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 It is the product of almost two decades of research and includes analyses, chronologies, historical documents, and interviews from the apartheid and post-apartheid eras.
24 Jul 1991: Clewlow, Warren
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WC. Since we spoke last I've now become the Chairman of the Company.
POM. Congratulations.
WC. And I'm still Chairman of the Economic Advisory Council. I couldn't have told you that yesterday or two days ago because I've just been re-appointed.
POM. I'd like to go back to a basic question and this is of how do you see the problem which the negotiators will face? Do you see the problem as the conflict of many ethnic groups or as a matter of white domination over black people in general? Would you see it more along the lines of the Serbs and the Croats as being a matter of black and white?
WC. I don't think the negotiation process, once it gets going, I think it's going to take a little time, a little longer to get going than maybe I thought a year ago. Not much longer but if anything longer rather than shorter. Let's make that first claim. Secondly, once it gets going I still think it will move quite quickly and it won't be on a black/white, I don't think there's a black/white emphasis in the negotiations.
POM. I'm using black to be Coloureds, Indians and Africans.
WC. No, I think once the talks get going, when once it's established as to who will be there, who sits round the table, it's quite a big hurdle to get that going, but once that moves I think it will move quite quickly and it won't move on the lines of black/white but I think it will move on the lines of principles. I think it will break up into segments, certain people handling certain aspects of a future constitution. I think that part will come quite quickly and I don't think it will come on racial lines.
POM. But the ANC has been dogmatically insistent that the issue of ethnic minorities is part and parcel of the government's basic position of separate development and they would argue that such ethnic differences only arise because of the oppression itself. So what I'm getting at, are there at this point, if one looks at the ANC and one looks at the government, are there two different conceptions of what the problem is?
WC. I think there are now but I think those differences will be bridged. I think the interesting thing that's going to come out is, when one looks at the ANC one looks at an ANC which has got a strong link with the Communist Party and I can't be sure, maybe there are other people who know differently, but I can't be sure just how the ANC would look if it did not have that Communist Party factor, whether it's domination or influence. There must be influence because there are so many of them involved. Some people might say it's almost dominant. I think one will see the Communist Party and the ANC separating at the negotiating table and then it will be interesting to see how the ANC's stance modifies without that Communist Party influence. I think it will modify quite a bit. I really do see a future in this country which is not going to have a constitution that has any racial overtones. I don't think anybody is pushing that bug now.
POM. What I'm getting at is that if you classify South Africa as a divided society using the terminology that is used in Political Science and Sociology and all divided societies have certain characteristics in common and it's very difficult to find governance arrangements that will ensure democracy. If it's looked at that way it's a far more difficult problem to devise these governance arrangements than if you look at it as a matter of bringing blacks into the economic and political mainstream and making it a lot more difficult than saying one man one vote, a Bill of Rights and an independent judiciary.
WC. Well it depends, that's the top statement now when one starts delving into what is the Bill of Rights, how is that going to read? One can have it on the one extreme, pretty vague and general and the other extreme almost divisive. I think it will err more to the more general one. I don't think race or tribe, I don't think the background of the people of the parts will play such a major role in the negotiation process. I think the backgrounds will blur and one will start looking at common goals. And why I say it will go quite quickly because I think those common goals are pretty common.
POM. Which you would specify as?
WC. I don't think there will be much of an argument on a free economy for instance, free market type of economy. I think the bank will come about as how much, how is one going to tackle the social problems within the free economy concept as opposed to saying it's got to be done in a more socialistic way. South Africa will still have to follow reasonably socialistic economic policy to tackle the basic problems of many of the people, but I think it's moving more into the free economy type of thinking as opposed to being straight-jacketed into being more socialistic.
POM. One thing on that puzzles me and that is the widely reported allegation or fact that four major companies, Anglo American, South African Mutual, Rembrandt and Sanlam control 80% of the shares traded on the Johannesburg Stock Exchange and between them apply for or control more than 80% of the production distribution in the country. You could hardly call that free enterprise.
WC. That's not true.
POM. That's not true?
WC. No, it's far too simplistic. It's just taking a very simplistic view of the economy and then to start with the South African economy is not represented by the Johannesburg Stock Exchange. There's a lot of economic activity which has nothing to do with the Stock Exchange.
POM. But in terms of ?
WC. What about the people who own their own shops and people who own their own businesses, they're not on the Stock Exchange.
