About this site

This resource is hosted by the Nelson Mandela Foundation, but was compiled and authored by Padraig O’Malley. It is the product of almost two decades of research and includes analyses, chronologies, historical documents, and interviews from the apartheid and post-apartheid eras.

08 Aug 1990: Wilson, Francis

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POM. You have just said?

FW. Well that the economy is the critical issue and I think one wants to come into it at two different levels. One is in terms of poverty and resources and all of that, and the second issue is the issue of inequality because I think these two are both pertinent.

. Let me deal with the inequality one first which is relevant here. If we look at the statistics, and this is data now from 1978 and we're looking at only 57 countries in the world for which we have information, but, for what it's worth, SA has the highest Gini coefficient which means a greater degree of inequality than anywhere else in the world. Ours is about .66, the American one is about .35. Now the reason I'm raising it is Raymond Auer's(?) point where he said that in a society with too great a degree of inequality human community is impossible, which is really to get right immediately to the point that even if we painted everybody the same shade of green, as it were, if the distribution of resources and income and wealth and assets remained as it is at the moment community, in the sense of forging a common society, becomes incredibly difficult quite apart from colour, if I can make that point. So just from a point of getting the society to grow together in some kind of coherent whole one has to get to grips with that issue of inequality it seems to me.

. Add to that what I find a very interesting fact and that is that the Gini coefficient even within black SA is relatively high, it's about .55 which means that there's quite a degree of inequality within black SA, not as high as it is in society as a whole but within black SA, not because one's got hundreds of black millionaires but because the degree of poverty amongst the very poor is great amongst, say, female headed households in the rural areas. You've got a similar pattern in the States but ours is much more extreme here which means that you then are going to have very different interest groups even in black SA which I think is politically significant if one starts talking about strategies in the longer term. I mean like now it's fairly straightforward, everybody's against apartheid, everybody wants a non-racial, democratic SA, so you've got a huge consensus moving towards that and that consensus can be maintained for some considerable time. But down the track a majority or a black government that has a black centre of gravity is going to have to come to grips and find ways of handling the rather different constituencies that are reflected in that fairly high Gini coefficient for black SA.

. OK. That's by way of background and it's fundamentally important but let's get to grips with what is the most urgent and that is that the recognition that political change in SA is a necessary condition for a better SA. We all agree about that and whether one's looking from the point of view of just violence in the townships or dealing with issues of poverty, the poor have to have political power, we have to move towards a democratic SA in order to have a better SA for a whole host of reasons that I won't go into now. But that the increasing realisation of while that may be a necessary condition, it's not a sufficient condition and this is becoming very apparent as people start reflecting on the economy. It's all very well to have, say, Mr Mandela and a majority government in power in Pretoria but what is that government going to do in terms of land reform, education policy, industrial policy, competing on the world market and dealing with issues of unemployment which are as bad here as they are in Algeria or Nigeria? Those kind of issues have become very apparent.

. Now there's not been a hell of a lot of thinking in this country about those kind of issues until 1989, in fact 1990, because all of a sudden as people get towards power they begin to realise, my God, we've got to actually get our act together on these kind of problems. A lot of people anticipated this in the past and said, "Look what happened to Zimbabwe because they weren't properly prepared and let's get prepared." So there was some preparing taking place but really people hadn't got excited about thinking through the practicalities of limited resources and all of that.

. So the economic issue becomes very important in terms of a state policy in general terms. In the South African context it becomes extremely relevant when one recognises that so much of what is thought of as the pillars of the apartheid system, such as the Group Areas Act or even the Land Act, are in fact not so much pillars as scaffolding in the sense that scaffolding enables you to build a building of a particular size and shape and then you remove the scaffolding and the building stays in place. And so if you put the Group Areas Act, which has effectively segregated our cities, thrown the poor from the centre out into peripheral areas and all that, now you can remove the Group Areas Act and you can say we're going for a non-racial city but that's really like taking the scaffolding off a building, the shape of the city remains as it has been created under apartheid. So the peer realisation is that one is going to have to do a tremendous amount to overcome the legacy, and by legacy I mean the shape, the structuring of society as a physical and social and institutional way to overcome all of that, one's got to have policies to redress all of that.

