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24 October 2003

Speech by the Chief Secretary to the Treasury , Paul Boateng MP, at the South Africa Conference

Opening words

  1. Honoured guests, delegates, brothers and sisters. What unites all of us in this room here tonight is that we are all friends of South Africa. For me, it is a particular joy to be asked to join you in this plenary session. And I bring with me the special greetings of our Prime Minister and our Chancellor – who, but for certain happy events, would have been here himself.
  2. The ties between our two countries are strong, and have always been strong – in good times and bad. It is worth remembering that the very first Pan-African Congress was held here in London at the very beginning of the 20th century and it had, as its main subject, the subjugation of Africans everywhere. Today, at the beginning of the 21st century, we come together for a very different purpose. It is now 10 years since the ending of Apartheid in South Africa – and it is time for a period of reflection, for celebration and for a rededication of our efforts.
  3. Reflection – because it is always a useful exercise to stand back and take stock of the progress your country has made, and to seek to put your current position into perspective. More than anything it is useful in setting the agenda for the future.
  4. And celebration – because South Africa has achieved so much in the last decade. Indeed the people and government of South Africa are entitled to our heartfelt congratulation.

    Ending of Apartheid

  5. The ending of Apartheid was a vital first step taken by the modern South Africa. Apartheid was a sin, a crime and an affront to human dignity – it was a gaping wound on the body politic, and its removal has made the world a better place.
  6. But when you reflect on what it took to achieve the end of Apartheid and the effect of the struggle on the people of South Africa, then it is nothing less than a miracle that the transition was managed so peacefully and so successfully.
  7. In a very short space of time, South Africa has made the transition from a global pariah to one of the most respected countries in the world - with one of the most advanced constitutions at its heart.
  8. And because of all this, South Africa is – today – a beacon amongst nations. It gives us hope, not just for its own future, but also for the future of Africa and the wider world.
  9. But if the ending of Apartheid was the most important step, it was also just the beginning. Political freedom needs to be matched, and supported, by true social and economic empowerment if it is to really mean anything to the people.
  10. As Nelson Mandela said, in his inauguration speech ten years ago, “We have, at last, achieved our political emancipation. We now pledge ourselves to liberate all our people from the continuing bondage of poverty, deprivation, suffering, gender and other discrimination.”

    The next challenge

  11. And so the next step is for South Africa to work towards translating this progress into an economic reality for everyone. Tonight, I would like to touch on some of the main challenges I see ahead for South Africa in achieving this and, importantly, our role in supporting your endeavours.
  12. I would also like to say a bit about the pivotal role South Africa plays as a partner in the global arena on trade and development – and how important this role is for its own development and the future of the whole African continent.
  13. Economically, South Africa has made much progress. It has a sophisticated economy that has now enjoyed 24 consecutive quarters of positive growth. Despite difficult global conditions the economy has remained resilient – growing at 3% in 2002. I can, in fact, think of only one other country that has surpassed this – which modesty prevents me from naming! And this resilience is largely due to South Africa’s strong policy framework and sound macroeconomic management.
  14. But there are real challenges ahead…indeed the greatest challenge of all is the HIV/AIDs pandemic sweeping the continent of Africa. There are now 30 million people with HIV/AIDS in Africa – with 4 people dying die of AIDS every minute. This is, of course, a terrible price in human terms – but is not just a personal and human tragedy. In South Africa, as elsewhere, it reduces the entire country’s prospects for economic growth and poverty reduction.
  15. South Africa has a 5-year Strategic Plan for tackling the enormous problem of HIV/AIDS, and the Government has recently announced that they are to support the rollout of anti-retroviral treatment. All of this is great news and very welcome.
  16. And this pandemic is a global challenge; with implications for us all. None of us are immune from its effects or from the responsibility to fight it. Indeed, it is a problem here in the UK too, and it is a reality in my own constituency. Everywhere it is a public health crisis, and in South Africa it is an economic crisis and a development crisis too. Certainly the UK is committed to fighting it – which is why last year the Department of International Development invested over £250 million on HIV/AIDS bilateral work.
  17. The UK also plays a constructive role in the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM). In particular, we recognise its need for predictable sustainable funding. Our initial funding was $200 million US dollars over a 5-year period, but we have recently increased this pledge to an additional $80 million US dollars for 2006-08.
  18. Another great challenge facing South Africa is its struggle with high unemployment. And while the economy is growing, it is not generating new jobs in the numbers required to make real inroads into unemployment. There is also a great deal of variation in wealth and income levels – itself largely the result of skills, education and enterprise gaps within the South African population.
  19. This is hardly surprising, given the legacy of Apartheid. South Africa faces the immense task of merging what under Apartheid were effectively two economies – vastly divergent in their shape and prosperity – into one national economy open to all. You are entitled to look to the rest of world for support in this – and you should not be left wanting.
  20. Black Economic Empowerment (BEE) is one of the policies being used to correct the imbalance of ownership of the economy and the skewed distribution of wealth inherited from the Apartheid era. It demonstrates a real willingness to be pro-active about opening the economy to previously disadvantaged people, across the range of gender, ethnicity, sexual orientation and disability. That is something to be proud of. It is to your credit that this is happening, and we salute you for it.
  21. I know there is a real hope that the Black empowerment policy will, if it is combined with higher economic growth, create the necessary environment for fostering enterprise and entrepreneurship. Given the recent provision of 10 billion Rand for Black Empowerment ventures in the recent fiscal budget, this seems like a realistic expectation. I certainly wish it every success. We all have a responsibility in this too – through the flows of international finance and investment.
  22. And the Black Economic Empowerment initiative works as a mirror on our own society here in Britain. We are also a multi-racial society, and we also need to unlock the potential this represents. We also need to move from the rhetoric of justice to the reality of equality.

