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 It is the product of almost two decades of research and includes analyses, chronologies, historical documents, and interviews from the apartheid and post-apartheid eras.
07 May 1996: Golding, Marcel
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POM. Marcel, it's been some time, about 18 months since we last talked and many changes have taken place in the country since then; but let me begin by asking you something very topical that involves one of the final issues in the constitution and I don't know whether a bargain has been finalised on it yet or not, and that is the question of the lock-out. What is the difference between the right of a lock-out being entrenched in the constitution as a right and it being provided for in the Labour Relations Act?
MG. I think the major problem is that if you have it in the constitution it's virtually there for eternity. The constitution is very difficult to amend in future. It's by stealth, you just work them down; OK, OK, that's how it works here, there's no logic, which irritates me. I must tell you some of the stories I've started. But once you get to know how the system works then you can sort of get away, but you must know how the system works. Now I know how the system works, I just hucked him a bit, another ten minutes. If I had spent longer working and going on and arguing and caucusing and getting everyone to phone the Whip, wear him down, make his life a misery, he just conceded.
POM. You said you spent ten years of your life working on this piece of legislation?
MG. Exactly. Ten years.
POM. And yet you're getting a debate in parliament that would last essentially an hour.
MG. And me, I'm only talking for 15 minutes, which is fine because I can make a point in 15 minutes which is good enough but there may be other people that want to make comments and I think an hour for a debate for something that affects, that kills 600 people annually in the industry, that injures thousands, that's taken bitter battles to come and spend an hour debating it and squeezed between the Post Office Bill and some other bill.
POM. Is that typical of the way things are?
MG. It's not difficult, it's just that people want to get things done.
POM. As a legislator ...?
MG. I just think that sometimes, I'm not saying it's always the case, I'm just saying I think it's important that people sit down and say, "Now look what's this bill? What are the implications of the bill for us? What's the impact that it has? Is it meritorious of further public debate?" And then say, "Sure, maybe we should give more time to this", but now they work to a six o'clock deadline and they have three bills they have to complete and you're squeezed in, in that particular bill. I'm just saying I'm just a bit irritated on occasions by it. But the bills we pass, I suppose if you look at the bigger picture, it's just that I think there's quite a bit to say.
POM. Is this kind of procedure a common way in which things are conducted?
MG. I'm not sure because I talk just in my area that I've had to deal with these things.
POM. But do you find these frustrations recurrent?
MG. The point is what I think people don't appreciate, democracy comes at a cost. It comes both at a financial cost and a whole range of other costs and I think we've got to weigh up what requires more public debate and what doesn't. I think there are some issues that - the ... Breeders bill for example, it would get an hour of debate because all the parties want to speak on it. I just think it's about time management. Maybe to be in an emerging democracy things will take time, I suppose, to sort out.
POM. How are decisions made about the amount of time that will be devoted?
MG. That's the Whips, they decide that. I think it's fair they should decide on those things because that's their job, I shouldn't be interfering, but I think they should be guided by what we think is necessary. Certainly our committee doesn't every week want to talk, we don't want to talk, nor do my committee members. It's just that I think when we do have a significant piece of legislation which was promised by the RDP and for once we can say we've delivered on the RDP, this is not talk, this is delivery, a piece of legislation that has major consequences for thousands and thousands of miners. This is one thing that was promised, one thing that now is delivered and we're already working on the second phase of this process.
POM. Can't the Whips in your own party recognise the importance of the legislation?
MG. I'm sure they do but each one is constrained by their own concerns. He's concerned about the time, he wants to run parliament strictly. I'm concerned about my public issues, so everyone is - it's like, I suppose, a healthy tension, everyone wants to get their particular angle and I suppose that's when you understand the system, how you can work it to get maximum for your committee's work. But my attitude has not been to do that, it has not been to try to be too pushy. I think it's just that if you can't explain to someone reasonably the importance of something, then I don't know. Before you had to fight. I hope the culture has changed that there is now reason and you have reason to explain to someone why this doesn't make sense and that doesn't make sense and stop breaking down their door.