. Now what was the key with the Americans is that he made the remark that South African history tends to progress by a combination of political disasters and economic miracles. What we're seeing in SA now is that as the political changes start to take place in a very hopeful way the question is whether the economy is going to be able to sustain the kind of growth that is necessary. There are two sets of signs here. There are some signs saying, well we're now a very high cost gold producer and the price of gold is not really going to go above $380 ever again, it's probably going to fall down to $350, $300, and we're going to become a very marginal gold producer. If that all happens then, of course, the SA economy is in grave difficulty because what we're good at is producing minerals, digging them up and selling them and we don't have a great competitive advantage either in agriculture or in manufacturing. It's no Taiwan and it's no Denmark. Our capacity to retool and rethink, that hasn't been very high on anybody's priorities because we've been working so hard on the political issues, the politics of race, if you like. On the other hand all previous predictions about what was going to happen to the price of gold have been wrong in South African history so it would be very foolish to make any predictions about gold.

POM. Especially today.

FW. Especially today, exactly. It's just one of the great uncertainties of SA. It's one of our national traits that everybody's worrying about the price of gold. Fair enough, they always have been and they always will but let that be just a shorthand for can this economy sustain the kind of growth that is necessary, that jobs are going to be created at least as fast as the population is coming on, workers are coming onto the labour market. That has not been the case for the last ten years, last fifteen years, so we're having a spectacular rise in unemployment which is extremely serious and we have to overcome that. On the other hand there are plenty of people around who say, look, the SA economy, really what has been preventing it from just getting going has been the political uncertainty and once we get that sorted out in a year or two then we can go.

POM. That's rather a big assumption isn't it?

FW. It's a big assumption, it's a big assumption, although I think if anybody had made an assumption two years ago that these six months would have happened we would have all laughed, that it's impossible. What one has got to be very careful about in SA is not to make predictions either too optimistic or too pessimistic because one just doesn't know how the things are going to turn out. I can draw you a scenario which is absolutely flawless in its logic which will point to a very optimistic picture, or into a Lebanese type disaster and either way is possible. What has been remarkable about these last six months here is the extent to which, as somebody put it to me the other day, the centre has held together. Things have not fallen apart as people thought they might have. They still could but there's an extraordinary resilience at the moment, the centrifugal force that's coming to bind this place in a way that nobody had predicted or foreseen or imagined.

POM. To look at the two types of inequality that you describe, what are the mechanisms for a new government to address either one, given the narrowness of the tax base and given the incredibly high rate of population growth, given that gross productivity is lagging behind the growth in wages, given the huge level of unemployment, where are the resources?

FW. Well, the first thing to say is that the population growth rate is serious, it's very serious but it's not an incredibly high rate of population growth. Our rate of population growth is slower in the nineties, assuming the statistics are correct, is slower in the nineties than it was in the eighties, than it was in the seventies, than it was in the sixties. We are slowing down as you would expect of an urbanising society. We are very rapidly going to be 75% urbanised. In those kind of conditions population doesn't tend to increase at that kind of rate. So we're not into the kind of ten year situation, leaving aside the issue of AIDS which who knows how that's going to affect things.

PAT. That's not factored in?

FW. That's not factored in at all at the moment, at all. AIDS can give you the worst of all possible worlds whereby you continue to have a rapid rise in dependency rates and a fall in rates of population who are economically active. The whole thing can be totally disastrous. Our population pressure is there all right in terms of this population's going to double in the next whatever it is and there's not a tremendous amount that we can do about that except to try and make sure that there is as much family planning and so on but I think it's going to be essentially the process of urbanisation and rising wealth and the whole chicken and egg problem there which deals with it.