    South Africa’s pivotal role

  23. Dealing with South Africa’s problems – and the resolve and commitment you have shown – is not just good for South Africa, but also for the rest of Africa. A strong South Africa with a stable and growing economy and with a proven history of good governance behind it is an invaluable resource for the continent as a whole.
  24. South Africa needs to be more than an example however. It needs to play an active role in the welfare and development of the African continent. It needs to respond to the challenge that Nelson Mandela set when he said, “South Africa [cannot] be indifferent to the rights of others. Human rights will be the light that guides our foreign affairs. Only true democracy can guarantee rights.”
  25. And the people and government of South Africa have taken up the torch: South Africa does play a pivotal role across the whole of Africa. The New Partnership for Africa’s Development (NePAD) was established in 2001 to develop strategies for achieving sustainable development in Africa. South Africa’s leadership of NePAD symbolises its role in leading a continent-wide commitment to ending conflict, improving economic and political governance and developing regional integration.
  26. The UK welcomes and supports these aims. On our side, we have worked hard to make Africa a priority for donor countries, and in particular for the G8. Be in no doubt that although I have come straight from Madrid and discussions about the reconstruction of Iraq, Africa remains central to the UK’s agenda and particularly our development agenda. And so we welcome NePAD, and the leadership role that South Africa plays within it.

    International trade and development

  27. South Africa has also demonstrated this leadership role at the recent trade talks in Cancun.
  28. While the collapse of these talks was a severe disappointment to us, the UK has welcomed the emergence of a stronger voice for developing countries. If this develops into a constructive relationship, we feel it will be a positive outcome, from which we will all gain.
  29. And South Africa will play an important part in both supporting the voice of developing countries, and ensuring the relationship is a constructive one.
  30. But it is also important for the developed world to recognise the issues highlighted by the G21 countries.
  31. The UK knows that developing countries need greater access to our markets – which is why we are pushing other member states so hard to reform the EU’s agricultural regime.
  32. We know that developing countries need to build supply side capacity to take advantage of increased trading opportunities – and to take part fully in trade negotiations. That is why we have now committed £160 million of our tax payers money to trade capacity building since 1998.
  33. And we need to address problems arising from preference erosion, so that as developed countries open their markets, those countries that already have special access are helped to deal with an environment of increased competition in the short term. If we do not find practical solutions to these transitional problems, countries will continue to pay the very real opportunity cost of remaining isolated from the world economy.
  34. The international community must make urgent progress on these issues and reaffirm our commitment to a multilateral approach. It is vital for global growth and for the development objectives of countries everywhere. And, South Africa has an essential role to play in this.