POM. Have you found that you've had to change your modus operandi from being an activist trade unionist dealing with the Chamber of Mines, and being in parliament?
MG. I don't think personally I've changed that much. I still have a fairly strong what I call social justice agenda but I think we all have changed, we should all have changed. I think I've changed in this sense that I think now we are not in opposition, we have the responsibility of governance and government and therefore we have a substantial amount of power and we have got to wield it appropriately and I think that's more the new responsibility to see what's in the best interests of the country and not necessarily in the best interests of special pleadings. So although I come from the union it doesn't mean whatever the union says is necessarily correct. It doesn't necessarily mean whatever the employer says is incorrect. I think one's got to recognise that they and unions, correctly, are bodies of special pleading, they plead for their members and their dependants around their issues. They are concerned I would say, yes, but not necessarily focused on issues like unemployment or other issues. It may be a desire but I don't think that's their major focus. Their major focus is to look after their members, which is their task, and government's responsibility is to look after everyone. An employer's is to look after the mining industry. They are not concerned about the textile industry, they are concerned about the mining industry. I think one's responsibility has in that sense changed to recognise that we've got to act in the national interest but at the same time develop a fair balance in the relationships that exist.
POM. Do you see yourself in parliament as the advocate for the mining industry as a whole, employers and employees?
MG. Yes.
POM. You do?
MG. I see myself certainly as that in that I think I've got to look at the interests of the industry as a whole, but whilst I was elected by workers, I think they accept that one has to act in the best interests of the industry. But that doesn't mean in any way that you have forgotten, I'm still very committed to the issues of working people and whatever we do is to ensure that the balance of power between working people and other social forces in society is equitable and fair and that's the balance that I think one has got to try to make sure that working people are not marginalised, that they are not undermined, that they have a fair crack in the system.
POM. How do the interests and concerns and problems facing the mining industry differ from the interests and concerns and problems facing other unionised sectors of the economy?
MG. I think mining is the biggest concentrated employer base in South Africa. It's a major contributor to foreign exchange, it's still has a major ripple effect on the rest of the economy. Many industries are dependent on their fortunes on what takes place in the mining industry. So mining is still a central pillar of the South African economy and to that extent I think one has to be very sensitive to how one deals with the industry. When I say I'm an advocate of the mining industry what I really mean is that there are other people working in other areas, for example trade and industry, that may be focusing on all the other things, because my portfolio covers mining and energy. You do not want to trample on other people's jurisdiction. So that's where I'm really focused on and I try to keep contact with employers and unions and social actors in the environmental groups.
POM. While it's a major sector of the economy and the dominant sector, it is still the sector that loses most employees per year and is faced with this problem of rising costs versus diminishing returns?
MG. Sure. I think there are serious problems in this. I think the mines are getting deeper, our costs are increasing and there has been perpetual retrenchment I would say in the last five or six years and it's likely to continue. I think that's understood now by all and sundry that resource based industries do come to an end. That's the nature of resource based industries, especially if it's not a replenishable resource, like forestry you can always replenish or the fish, whatever, but in the mining you can't. When you've taken out gold or coal it's gone. So in that sense one is dealing with a whole set of problems that, given the size of the industry and it's contraction, you have huge social problems that flow out of a mine closure or whatever, so I think it's different in that sense to other industries. It's so big. If Vaal Reefs shuts down, for example, it has a major impact on the entire Klerksdorp area. Many of the towns are mining towns, that's what they are. I can only think of one or two other places, or three other places where the one industry is the dominant industry in that area. The car industry in Uitenhage may be a similar case and maybe in some of the homeland areas, the former homeland areas, former Ciskei we have huge textile mills or clothing factories, it would be a concentration, so if they shut down the entire area shuts down. But barring that I think other areas are really more balanced and have different types of industries.
POM. Do you find over the years the relationship between NUM, for example, and the Chamber of Mines has evolved from being one of confrontation to one of being a mutual recognition of the problems the industry faces, or is there still that element of confrontation there?