POM. But in terms of production, would they control 80% of production? Their subsidiaries? What I'm getting at is, this is an article of base for the ANC, they begin from the point of this massive concentration of economic power in the hands of a few conglomerates, multi-national conglomerates at that and that this must be tackled in the restructuring of the economy. Do you take issue with the way they specify that problem?
WC. Because it's put too simplistically. A company like Anglo-American certainly controls a large sector of the economy. A group like Barlow-Rand certainly controls a large sector of the economy, but nevertheless it's not done in a very sinister way, to start with. And I think the control side is grossly over-played. I think that's an area where one's becoming far too theoretical and from a practical point of view it doesn't work that way. A group like Barlow-Rand, we're not controlled. We have a major shareholder in S A Mutual, but S A Mutual doesn't control Barlow-Rand, not at all. They're a major shareholder. They have their input as a shareholder and their directors on our Board have an input like other directors.
POM. Their argument would be that because of the inter-locking relationships between large companies that essentially you might have the on boards of directors of these companies perhaps a thousand people who sit on the various boards and really make economic decisions for the economy. That's their argument.
WC. Yes. There would be people, there would be some commonality. What's the point?
POM. The point would be that ...
WC. If you replaced those thousand with a thousand ANC people they would control the economy?
POM. Well they would say that there is too much concentration of economic power in too few hands and that you must have the dispersal of economic power and break these monopolistic conglomerates up.
WC. Well they're not all monopolies to start with. But who do you disperse the power to? I mean who takes their place?
POM. What I'm getting at is if they presented this argument to you or to government negotiators on the economic side, you would reject it?
WC. Yes. I would say it's not practical and not good for the country.
POM. You would produce data to show that it's neither?
WC. I don't use data because I don't have the data at my disposal. I'm only dealing with the group that I work for but I wouldn't know how to - I'm just lost on your line of questioning.
POM. It's really very simple. Four companies control.
WC. Four companies don't. The answer is they don't.
POM. OK. Last year you said that the economic debate was in its infancy a matter of platitudes and slogans. Has it advanced any further than that in the last year?
WC. Platitudes and slogans from?
POM. You said that the debate on the economy at this time last year was really being conducted in terms of platitudes and slogans.
WC. It is still to a degree a lot of publicity made to statements, a lot of the economic debate consists of publicity made to statements which are really not well thought through. But I think the debate is getting much more serious now. For instance the Economic Advisory Council has produced an up-dated long-term economic strategy. An interesting thing on that one was when it was produced and circulated very widely how the responses came back. There was a good section of the population, especially of the black political parties, who didn't respond at all and a lot of the noisy people that one tends to read about responded either not at all or, in my opinion, rather weakly. And yet one still got a good response from people who thought it was good.
POM. Is it possible to get a copy of this report?
WC. It will be soon, not at this stage.
POM. What is it called?
WC. It is "A Long Term Economic Strategy for South Africa" produced by the Economic Advisory Council. The reason why it is not available now is because it will be soon presented to the State President for his view and until he releases it, it's his document, so until he releases it, it can't be circulated. But that provoked - the circulation, I believe, raised the standard of the economic debate and people instead of talking platitudes, like what you said earlier 'Four companies control the whole economy', that sort of vague statement, this actually got down to much more detailed, more into the depths of the sort of issues which the economy had to face and solve within the next few years. And that's why, as I said to you earlier on, when one looks ahead one's got to walk this tightrope in this country of us generating as much growth and wealth as possible because there are a lot of people who require that for their own upliftment, their social upliftment. And when this country feels it's done it's job properly in that area then it's got a hundred and fifty million people in adjoining territories which are nowhere near having even thought about the issues of the day. So the importance of South Africa getting its economic act together as the driving force in the southern part of Africa in this year that's passed by, it's become much clearer and much more important.
POM. How would you measure the economic performance of the economy in the last year? Has anything happened that would make you more hopeful that it can generate the necessary growth, the 5.5% growth that most analysts say is necessary if income is to move up, some of these problems to be addressed or is the level of stagnation the same as it was last year?
