster than the pace of Government’s land redistribution programme. Almost two decades since we attained freedom, only a fraction of the land has been redistributed.

To expedite the land redistribution programme, Government should consider relocating people to fully serviced land in areas, such as Elliotdale, Port Shepstone and Maclear, and so on. Post-settlement support programmes should then be put in place to ensure that these communities engage in subsistence farming. Such a programme would not only reverse the current trend, where only a select few benefit from the land redistribution programme, but it would also contribute to food security.

We make these proposals fully cognisant of the fact that only an Economic Indaba would help South Africa develop a coherent and comprehensive economic blueprint for the country. We should therefore continue to call for an Economic Indaba to ensure that South Africa develops its own Master Plan for the economy.

Thank you