MG. I think there is still a bit of confrontation and I think the reason for that largely is that whilst at senior levels I think you can talk very sensibly to the managers and you can talk to the owners, at mine level I think things are not quite as changed, haven't changed as much in a practical sense because changing people is a very big thing, it's the culture that needs the change, the whole question of attitude. It's a whole question of how you relate to people. That needs to change. We can change the law, absolutely no problem, probably the easiest part to achieve, but to change people's attitude, to change the culture, I think that's a process that takes much, much longer. So I think the conflicts that still emanate wouldn't emanate at the head office level, it would emanate at grassroots level between the people at the interface, and there may be a whole range of reasons. It could be that on the one hand that the management is a bit intolerant, it could be that you have over-zealous leadership, new leadership that's over-zealous, just become a Branch Chairman or Regional Chairman and wants to flex a bit of muscle, show who's the guy around the block. But I am saying these are natural things. I think one should be realistic about that. But I think with time people will realise that things are changing, things need to change and that we are really in the same boat here as much as we deny that we are really in the same boat and that the workers are not only workers in the strict sense of the word, they are very often shareholders of those companies via their provident funds, their retirement earnings are also stuck in those companies, so that their relationship with their employer is a very complex one and that complexity I think we haven't yet - it's there, I think it's known but probably not sufficiently understood, the implications. And as we try to transform the ownership patterns in the country, maybe the commonality of interests may improve. At the moment I think there is still a long way to go.
POM. One thing that struck both of us just going round Johannesburg is that you see outside stores and places like Rosebank or Sandton or whatever, it says 'Italian gold for sale', jewellery, Italian jewellery at great prices or whatever and that there is no indigenous spin-off of industries in terms of gold. You export the gold to the Italians and then you re-import it and sell it here as South African jewellery made in Italy or whatever. Why can't gold be bought and why isn't there a bigger movement to create a value-added industry?
MG. Put it this way, the problem is that gold can be bought but it can only be bought with a license. You have to have a gold dealer's license to purchase gold. There are two things, let me put it on the positive, on the positive side is what we're doing at the moment, I'm also very centrally involved in that process, we're developing a new minerals' policy, I suppose minerals/beneficiation policy. Now that I've completed the Health & Safety I can now focus more on the development side of our industry, the mineral regime, the opportunities to improve minerals development and mining in the country and certainly downstream activity with effect to beneficiation of things like gold and other activities. The one problem that we've had, I think, is the recognition that we've got to develop a more creative jewellery industry. In fact recently, about a year and a half ago there was at, I think, the Basle Jewellery Fair, South African jewellers went over there with their wares and at the fair everyone rushed over to the South Africans, we were the flavour of the month, they rushed over to check our jewellery and when the people opened their jewellery they looked at it and they saw this was exactly the same like Italian jewellery. There was nothing new and that there was no ethnic jewellery around gold. I think people are only slowly beginning to realise that you can't compete with Italians with respect to the type of jewellery that they manufacture. You've got to find a new niche. So I think slowly this recognition is there but it requires entrepreneurship. I don't think government can solve that problem. I think what government can do is create the conditions that can maybe relax the opportunities to buy gold.
POM. When you say you have to have a license to buy gold, is that a restricted license?
MG. You see the argument is, in fact this is part of the thing we're grappling with now, they say there are at least about 20 tons, I don't know whether this is true or not, they say at least 20 tons of gold is smuggled, alternatively R200 million worth of gold is smuggled (I can get you the correct statistics, I'll check that), but R200 million worth of gold is smuggled annually in South Africa which obviously, as you can appreciate, has huge consequences for the fiscus with that loss. So the argument has been that if you allow free trading in gold it will increase the smuggling that takes place on the mine. The nature of our enforcement will become very difficult. It's very difficult to prove where the gold came from. So you've got to regulate it in some way by having licenses, so whoever has gold must have a license to deal and trade in gold. Now I must confess I am working through that, I'm trying to find the right balance between making sure the national economy doesn't lose and at the same time permitting reasonably free and fair trading activity. In fact in this Mine Health & Safety bill there's a clause which we think needs to be looked at and that says that mine managers can search any worker at any time and the reason they have that is precisely to be able to apprehend people who they think are involved in smuggling. That very clause may be unconstitutional.