WC. I think the potential to get to high growth levels is there, but the difficulties of getting to them are also very much in evidence. For instance one can't get the growth rate at the cost of letting inflation run amok. One's got to balance the amount of expenditure which is going into the economy, which is going to produce revenue for the future as opposed to the type of expenditure which one needs to uplift the living conditions of people, although some of that of course spins off to revenue producing. The point I'm arguing is that if you build a person a house, that in itself does produce revenue in that it's uplifting the person who is living in the house who's able to get more and more involved in the greater economy. But the difficulty of producing enough growth and revenue and satisfying the demand for the fruits of that growth and revenue still remains a very difficult equation to balance. But I think in the year that's gone past the understanding of what the issues are on both sides, the understanding of what's needed for growth, the understanding of what can be afforded for social upliftment, that's become more apparent and one is seeing it discussed more intelligently, more realistically. Getting back to the negotiation process, I think that too will add another layer of understanding as to what is really needed. So to get to those magic levels of happy growth is still very, very hard.
POM. You, as an economic advisor to the President, as you review the state of the economy and weigh its possibilities, would you advise the President, or could a truly representative democracy in which 70% of the population who are the truly disadvantaged, would be represented in a parliamentary assembly? Could you advise him that a fully representative democracy is affordable or not affordable at this point? Or could there be too much democracy too quickly?
WC. I think it's affordable. The question is one has to temper, one has to have a fuller understanding, those who represent the government of the future, will have to have a full understanding as to what the potential to generate growth and funds for social upliftment, there has to be a full understanding as to what exactly can be afforded. I would think that in the future the pendulum will swing more to more social spending, but on the other hand it's going to be a very difficult thing to balance. One can't just throw completely in the one direction and ignore the other. But I believe that when the fly wheel of progress, which is going quite fast now, as it picks up momentum, there's a much better understanding now taking place.
POM. Do you think these understandings will have to be worked out in negotiations or do you think the National Party would leave it just to a future government to define?
WC. I think the negotiation process, to be successful, must produce a future government which is broadly based and fully understands these issues. It must produce a broadly based, competent government which understands these issues.
POM. Would you see such a Government, and this goes back to the whole question of power sharing, would you see that government at least for some period of time including members of the National Party?
WC. I don't know. I can't predict the outcome of exactly what sort of government will come out of the negotiation process. But the way the thinking is going at the moment, the National Party as it progresses, as it sheds it's problems of the past, although not exactly helped by the incidents of this last week, but basically if it continues to move, in the year since we last spoke if you take the measurement, the National Party has gained much broader support in this past year as de Klerk has moved forward so he has picked up a much broader base of support amongst those he might have shed. Strangely enough where he would have lost out in the year that's gone by, he's shed some of his white power base but I think he could retrieve a good deal of that. He certainly attracted many people from other races. He certainly attracted the Coloured people, the Asian people. I think he's attracted to his line of thinking people who are looking, when I say attracted, they are just looking towards his direction. The white liberal sector which used to support the opposition is tending to leave that white opposition and look towards de Klerk as their future leader. And then a lot of moderate blacks.
. Yet in the year that's gone by the ANC has seemed to have not made any progress in attracting a broader base, but of course it has it's solid black mass support. So when one sees the way the trends are going at the moment one is seeing an ANC which is almost completely black based against a government coalition of other groupings and of course there's the big factor of the Inkatha/Zulu people and it looks as if the bridges between the Inkatha supporters and the ANC remain unbridgeable, certainly at this stage. In the year that's gone by the differences have been accentuated as opposed to what's common ground. So I would say the chances of that block of people's support, whatever way one looks at it, would remain independently but looking possibly more to the de Klerk side than to the ANC side, or will remain uncommitted somewhere in the middle, of a size of which one can't assess. I personally think it's much bigger than is generally talked about. But coming out of those groupings, whatever way they lean, the important thing is, coming out of that grouping, a constitution, a workable constitution is finally acceptable on the table and bearing in mind that it's got to appeal to a lot of people over a broad grouping, so the chances are the constitution will tend to be broad rather than narrow. Once you narrow it down smaller differences start coming out. But more important is that those people who have to enact that in the future fully understand the issues which face the country in the years that go ahead and not take an extreme view as to how the future's going to be solved.
POM. But will there emerge from the negotiations a common agenda of what these problems are and the limits of the means to address them.
WC. I don't think there will be difficulty in giving a good consensus on what the problems are. I think the problem is going to be how one is going to tackle the future, how one resolves it. One could say with the likelihood of the ANC/Communist Party type of thinking leaning more to, say, social upliftment, expenditure has to be greater and has to be higher and faster and the other side saying, whilst accepting that you are misreading the ability of the economy to produce the wherewithal for what you're doing. So I think it's a question of that. But I'm confident that coming out of this thing are enough good people on all sides to able to understand that. In other words I think that South Africa has got within its grasp the makings of a competent government.