. But your fundamental question which is: what are the resources at the disposal of the state? I think the first thing to say is that there is a tradition in this society which, if you like, comes out of the Afrikaner tradition more than out of English speaking South African tradition of using the state without worrying too much about using the state for things like public works programmes. So I don't think there's going to be huge resistance to a combination of public and private attempts.

. Now what can be done at the public sector? I think a number of things can be done. First of all a question of re-distributing the resources used by the state itself. The state is spending one third of GNP, or whatever it may be, a fairly high proportion. How does it use that more effectively in terms of health, of education, the peace dividend if you like, that kind of issue? One doesn't want to get too excited about this, too exaggerated about this, but I do think that there are significant things that can be done in terms of good primary school education for everybody, reasonable immunisation for everybody, bringing down the infant mortality rate for everybody, all those kinds of things one can work in. The evidence from Latin America suggests that one really needs to be working on influencing the supply side of getting at things like health and education rather than pushing up wages or pensions, or whatever, which is one of the huge inflationary components.

. We've been doing quite a lot of work here in fact on lessons from Latin America, if you like, that in that process of political change what were the economic policies being pursued and which ones worked and which didn't work and how did otherwise good governance fall apart because they didn't handle their economy correctly. I think you've got to be very careful of all of that.

. I think one of the main problems here is going to be the extent to which expectations run way beyond the capacity of this society and the ability of those with political power to curb or to put those two together which certainly a white SA government cannot do. The real question is whether even a Mandela government or an Mbeki government can do it and how long we've got to do it in. Obviously one of the problems facing the Mugabe government is, having been very successful in improving education in the last ten years, you've now got huge numbers of people coming out of the school system but there just aren't the jobs available. Now he can do that for a while but in due course there's going to be a lot of ructions about that politically in Zimbabwe. We've got that kind of track ahead of us. I make this observation, first of all it's an industrial economy and it has a very significant base. It's not as though it's a tiny little economy.

. Thirdly, and this is not a policy statement I'm making but just an observation, that one way that SA is going to handle politically the question of population growth is by, in a sense, exporting its unemployment to the surrounding countries. Already we've seen in the last seven years the proportion of foreign migrants has dropped from 80% of those on the mines to 40% of those on the mines and that proportion can go on falling and there will be a lot of internal political pressure to make that happen. Why bring in these Malawians while we've got unemployed people at home? That's going to be very tough on the frontline states particularly cases like Malawi and I daresay Mozambique. I suspect that Lesotho will not be subject to the same kind of constraints but one never knows.

. So one of the questions one has to ask in this whole process of economics and politics of transition in SA are, what are the consequences for the surrounding countries which have been symbiotically built into the South African political economy for the last 100 years? And in a sense they're a mirror image of each other, the one thing South Africans will do is use those frontline states to cushion the shocks here and equally this will make life tougher for those frontline states.

POM. The trade unions with their agenda, the black trade unions have been quite successful in raising black wages.

FW. Sure.

POM. They've now got 85% of   What impact does this have both on the level of employment and the levels of competitiveness?

FW. It's difficult to work that all out at the macro level. I suspect that what we're going to see, de facto, is union power being used to make quite sure there is real equality and in fact in most jobs now you're not going to be paid differential rates for black and white. What then becomes a pressure is to make sure the gap between the skilled and the unskilled isn't as great as it was and that some of the unskilled start moving into the semi-skilled. But with equality in the economy in that sense will come, well that will be accompanied by inflationary pressure which will reduce those wages in real terms. White income in real terms has fallen quite substantially in recent years and I think we're going to look at this kind of inflationary process as one way or one part of the equalising process in SA.

. The next step is to ensure that whatever those wages are in real terms that they are backed by the productivity that pays for them and I think we'll probably see those adjustments being made. So many countries now from Australia to Britain, to wherever, are really worrying whether they can sustain their export level in the long term in the face of, let's say, Taiwanese and Japanese competition and SA is faced with similar worries with the overturns of gold and diamonds and so on. I think we've got worries ahead of us but they aren't any worse or indeed any better.