POM. Sure, yes.
MG. But what I'm saying is you've got to strike the right balance. You don't want to promote a situation where there's huge scale smuggling because you need that revenue for the state. At the same time we don't want to smother your industry which doesn't permit people to be flexible in dealing in gold, buying and selling, making jewellery, etc. At the moment they have permits which seems fair in the way it's operated but there are only a few people who have the permits. You may have to extend the number of permits to permit people to trade. But this is a very thorny issue that is the subject of a lot of examination now.
POM. In terms of retrenchments, or the employment patterns in the industry, how is a balance struck between what I would call native South Africans who are laid off and workers who come from other countries?
MG. There's no balance.
POM. Is this an issue?
MG. No, not at all. Certainly from my experience it hasn't been an issue to date because retrenchment has been based on what we call 'last in first out', so it doesn't really matter where you come from, it's your length of service in the industry that will determine whether you go or whether you don't go. It hasn't been an issue yet. I hope it never becomes an issue because I think one of the major problems is we may have a xenophobic culture developing which I think would be detrimental in the long term. And also I think the historical situation is that many people from Mozambique and Lesotho have contributed to the national economy of South Africa dramatically and their regional economies depend on their remittances from the mines. Besides transport, for example, in Mozambique the mine remittances are the hugest contributor to their GDP and I think the same applies to Lesotho, it's a major contributor to the GDP. So even if we were to cut the life-line what you're really doing you're just going to force people back into South Africa because they're going to come and seek employment and then you just have them maybe illegally in the country which I think causes more problems. So rather have workers on contracts and they go back, if they wish and normally they do, back to their places of origin.
. Obviously it's still a very degrading system, the migrant labour system, but I think, I've really come to conclude that after years of looking at the situation that we're not going to do away with migrancy as a factor. Migrant labour in its most pernicious form, that is living in hostels and all those things, I think those things over time will probably be slowly brought to an end but you won't stop people saying, "Look I don't want to live in South Africa, I want to stay in Mozambique, but I want to be living in decent accommodation when I come here and I want to have proper facilities for my family to visit me." That's what I'm saying, so migrancy you will have but the migrant labour as we knew it in the past I hope we can do away with, that is with 30 people in a room with no privacy and things like that.
POM. When workers are laid off, often thousands at a time, what happens to them?
MG. They just go back to the rural areas and they stay there and they suffer I suppose, to put it bluntly. It's not easy. We try, in fact this is part of a very big campaign now to develop what we call a social plan, to have what's called social plan legislation, that is to develop some obligation on employers, and I think to some extent some on government, to provide social assistance in the form of retraining and new skills development so that people could do something else when they leave the mining industry. Part of the programme now is, in fact in terms of this new Health & Safety legislation, is to establish what is called a Mines' Qualifications Authority. The purpose of the Mines' Qualifications Authority is to develop a skills based system in the mining industry that ensures workers skills are enhanced and improved, portable and transferable so that your skills are not only mining related but those skills are such that you could go to other industries and move along. So that's one of the purposes so that by the time you are retrenched you could have a conversion course in terms of your retraining and upgraded to another level and you can do another job.
. I suppose the best thing we can do, because you can't solve all the problems, is to create the conditions for people to help themselves and the best thing you can do is provide people with a decent education and a decent skills base. With a decent skills base you are able to do things. I suppose in South Africa where the nature of the problem is just so big, unemployment, that unless we create an entrepreneurial set of conditions where people can do things for themselves on the one hand and where we are able to develop big industries people can go into industries, I think we're going to have serious problems. We have to find a way in which you can develop a culture of independence, I suppose, in people. You've probably been walking round in Rosebank with people sitting with their carvings and things like that, I think that's a sign. You see them also with beggars. What the interesting thing is that the difference between the beggar and the person that's sitting there selling his wares is the person selling his wares has taken the initiative, I suppose, be it selling fruit, it's not the best thing but they say, "Listen I want to do something, I don't want the humility of begging, rather let me try to do something." So I think to the extent that we can develop skills and education and opportunity for people to do things I think we can improve the situation.