POM. If one looks at the history of divided societies, particularly divided societies where one group dominated the other either tribally, ethnically or racially, countries which are basically poor, there's not a single one that under democracy has moved from poverty to prosperity. Why do you think it might be different in South Africa?
WC. First of all I hope it will be different. I'm not sure that it will be and the reason why I say that is I think there is a large percentage of South Africans, black and white, who fall into that moderate grouping. I don't think we're a country of extremes. I think the moderate, the fine common ground which crosses racial barriers on moderate people is a plus factor. Secondly, we've got an economy which has wealth generating capacity, it's there. We've got an economy in which the infrastructure for development is laid down and paid for, which doesn't exist in many other countries, certainly other black African countries. The infrastructure or the lack of it prevents people from uplifting themselves whereas here that basic ground, the foundations of that are laid to a large extent. It could be more, but laid to a large extent and I think there is a cross-pollination in this country of access to the outside world. So it's not a solution, I'm not saying it's people getting advice on how to solve political matters, but certainly when it gets to new products and the advancement of a modern society we have the wherewithal to draw upon the outside world for that sort of thing. So these are all factors which collectively, I think, give me the confidence that there's enough going for it to overcome the problems. By saying that I'm saying that moderate South Africans will bury those racial differences more easily than those who are not moderate. One other thing, I think more and more people, South Africa doesn't look at things as quite as black and white as I think outside people perceive us to do. I don't look at people as whether they are black, white, Asian and I think there's a much greater acceptance of colour here than is generally perceived.
POM. I suppose the question goes back to the first one I asked which is that in a way the emphasis shouldn't be on racial differences. Maybe I should phrase the question in this way, that under totalitarian communism all of Eastern Europe and the Soviet Union operated as national units whether Czechoslovakia, the USSR or Yugoslavia. With the lifting of totalitarianism ethnic differences which had been submerged for decades quickly emerged and are rapidly posing a serious problem as to the stability and sometimes as to the make-up of these countries. Do you have here a situation where apartheid has made for common ground between racial groups, blacks, Africans, Coloureds and Indians, but as you do away with apartheid that the underlying ethnic differences among blacks themselves and Indians and Coloureds will come more to the fore so that what you will have is a far more fragmented society than a cohesive one?
WC. No. I think it will blur because under apartheid differences were always accentuated. If you take away apartheid then you've taken away the constant reminder of differences and I think the pendulum is going to swing towards the blurring of differences. I don't think any new ones will come up. Under apartheid certain racial, black tribal differences have always been there. I think they are being undermined at the moment as political posturing takes place, looking for a place in the sun sort of thing. But once we go through that era I think it will blur away. I don't see it becoming an issue.
POM. So in this sense you think South Africa would be different from the rest of Africa where ethnic differences were submerged in a common black nationalism while the countries were under a colonial power but once the colonial power was expelled then you had competition for power amongst the ethnic groups themselves.
WC. Well in many cases when one looks at, it's hard to take a broad view on all of that because you've got to look at the individual circumstances, but in most cases when colonial power left African countries it was not substituted by good government. Somebody took power and colonial power for whatever its strengths and weaknesses was in almost every case substituted with bad government and that's the one lesson that we in this country are trying, well hopefully will avoid in the constitutional stage of our discussion, that we don't want to substitute the past with a bad future government. And I don't think we will. And the second thing is we've learnt quite a few lessons in this last year, quite a few lessons in the world have become apparent to us. For instance as the lid came off Eastern Europe and one was able to see what those countries really looked like when one was able (a) to visit them which many of us have, (b) get visitors from them to this country, one has seen at least how a particular brand of government coupled with economic government has failed so miserably and which has meant that it's telling South Africa that its future does not lie in that sort of thing and it really lies on how does one adapt Western, first world economic principles to a third world situation. That's the thing that we're trying to grapple with at the moment.
PAT. And where have you seen that that has worked? Is there any place that that has worked? I mean that was part of Padraig's question, not as the emergence of ethnic nationalism but you're talking Australia, New Zealand, you're talking Argentina, Brazil, transfer from authoritarian rule to more pluralistic kinds of rule, have tracked the opposite in terms of economics. The poor worse as opposed to poor gets better.