    Poverty reduction and increased financing

  35. But lets go back to the economic advancement of South Africa’s people. The UK feels strongly that this cannot be achieved in South Africa – let alone in the rest of Africa – without a substantial transfer of additional resources from the richest countries of the world to the poorest countries… in the form of investment that builds new capacity to address the long-term causes of poverty.
  36. Because, while the UK supports additional debt relief when it provides a truly sustainable exit from debt, it is increasingly clear that this is not enough. Additional funding and resources are needed to increase the overall financing available for poverty reduction.
  37. This is the reasoning behind the Chancellor’s championing of the International Finance Facility. This Facility would leverage money from the international capital markets and raise the amount of development aid from 50 billion dollars a year to 100 billion dollars in the period leading up to 2015.
  38. And I would like to acknowledge and thank the strong support we have received from South Africa in these proposals. Particularly through Trevor Manuel’s sponsoring and co-signing the proposals – and in his chairing of the World Bank’s Development Committee and the African Development Bank Annual Meetings. He has given inspirational leadership to the development agenda.
  39. Nelson Mandela has also supported the initiative. Indeed, he has written to G8 leaders asking them to support the IFF, describing it as “an absolutely necessary and timely initiative that deserves active response from all members of the international community.” We have been challenged, and so we must respond.

    Services for poor people

  40. It is a challenge we must respond to because this increased financing is critical if we are to achieve the Millennium Development Goals. While freedom from disease and freedom from illiteracy are both critical ways to enable people to escape poverty – they continue to be elusive for many in South Africa, in the African continent as a whole – and indeed in countries around the world.
  41. In many places progress in human development has lagged behind that in reducing income poverty. If the economic growth projected for Africa doubles, the region will reach the income poverty goal but will still fall short of the health and education goals.
  42. Let me take a quick look at education, as an illustration. And no one should doubt the gravity of the situation here. I recently attended a Finance Ministers’ meeting of HIPC countries in Malawi. All of us had been educated at some point in Africa and we all had to confront the fact that in every single one of those HIPC countries, the education situation was now worse than when we were children. This is the scale of the problem.
  43. In South Africa the legacy of apartheid has led to a huge divergence in education levels, which has itself left a low skills base. This skills gap is now holding the country back from economic progress and growth.
  44. And while education is now free of discrimination by colour –the quality gap between education that is accessible by poor, rural people and that which is experienced by wealthy, urban people is still huge.
  45. Closing this gap will require time. But in South Africa, as elsewhere in Africa, it will also require effective service provision.
  46. We know this and yet, across the continent, public service delivery is continuing to fail many poor people – in quantity, quality and even in access. This is why the role and example of South Africa is so important.
  47. Research, and here I am thinking particularly of the World Bank’s World Development Report published last month, shows that a transformation in service delivery is needed to ensure that basic services are delivered to the people who need them most.
  48. Services need to be driven by the needs of citizens and, most importantly, policy makers and service providers need to be held more accountable to the citizens they are serving. This is a challenge that applies to us here in the UK as well – responsiveness, transparency and accountability of public services is important for us all.
  49. If South Africa can transform their delivery of public services, it will be an important step towards a better future for many of its people. And it could be an important example to the rest of Africa as well.

    Closing words

  50. The last 10 years have shown that South Africa is delivering on its historic commitment, which was immortalised in its Freedom Charter. This Charter sought to create a progressive society based on equality for all and sound governance. Much has been achieved, and they have the best possible starting point from which to tackle the challenges that lie ahead.
  51. South African people now need economic freedom – and this can only be possible through prudence, discipline and a willingness to make some very tough decisions. This you have shown.
  52. The commitment is there. It is tangible. The people of South Africa have had no easy walk to freedom. But your walk has been an inspiration to us all – and you should count us, the people of Britain, as people who will stand beside you now and always.
  53. Thank you.

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