POM. You've raised two or three very interesting issues, interrelated issues there. One is, what is the literacy level among mineworkers?
MG. Very low. I would say 80% of the workers have below what we call Form 5, that's below Standard 5.
POM. So when you talk about retraining you're talking about retraining essentially a work force that's illiterate to start with. Where do you start?
MG. The thing is this whole Mine Qualifications Authority as part of its programme has what we call 'adult basic education'. You can't build skills on a platform of illiteracy and innumeracy, you've got to build on the skills, on a platform of adult basic education, so a lot of investment, and mines recognise that, so for them it's also in their interests to improve workers' communication skills, their literacy skills, their numeracy skills. But thousands of miners have what we call a 'pit sense', they have a pit sense, they know the job, they can articulate the job but they can't actually read and write. They are competent, for all intents they are competent but they can't actually articulate, they can't actually read the signs, but they can see, they can hear the creaking of the rock and they know this is the problem, or they could see something and they know, they've got that what I call pit sense. So now you've got to take this pit sense, you've got to transform the pit sense into a level of skill that's tangible and recognisable and by this adult basic education you can do that and thousands of workers are beginning to go on to the courses and they are beginning to see the benefits of that, that if they go through those courses their pit sense will also be quantified and recognised and paid for. And employers recognise that because they can also enhance productivity.
. Now once we get adult basic education improved we can then move on to a much improved skills base. But it is a process and I think everyone accepts that, everyone knows that, but I think one can see the joy in thousands of workers when they can actually write their name and I think one must see this as a long haul but a necessary haul that we've got to do that, we've got to move our industry from a low skills, unskilled labour force to a semi-skilled and skilled labour force. It may mean less workers but more skilled workers, greater productivity, therefore greater wealth, greater wages. Those are the balances that we always have to strike. We have to find what the right balance is and that unions and employers and government will have to work together in achieving those goals and each one has a responsibility. Government has to develop a system that's recognisable, that's certifiable, that allows for the transferability. The employers have to put up some resources to make sure this takes place. The state will have to put up some resources. Employees will have to give up time, that it's a sacrifice, they have to give up their own time, leisure time to learn. So each one has to - we've got to develop a national sense of the benefits that flow to the country and to individuals and to families and to industries if we follow that path.
POM. Is it in the interests of mine owners from a point of view of profit or effort or whatever simply to have a primary resource industry where you mine, you dig the ore out, you export it and that's that, rather than becoming engaged in the larger more arduous task of building a more complicated value-added industry?
MG. I think that's a perennial debate in this country. I think that most people would accept that, that we can't only be a resource based industry, we've got to move to beneficiate and value-added. In South Africa it's happening. We've got the Alusafs of the world, we've got Columbus Steel, we've got a whole lot of industries that have now ratcheted up from being primary producers to more beneficiated produced and maybe later on we will be able to move to the finished consumer goods. But there's a complex contradiction in that. It's not as simple, I think, to say we want a value-added because when you are a primary producer of raw materials and you move to a value-added stage you also become a competitor for your primary consumer. The one that consumes your raw material then becomes your competitor because you are in the same market as them, so the extent of your vertical integration depends on to what extent you can dominate that market in your own right because you will now be competing with that same person that consumes your product and when you start moving into that market they will look for alternative sources because they will be losing the edge because you will be providing the raw material and you are beneficiating so they will be looking for cheaper sources.
. Whilst I share and agree that is the right thing to do one must always recognise that there is a contradiction in that particular process and to the extent that you can overcome those contradictions, fantastic, and they have. Simancor as an example, it produces chrome, it takes it up into the next stages of beneficiation and it exports the finished product. But now they have been able to be successful because they have some of the biggest furnaces in South Africa and they are accepted, they are going to be a world class player. Those companies that normally consume their chrome are now looking for alternative chrome sources so they are now competitors, you are no more a supplier.