POM. In which sectors of the economy should investment emphasis be put?

FW. In SA?

POM. Yes, where are the potential points of growth? What niches in the international markets can it - ?

FW. You see the intriguing thing about SA is that the market signals all are to put it into minerals because that's what we sell. So all the money goes into minerals because those are what all the market signals are telling us, so we become a very effective exporter of minerals, producers, digger of minerals, exporter of minerals. We're in a world class when it comes to doing all of that. But everybody says, "Oh, we shouldn't be doing that because these minerals are going to run out." But nobody has got any very bright ideas as to what our alternatives are. Textiles some people talk about, tourism some people talk about, mohair, those kinds of issues. I haven't seen a really good systematic study and proposal as to what we should be doing. I think it's much more incremental, here and there, bits and pieces, what products couldn't make it more effectively in Africa.

POM. Shouldn't the emphasis be put on, say a labour intensive economy?

FW. I would certainly argue, I would certainly agree that there has been some artificial signal coming out of the apartheid policy which has led to more capital intensive production than needed to be the case and, therefore, we have to look at more labour intensive ways of doing things. There's some interesting work that the Development Bank are doing right now of thinking about labour intensive ways of public works programmes whether it's building schools or whatever and I certainly would put a lot of emphasis into that. I think that part of the emphasis has to be on the technology of production. Now that, of course, has got its own spin-off in terms of the wage rate to be paid and so on but I think there's room to manoeuvre.

POM. What about foreign investment? Many of the politicians that we have spoken to and one gets the impression that end apartheid, have a new SA, and billions of dollars and rands are going to pour into the country from abroad, which again seems to be a rather large assumption. Just given what you said it doesn't seem to me that there's any particular incentive for a company to invest in SA rather than in Taiwan.

FW. I agree with you that there's not necessarily going to be this huge flow back. I suspect what we will find is that with a political settlement there will be a period, maybe not more than a year, but I'd like it to be more than two years, when SA will have a reasonably good chance of attracting capital in. People will feel, well let's give them a chance, they've had a good economy.

POM. Will it not work the other way with people saying, let's wait and see how they go?

FW. That can happen that way but I'm just thinking of the Zimbabwean analogy here. Zimbabwe had an opportunity just a year or two after independence when there was a lot of capital floating around, or seemed to be, and they messed it up in a sense that they did not encourage it as well as they could have done. Well, that seems to be the conventional wisdom. I haven't seen a detailed thesis written about it. And so I would suspect that there is continuing one of the things that astounds me is the extent to which America in particular, but also the Europeans, continue to be interested. And I talk to my American friends and I say, "Why do you go on and on worrying about SA? It's a tiny little pimple at the far end of Africa." "Well", they say, "It brings in so many different issues, there are many different issues." And people go on being interested. This seems to apply to the business community as well. I can't explain it all but I'm just recording it.

. I think we will find some investment here. Bear in mind, and I'm slightly contradicting what I was saying a moment ago, that in the sixties people were making very good money in SA. 25%, get your money back in three or four years, and there may still be opportunities for that. Some people feel that the SA economy has a very good infrastructure and you could get in here and make money relatively easily if you just organise properly enough. Whether that is possible right across the board I doubt but some business people could come and do quite well just by understanding the market. I'm very hesitant when it comes to making predictions about future political economic development. I think we can make a good case, as you were half doing, that there's not going to be a lot of investment because people are going to say let's wait and see what this place is going to be like, we've already been thrown out once, let's not have it happen a second time.

POM. In negotiations that take place, I think almost everyone we have talked to says that economic structures, the type of economic structures that would be in a post-apartheid SA will loom large. What structures at the extreme, what structures must be avoided at all costs? What kind of things must be avoided?