WC. I haven't seen in looking around and in thinking seriously of role models elsewhere, I don't see a role model anywhere in the world for South Africa to follow. In fact I think one of the dangers is to try and hitch one's wagon on to someone else's role model and I think what's happening now which is also a good sign, I think we're getting less and less - under the apartheid of yesteryear our country was flooded with people who were coming here to tell us what should be done, whether they were economists, whether they were businessmen, whether they were politicians or whoever they were, we were inundated with people giving us advice, either well meaning or advice which happened to suit their constituents back where they came from who heard them giving the advice elsewhere and thought he must be such a clever man giving advice to South Africa, he must be clever enough to represent me in wherever he comes from. That era's gone, the era of "advisors", one is seeing less and less of that because it was easy to give advice when one knew at that time that the advice was irrelevant anyhow because the system was such that it wasn't changing etc., etc. But now that the chips are down, the doors are open and the progress is being made, one's shed the frivolous visitors and advisors, they've pushed off, they've long since left the scene and we're getting down to real business. There's no-one we can say in this country - Belgium went through this, Chile went through this or whatever. What's becoming pretty apparent, where we are different from Africa is that we have a much more sophisticated economy and a working infrastructure. What makes us different from the United States is that we haven't got their degree of sophistication, etc., etc.
. It's no good taking, to get back to what I said earlier on, we're at a stage where we're having to realistically assess what are our resources and what is our potential and what can we afford as a result of that to hand across to those who are seeking a lot of upliftment. If we give away too much we kill the goose that lays the golden egg and if we give away too little then there'll be a large mass of unsatisfied people. And that's why it's important that for instance as we go ahead, no matter who those negotiators and no matter where they come from, we want to make sure that we get the best and the most moderate of their party. So if when the ANC comes, when the government, National Party come, we want to see the moderates in the ANC, the moderates in the National Party, the moderates out of Inkatha, etc., etc. because there we will get a much quicker meeting of minds. If the extremist whites, in the unlikely event that we see the extremist whites of the CP trying to have to strike a deal with the extremist blacks, then the bridge is too wide to bridge.
. Now in the year that's gone by, what's been quite surprising has been how much common ground one tends to find with people which we never thought there was. I'm talking from my personal experience. Up to a year or so ago as white businessmen we concentrated our, when we were talking to South Africans at large, one was not going across the board. In this last year our breadth of discussions has widened tremendously and we are meeting far more people, people that weren't in the country a year ago. To give you an example, a chap like Thabo Mbeki wasn't in this country. In the year that's gone by he's come back and many of us have had the opportunity to talk to him and hear what he thinks as opposed to reading about what somebody writing in a newspaper in general told us what he was thinking. Now we've had the opportunity of seeing man to man, many of us are having that opportunity. Now the thing that's coming out of this man to man thing, whilst one might not basically be in agreement perhaps with everybody, I think there are differences which are quite obvious, I mean it's not a sublime society. It's surprising how easy it is to discuss those differences, how to find that you are often having had those discussions, many a time I've come away from a discussion with somebody that I'd never met previously with certainly an understanding of why they say that. I might not agree with it but understanding why and then saying to myself, well, yes, but that to me those differences are not going to get into the way of a future South Africa. They must surely be bridgeable. That's the general feeling one's getting. I'm not talking only of my experience, I know you're not only talking to me you are obviously going to speak to a lot of people, but I think you'll find a lot of people finding exactly the same thing, that the differences are not that big.
POM. Could you enumerate some of the things that were different or are not that great?
WC. Well obviously as a businessman my discussions with black political people, I'm more discussing their economic views. I'm not competent to talk about constitutions and that sort of thing so I tend to devote, whilst the subject comes up, the dominance of my discussions come more into the economic field and there one finds an understanding of those people of the problems, economic issues, the potential and what has to be resolved. I don't see it as a big difference. I don't think any thinking black politician is saying the solution to this country is to nationalise the mining industry. I think there was a good example of rhetoric, which is now giving way to the other view. There are still some people who are saying so, there might still be some people who believe it, but I think there are less people saying it and even less people are believing it. A lot of people are only saying it because one's got to appeal to an audience. And without going into details, I don't want to quote names, the people I find most interesting of all are the PAC people. They're a small party, and I'm only talking from my personal, maybe I've just met the few people who are - maybe I'm not representative enough to say this, but there one has seen very clear thinking people.
POM. Could you mention a couple of them?
WC. No I don't want to mention them.