. So in that sense beneficiation is all good and well but I think one has to appreciate the conflicts that do come out. Sometimes you could take it up, you could export the raw product, for example, they beneficiate on one level, they send you the refined product and you take it to the consumables. Each industry in each country, in each sector, you would have to decide yourself. But unfortunately that depends on entrepreneurship, that depends on state policy, it depends on state incentives, depends on tariff policy, but I think there's a general thrust that we must move in that direction but moving from the theory to the practice is not that easy. And you can't, I don't think that governments can solve those problems, that requires private capital maybe with government assistance, but with private capitalists, and we want to dominate this sector, we want to move into this sector, we want your assistance to move into that sector.
POM. Take that in relationship to the creation of jobs, the biggest problem facing the country is the inability to create jobs. You had the economy last year growing, at least for the first time, at 3.5% or whatever, business confidence was up, inflation was down, yet the one thing that wasn't changing was the level of employment, in fact it could even have been getting worse. At the same time you pick up the paper, or Business Day every other day and you see that company A, B, C, D, E, F, G, H, they are all reporting record profits, revenue soaring. What's happening, what's happening to their profits? Are they being ploughed back into the company in terms of capital intensity and they lay off workers or are they giving it out in terms of dividends or are they putting it into such things as shopping malls?
MG. The thing is, in the last I suppose ten years I've come to realise that the world is much more complex than I thought it was. What I thought was a very simple world, black and white, is actually much more intricate than that. I think the world has fundamentally changed globally in the sense that we live in a different age to what existed - I mean it's an obvious point but it has a dramatic consequence - to what happened at the turn of the century. Let's just take a practical example, at the turn of the century in London with all the horse dung lying around they thought this was going to be a major problem until the car came along and it wasn't a problem. Now today we're living in an information age which has just changed the quality of skills that are required. Today we require less people to do the same job. Today you've developed a whole range of instruments that we never thought was possible but they are all wealth creating instruments in a peculiar way, they are paper instruments but they are instruments that people trust and value and accept. Now how, when we read the traditional literature on how capitalism developed, did we ever contemplate that they would have derivatives, a whole range of derivative instruments, paper instruments that have an underlying residual value but pyramided up in a way that people actually accept and they pay for? This jobless growth is not a phenomenon of South Africa, it's a world-wide phenomenon.
. It seems to me that really I think the economy is changing to this extent that it is no more, it will no longer be the case that the significant area of job creation will be big industries. I think the nature of job creation will be in small entrepreneurial opportunities in which people with good skills can take advantage of that. You will still get your dominant sectors, you will still get your typical what I call industrial proletariat, industrial working class who work in factories, etc. But let's even take the sewing machine or the clothing factory, it's become so sophisticated now. They design no longer with a piece of paper, they design on a computer. They don't waste any cloth any more. It's just phenomenal to see. The consequence of that is to require less people, it's more knowledge intensive than labour intensive and that is the consequence of the type of world. So jobless growth, I think in the United States they grew about a million jobs in the last ...
POM. All low service.
MG. All low, all low. Now do we scorn that or do we say, look at least there are jobs? I must confess I don't have an answer to that. In the same sense they say, listen why don't you work for R200 in South Africa and at least have a job. I think it's some moral issue but who am I to decide what the moral level is? Sure, as a public representative I should know what an acceptable moral level is but I'm a bit reticent, I don't think I have the answer.
POM. In Europe if you're over 50 and you get laid off the odds are that you will never work again.
MG. Is that true? That's why I'm saying the whole process, that's why I think the biggest investment in people is their skills and their education because once you create the skills and the education you create a world in which they can make choices, they can make decisions, they can do things for themselves. Now it's not that easy I know because most of the people are not necessarily entrepreneurial, most people prefer to go to work and work for an employer but I hope that what we can generate in our society is the realisation that the way things are done is not the way - you don't have to necessarily work for a boss, you have to do things for yourself. You've got to find those opportunities. I don't know how but I suppose that's the ingenuity of people. I don't have an answer I must be honest.