FW. Well we've got to avoid, and I think we will avoid it, well number one I would avoid a one party state like the plague. Number two, I would avoid a centralised economic structure operating from some central spot. Now luckily for us our political change is coming post-Gorbachev, not pre-Khrushchev as it were, which makes a big difference to what the progressive movement is going to be arguing for. I also think we've got to avoid like the plague this kind of rather simplistic argument that just 'let the free market do it all', because I think it is naïve and I think it is historical and I think it could be very damaging in this society. So I would veer away either from the centralised planned economy or from the let the free market do it under all conditions.

POM. Would it be a debate to have been between - not that there should be a public and private mix, but to what degree it should be public and to what degree should it be private? Which one would you make the argument for?

FW. I get quite pragmatic about that. It seems to me that it rather depends on the circumstances, it depends on the history. I see no big case for making the railways private at the present moment in the SA context. I think it depends on where one's going to find the management to do these things, how efficiently they can be run. If one decides that the railways are really necessary to have transport all over the country then there's a lot to be said for it. But I treat this much more as, how shall I say, a pragmatic and ideological issue but I'm certainly not about the state doing certain things. I would be hesitant, I wouldn't myself nationalise the gold mines, although I can see there's a nice case to be made for it in political terms, but I think that this government or the next government would find exactly what the NP did in the 1930s, that one can really get about as much control as one needs without having to go nationalised, or without having to nationalise and you save yourself oodles of trouble because the mining industry run by the government, the government would then be responsible for the closure of mines, labour relations on all the mines, running out of gold whereas at the moment one can just swear at Anglo-American to get their act together. I think it would be mad, there are quite enough problems.

POM. What types of nationalisation do you think would be acceptable to the business community?

FW. I think the nationalisation, the re-nationalisation of anything that was nationalised in fact makes sense and, again, I'm not saying but electricity, the railways, the steel, posts and telegraphs, those kinds of areas. I don't think nationalising the banks would make any sense at all. I don't myself think that I would nationalise Anglo-American although there might be some case for greater participation of the state in decisions made by the very big corporations all the time. All the signs that one picks up at the moment are that there is on these kinds of issues, the business people are kind of backtracking saying, "Sure we see there's a role for business in all of this", and Mandela is just saying, "Sure, we see that there's a need for the private sector".

POM. On the tax, on the revenue side, the options there are even more limited.

FW. Yes they are very limited. I'll tell you who's done a bit of thinking about this is Pieter le Roux who's at the University of the Western Cape and he's done a bit of thinking as to how one can broaden that tax base, not necessarily going via income tax but into other areas. I'm not a tax expert but I think that there has to be some room, not a huge amount of room, but some room to expand tax here and there. Again I think we have to be realistic, we're working within limited resources.

POM. Taking Zimbabwe, what mistakes were made there that must be avoided here at all costs?

FW. When it started, the observation of the Zimbabwean economy is very different from the SA one just in the degree, the proportion of people dependent on agriculture, it all depends on the industry. I think that Zimbabwe really does not go as fully as they should have gone for foreign investment if you contrast them with the Botswana government. Now, I'm not going for foreign investment under all circumstances, I'm saying that one's going to find, going to negotiate the deal as to under what conditions you're going to let them in, and here I think the Botswana government played their hand very much more skilfully than the Zimbabwean government did in that process because they kept them very well under control but they got a lot of money in and they've had this 9% growth rate in real terms. So that's the first area.

. The second area is that I'm not sure, this is a paradoxical one as it were, I'm not sure that the Zimbabweans have tackled the land issue with sufficient enthusiasm, let's put it that way, determination. Now it's a very sensitive issue. Their white farmers have never had it so good as they've had it in the 1980s. They've really had a wonderful time. Political stability and lots and lots of money and nobody expropriating them in any shape or form. Now that may have been a necessary political price to pay to keep the white group in place, so I want to be a little bit careful about what I'm saying there, but I think we need to look at that issue. I do think we have to look through some of the more radical patterns of the Taiwanese and the Japanese when it came to land reform, without of course killing our golden geese and all that.