POM. OK. Can I ask you a couple more questions? One, the catalyst for economic growth is the amount of resources that the economy ploughs back into research and development. Looking at Barlow Rand first and then the manufacturing sector secondly, of net profits what percentage would go to shareholders in terms of pay-outs? What proportion would be ploughed back and of the amount that is ploughed back what proportion would be earmarked for research and development?
WC. I haven't got the figures with me, but if you're looking at what that Nedcor thing said, they've got the things completely upside down, that Nedcor presentation. They were saying South African companies are not ploughing back.
POM. I'm not familiar with that. What is this?
WC. It was a survey that was done on the future direction of the country. Nedcor. Nedbank. It was sponsored by Nedbank. When it comes to research and development, if you take a firm like Barlow Rand, it depends obviously which industries you are looking are. We are linked to three major pharmaceutical companies in the world. Now many of their products we are manufacturing in this country. Many of their products we import directly. But we are not matching them with research and development. We haven't either the resources or the manpower to do so, but we benefit, part of our link to these people was to benefit, part of the deals which we strike, is that they've got to make their research and development available to us. In other industries, for instance, take the sugar/chemical industry, in other words the chemical industry which grows out of sugar, we are alone, we haven't any other partner in the world to hitch ourselves to. We do it on our own and are as advanced as anybody else in that particular area. When it comes to basic things like new paint technologies and whatnot we have the competence here I think equal to elsewhere but we are still also talking to other people. It's a question of sharing. So I don't see South Africa having any problem in getting the technology it requires for its future growth. When it comes to the mining, it's a big mining country, our mining technology and techniques are as good as anybody else's. In fact we might be leaders in that sort of thing. So I don't think we'll be held back by a lack of - technology is available to us in one form or another.
POM. The ANC's analysis of the economy, putting it very simplistically, is that you have the manufacturing sector that was geared towards imports, luxury imports at that for a small segment of the white, first world economy. That market has now more or less exhausted itself, that manufacturing itself was import dependent and what we need now is an economic structure that will meet the broad needs of the impoverished community particularly in areas of housing and things like that, so that we should look for a new path of growth. Do you agree or disagree with the basic conception of what the economic problem is?
WC. I don't think one can put it as simply as you've put it. I don't understand the bit about - certainly our economy wasn't geared towards - I mean our economy is geared towards the supplying of the mass markets. No-one would make a living if South Africa was manufacturing for a small luxury market. That's just a lot of nonsense. It's a question of, in all products that you are manufacturing in this country you're looking at the market that's available to you and that market is the market that can afford the goods. It's a question of what do you make and who can buy it from you.
POM. I suppose it wouldn't be a matter then, until very lately, the preponderant amount of purchasing power would have been in the hands of the white community. Now that has changed.
WC. No longer, no longer.
POM. That has changed. Up to ten years ago that would have been true?
WC. But not now.
POM. So you say the economy has already adapted itself to meet the changed purchasing power of the various sectors in it.
WC. But we don't look at the economy as far as black/white people. You're basically looking at people who are within the economic, how many people are economically active in our country and how many are economically non-active. Now it's the economically active people that are your market which is growing all the time because, for instance, there are no mature industries in South Africa I don't think, as mature as would be described in more sophisticated countries because our markets are growing two ways, (a) in population growing but (b) it's growing because more and more people are becoming economically active, moving into it. And as they become more economically active and earn more money so their purchasing power becomes a bigger factor in our economy. For instance, take S A Breweries, and we are closely linked to them in that we are very much involved with producing the cans and bottles, so if the Breweries are doing well our packaging business tends to be doing well. Now the Breweries market is not, they don't deal with the luxury white market any more. They long since, if they had to sacrifice something that's probably what they would sacrifice.
POM. Three last very quick questions.
WC. Getting back to, I've heard this ANC thing on the housing before. It's a question of housing, it's not only a question of providing housing, it's paying for it. Either the person who acquires the house pays for it or the government has to subsidise the person for the home. It's a question of who pays for it.
POM. I suppose their answer would be that if you undertake a broad programme like this you put people to work and between the wages they make and the multiple effects of their earning you're generating enough income to allow the people to be able to afford the house on some basis.
WC. That would be paid for. One of the problems with transferring electrical power into areas that haven't had it before is that once you've got that electrical power then it requires the generation of funds to finance it. So you can't afford putting electrical power into, for instance, a township where they never had it before and then one month later there would be a boycott to say no-one's going to pay for it.