. What else? I frankly don't think that that Marxist/Leninist rhetoric of Zimbabwe has been particularly helpful. I don't find it particularly illuminating but if it's a necessary thing, the theology necessary to keep the troops in line, then you find ways of not doing it as it were. Fine, fine. I mean various types of pragmatism have been fairly effective but the concern about Zimbabwe, frankly, is back to the whole business of scaffolding and pillars. What seems to have happened rather than the restructuring of everything is a just moving in of a new black elite to take over a lot of wealth, corruption, etc. One of our questions, and I really don't know the answer to it, one of our questions is seems to me is how are we going to transform, and it's the inequality basis I'm really talking about, how are you going to change Cape Town as it now is with Bishopscourt up there and Khayelitsha down there? What most people would seem to be thinking is let's de-racialise Bishopscourt but that doesn't change the basis of the SA political economy.

PAT. Is that real? Are you going to de-racialise in ten years?

FW. You're going to get some black doctors and so on, some of it, but this is the critical issue, how do you handle that with scarce resources? I suspect what we're going to see in the first instance will be a new political elite will come in who will be participating in government, they will be participating in that type of business, will do what one can in terms of health care, schools and so on and housing for Khayelitsha, but Khayelitsha will remain and Bishopscourt will remain. I suppose what one can argue at this moment is what can one do to improve as rapidly as possible the conditions in Khayelitsha.

POM. I want to ask the question in a different form. How will a majority rule government, non-racial, democratic government, how will the life of the average person in the townships be better five years from now?

FW. I think that is the critical question, at this point of course it's the critical question. How can that happen? There could be a process under the present system, under the present economy, of electrification. One could really go for electrification. One could do a great deal in terms of services, sewerage, water, for the peripheral areas. Khayelitsha, of course, needs electricity, some of the peri-urban areas need water. Some of the rural areas need rubbish removal, all that kind of thing. I think the service sector of living conditions, water on, water off and electricity could be expanded very rapidly and that would make a real difference to people's lives.

. The next question is: are there going to be enough jobs for everybody at some income level that doesn't leave them in total penury? The answer at the moment seems to be no. The answer at the moment seems to be no, and the kind of slums being generated at the moment on the edge of Durban and the edge of Cape Town, edge of Port Elizabeth, I think they're really quite scary.

POM. Can the economy generate enough skilled labour to serve as a plus to the manufacturers?

FW. I think it can generate some. As I say this is a very energetic economy, there's a lot of energy in this place.

POM. It seems to me that you're placing a lot of faith in the energy and hope.

FW. Oh I am.

POM. And the fascination with SA.

FW. No, no, I'm saying that there is, let's unpack that a little bit, I'm placing some faith in people's fascination with SA in terms of foreign investment in the short run. In terms of the capacity of the economy to generate more wealth and so on, what I was saying is that there is an energy in our economy which I think is quite significant in terms of the organisational capacity, the determination of people. Whether it's going to be sufficient to overcome this only time will tell. I don't think anybody can make a good reliable prediction about  it.

POM. If you look at the next ten years, how in the year 2000 do you think SA structurally, the buildings, the geography of it, will be considerably different than it is today or will it have fallen into a pattern of there will be some alleviation of the housing problem, not much, there's more water and electricity, some better education, still a huge mass of unemployment, huge squatter camps, will it be chugging along at a sluggish rate, free but basically not any improvement; there will have been perhaps a political democracy but no economy democracy, there will be no real distribution of economic power?

FW. I think I'll give you an answer in a very unsatisfactory way, somewhere half way between those two. I don't think we are going to see dramatic economic changes but I do think we're going to see a better than even chance that we're going to see significant improvement in terms of things like electricity, power, water, which in the longer term, but much more than ten years from now, that in the longer term will be moving this country up.