POM. The last year, if you look at the performance of the country as a whole, would you say it has created a better climate for foreign investment or still more uncertainty?
WC. I think it's better, it's improved in the year but it's by no means at the stage - I mean a real foreign investor he's looking to see what the future of the country is going to be like and I think at this stage the violence has not been a positive factor and, secondly certainly a lot of foreign bankers are looking a little askance at the ANC/Communist Party type link. There are a number of negatives that still have to be resolved before one can see South Africa being a place where there will be massive inflow of foreign funds for investment. On the other hand when that desire might come about then there's the question of what do the local people do in a group like Barlow Rand spending 1.8 million rand this year in new investments. We already have, so it's a question of if there's an attractive local proposition in the industrial sector where we are strong we would look at it very seriously ourselves and probably would be able to do it without the foreign investment coming in.
POM. A number of economists, both conservative and liberal, make the point that if the economy is to achieve the 5½% rate of growth that would be necessary to start taking care of, to have the upliftment of the majority and to have incomes rising that it probably would require an investment of about ten billion rand each year over a ten year period so the great emphasis is on attracting foreign investment. If the country fails to attract significant foreign investment what alternatives are open to it to achieve that kind of growth rate?
WC. Growth internally. I think this foreign investment is a very over-played factor. Let me put the question to you: what are these foreign investors going to invest in?
POM. I don't know. These are statements made globally by economists, we need a hundred billion.
WC. Well one should be careful on making these statements.
POM. So essentially you're saying that no economic strategy should be predicated on foreign investment being the driving engine of economic growth?
WC. It will help but it's not going to be the main force.
POM. It's sufficient but not necessary.
WC. Sitting in South Africa today are not many, many projects just gathering dust on the shelf waiting for foreign investors. That's not true.
POM. And lastly, the report that just came out yesterday on possible emigration, up to a quarter of a million whites are contemplating leaving. Is that a serious factor?
WC. Where did this report come from? Who wrote it?
PAT. ...
WC. Well again I look at all those very carefully to see who writes them and I think one of our problems is I don't think we have the best economic reporting in this country. So I don't know where these 250 000 people, who they are. If I take a group like Barlow Rand where we employ 200 000 people I don't think I'm expecting a mass exodus of talent out of this group. So I wouldn't take that very seriously.
POM. Two very last quick ones. One is, the impact of what's been called Inkathagate, the recent disclosures of government funding of Inkatha. Do you think that may have a significant impact on the process or that it will simply attract attention and then the process itself will get on?
WC. I don't think the funding is the issue. I think the more serious issue is the violence factor and I think if there's been any wrongdoing as far as violence is concerned then the State President has got to act very carefully. I mean the funding of Inkatha, it gets funds from all sorts of people, funds from the British government. I think it's wrong that this government should be funding a particular political party. There will be those who will argue, well what's the difference between the government giving funds to Inkatha and Gaddafi giving funds to the ANC, sort of thing. I think the answer to that one is, well Gaddafi where he gets his money from is not our concern, where the government gets its money from is my concern. It's possibly some of my money and I don't think the government should be involved unless it's for a specific task and certainly publicly made. If I as Barlow Rand wish to give funds to a certain thing I think the essence is I'm judged on the wisdom of making that decision. It shouldn't be done in a clandestine way.
POM. And this time next year when I visit you again, will people be sitting around the table at that point?
WC. I would say so, yes. I would have said that a year from now one will see - a lot's been done since we last met. The decks have been cleared. I think a year ago people were arguing, what was going to be cleared, what was going to be done, was the President going to follow through. Those were all in doubt. There's no doubt about that now because it's been done, at least to my knowledge it's been done. If things haven't been cleared it's because there's been a time lapse problem but with the efflux of time the decks will have been cleared and then one goes through this laborious process of this negotiation era, which I still put my money on and say it will be under way. We'll have the influx of foreign journalists but ...
POM. You'll survive them.
WC. We'll survive them. But I think if they thought they were going to come here for a long, long holiday they might find that it's curtailed. I would write your book faster because you might find that ...
POM. It's over before I get down to the nitty gritty?
WC. Well you want to time your book when it's, I don't know, I would think the timing of your book would be to be the first one out when it's all over. If you don't know about timing why don't you speak to Barbara Cartland? She knows about the timing.
POM. Yes, we've heard her twice in the last 24 hours. Thank you very much.