PAT. What about the continent? If you look at SA and say

FW. Now that's a second question.

PAT. Yes.

FW. Turning over the page, that's a whole new question.

PAT. Look at the whole continent, SA juxtaposed -

FW. It's very fascinating, I've been talking to people in the continent recently and the continental view is that we can't wait for SA to get involved because we need them like anything to help get this whole continent on the move. Now I think if that is true, that SA's liberation will make a significant difference to Africa's psychic sense, where it's going to make it through it's economic capacity, let's examine a little bit. One of the things that could happen in the near future is that you build a whole electricity infrastructure from Koeberg here up through Namibia, Angola, Zaire and then all the way across to the Aswan Dam on the Nile River and back down the other side, so you have reasonably cheap hydro-electric/coal power for the whole area. Now that can begin to spin off if you start electrifying the townships, people making things and so on. That can begin to spin off although I don't think it will be very rapid, but one might well look back on that  as a kind of watershed event in the development of southern Africa.

. SA's capacity to produce more goods and sell them into the rest of Africa I think is there. Whether the rest of Africa has got the capacity to pay for those goods is not so certain but there are a lot of opportunities for creating wealth in Africa with good organisation and good infrastructure, and that's what the colonial theory was all there to show. It's not impossible that SA will play a leadership role by building Cabora-Bassas all over the sub-continent, all those kinds of things. That I think is entirely possible. Let us say that until SA claims a real participatory political and economic role in southern Africa, the sub-continent can't move far. Once that happens it makes it possible with certain guarantees.

POM. Do you see the types of choices that will have to be made in regard to the economy as having an impact on political alliances? For example, I've just been looking at the COSATU record over the last four or five years and their statements and their demands and their stridency almost in many regards. It's very hard to see them not wanting any pay-off when liberation comes and that is black workers, organised workers in particular must quickly see equality with white workers. The level of expectations all over the place would be very, very high.

FW. I think that's absolutely correct.

POM. How can they be checked or can they be checked? Would any new government be caught in a situation where it can never catch up with the level of expectations that has been created so that in an odd way people feel more un-empowered rather than more empowered under their own government; where people who don't pay rent now, because it's an oppressive system, find that they have to pay rent under their government, it's now charging them rent? There's a peculiar mixture there which I think is true.

FW. I think that that is part of the reality and I think that their government, our government, this new government whatever it is, will both be pressurising people to pay their rent and will itself be under pressure from mineworkers to let them have a squarer than square deal.  So that the dangers of non-racial, super-elite workers are always there. At the same time, this is where this country is quite interesting, one can see the economy restructuring in all sorts of ways to enable people to do their own thing and in a sense that's what co-operatives are. Co-operatives will just make their furniture of whatever they reckon is the rate at which they can sell it, sell the components out of the proceeds. We may paradoxically see a rise of co-ops and one way of coping with the pressure by the trade unions for a level of the party

POM. Do you see as having any role?

FW. I hope so. We'll wait and see. Robert is going to phone me tomorrow. I think that the is an idea in SA which both COSATU and a significant proportion of business could unpack it all and they could live with. Whether they're going to is purely speculative.

POM. There's a new government. You've now been appointed Chief Economic Adviser to the government. You have to present to the State President the outlines of an economic programme. What are the elements of it? What is it addressing? You say these are your priorities, this is what you must do and these are the consequences.

FW. I would say that we have to do as much investment as we possibly can. By investment I mean paying good money in in order to increase the capacity of whatever you're paying it into to produce more wealth. Now that investment I see as going into health on the part of the state, going into health and into education particularly. Our roads are probably OK. Housing infrastructure, housing one must do some but one's got to try and make that as much self-generating as possible because of scarce resources. I would try and hold down as far as possible the obligations of the state to pay out huge amounts of money in demand income and so on, really be trying to put it in our   I would be looking at ways and means of generating more jobs. I'd be looking at land reform.

POM. Do you see a significant amount of land reform?

FW. It's very difficult to see how. Let's take the Karoo, the Karoo has got enormous farms, one sheep per square mile, there's not much else they can do. So one of the things that I'm not at all clear about in my own mind is the scope of land reform. If you take the small vineyards of the Western Cape I don't think there's a great deal you can do with them. There may be the big, main wheat farms that could be made a quarter of their present size and draw more people in, but then there's a whole management side.  There may quite a lot of work that one can do with horticulture, small scale agriculture, very intense around the major cities. I certainly think it needs looking at and exploring, but other than multiplying the number of maize farmers and looking at the horticultural thing around the big cities, I'm not sure there's a great deal of impact. Certain things, there are the small sugar farmers in Natal. There's a very interesting development there in the last ten years, really promoting small scale sugar farmers all over. I think very effective. If we can find ways of doing that, in a sense grafting that in rather than restructuring, that distinction, then I think there's quite a lot that could be done.

. To give you a full answer, I think I would want the government to look very, very carefully at taxation and at basic public finance management so you don't run out of money.

POM. Taxation, what types would you be looking at?

FW. That, as I say I'm speaking not as an expert, I need to go and look more at it, but there's the value added tax which is about to be introduced which may be quite a sensible one. I suspect we will want to reduce sales tax which is pretty regressive. I think we need to look at taxes on land, more taxes on land than we now have as a way of really getting the land more intensively used, the prime land, bring in a bit more revenue on that side. But that whole area is one of those that clearly needs to be looked at in much more detail than it has been. It should have been looked at in much more detail but it hasn't, so it's one of the areas we need to be working on.

POM. Have you found among people in progressive movements that there's been little attempt in developing policies, too many positions and not enough policies?

FW. I think that until 1989 or so there really had not been much in the way of hard-nosed policies but as the ANC is coming ever closer to government so the realisation of the need for policies is suddenly there. So anybody who can produce a good a policy on anything is taken, no question about the ideology, let's just look and see what this policy is going to be like. So there's a great thirst for policy now without necessarily that thirst having been slaked or quenched or whatever.

PAT. The hard policy design related to the ANC, are economics being done under the umbrella of COSATU?

FW. There was that conference in Harare which, again, is much more a setting up of a framework. I don't know that there was sufficient detail or maybe even a firm direction there to tell us if that thing is going to be very bad or good. I mean most of that stuff one could agree with and I think what is actually happening is a very interesting process of pragmatisation of policy and trying to find some alternatives which will make a difference but without upsetting things too much. We're getting much, much less of what I would call the heavy rhetoric than we've had in Zimbabwe, much less. That was not to be expected.

PAT. Is there any concern about white skills, labour, white professionals leaving the country?

FW. I think that is a permanent worry, it's been a major worry over the last ten years with the military stuff and a lot of the young people, half my students just go, that whole brain drain.  I suspect it's not impossible that the brain drain over the next ten years will be significantly less than the brain drain over the last ten. It's not impossible because the kind of people who are acquiring those high level skills, many of them have got an openness to a new SA which is why they left originally because of the conscription. But it's a concern, of course it's a concern.

PAT. Do you teach comparative economics?

FW. No but I've done quite a lot, I've been in India and so on. I'm always looking for comparing and contrasting ideas.

PAT. Where have labour unions, trade unions, organised labour played such a substantial role in liberation politics as they are playing here? As one looks at a change actually occurring, they play it in liberation movements all the time but where are they going to be such key architects?

FW. Good question. Unless you look at Solidarity.

PAT. Right, but that's today. And they're going through all this change now whether or not they're political partners?

FW. That's why Cyril Ramaphosa opposed that.

PAT. He's schizophrenic right now. To be President and leader of Solidarity. He missed his chance.

This resource is hosted by the Nelson Mandela Foundation, but was compiled and authored by Padraig O’Malley. Return to theThis resource is hosted by the site.