POM. Two quick last questions. One is that I was struck last week, the second anniversary of freedom, the celebrations, articles written about how far the country has come and it's potential. That was on page 2 of the newspapers. On page 1 you had the rand is collapsing, the economy is falling apart, the foreign bankers are closing in. It comes back to this thing of globalisation that you're talking about. The economy did appear to be making strides, growth for the first time in 15 years, fiscal responsibility, fiscal restraint, and yet suddenly the rand takes a dive and it's not just Mandela's health or Chris Liebenberg resigning.
MG. The honeymoon, I suppose, is over. I think South Africa as a global player will now be subjected to the vicissitudes of a whole range of speculators and operators. Whilst the rand plunged someone made money, someone did very well, many did very well. But there is also a reverse side, the collapsing of the rand has now meant that the rand is under-valued and most people accept that it's under-valued, but there's a huge boom for our exports. We can now export much more cheaply, people can buy our goods more cheaply. So there's always, as I say, the dialectic, there are always two aspects to it and it's a much more complex process but, again, we live in a market driven economy, there are derivative operators out there that see South Africa's exotic currency as an opportunity to make money, it's now cheap. I just think that's how it is.
POM. To what extent, when it comes to making economic policy, is the country, a developing country like South Africa, in control of its own fate or to what degree is it really at the mercy of global forces?
MG. I think it is at the mercy of global forces. We are a very small country, our total GDP is probably equal to California. Yes we are a small player. I think we're probably in a boom from the political point of view of how we've managed our transition but I think South Africa has to accept that. I think we shouldn't pretend that we are a major player. We're a big player in Africa but in the world we're not, we're very small and I think we've got to be humble enough to accept that. It doesn't mean we have to go belly-crawling but I think we have to accept that reality. But the consequence of that is we've got the depreciation of our rand as a consequence of what's happened, I mean that our exports now become cheaper, it means the prospects of tourists coming to South Africa again increases. There's a whole range of different balances and I'm not even sure in my own head yet the benefits or the disadvantages. I think there are some groups that gain, exporters gain, tourists gain, some money speculators gain. The losses may be - our foreign exchange is under pressure, we can't travel abroad, we have to now spend six rand to the pound.
POM. It's great for us.
MG. Fantastic. I think there's always that dialectical relationship and there are different gains for different parties, that the country doesn't necessarily lose in its totality. The problem, I think, is that we are probably worried about inflation because prices go up. I think for ordinary people in the street their purchasing power has been decreased by about 20% and I think that's the problem but I think that when you're operating in a global environment that's what happens. This could very well be our peso crisis. It happened in Mexico. But it means for us to stop, just accept that we're a small player.
POM. To what extent do you think the country is hostage to the syndrome of living between the first world and the third? That is, you take young kids, they come into Johannesburg, they hang around the Carlton Centre, they see clothes, T shirts, jackets, whatever; we've a friend who was laid off at 60 but had to find work to keep his family going and what he does is he cleans sewerage pipes and he goes out recruiting people to work in the sewerage pipes and he tells them, "This is what you have to do, you have to clean shit pipes," and they say, "No way man, not for us, we prefer to be unemployed rather than to lower ourselves to the level of that", because it's an expectation built that a job should be about a certain thing which is a western concept.
MG. I don't know, I suppose that's the reality of choice, you can choose what you want to do. It's difficult. You can't force people to work if they don't want to work but I hope and I think we're getting there, I think we are developing a spirit that hard work brings rewards and sacrifice does bring benefits. I just think, for me, I think even my generation must accept that although we've won apartheid, we defeated apartheid, for a long time we must still make many more sacrifices. That we've really conquered freedom, I don't think we've necessarily conquered democracy and the full benefits of democracy. I think that we must accept that will be the fruits which future generations will achieve. For me it's still a bit of a struggle. I don't mind sacrificing today so that I think future generations can get the benefits of that, but if we think we want the fruits immediately then I think we will inherit very little for the future generations. I think we still have to accept, there's a long way to go to democratise the country, to transform it in a way in which new generations can benefit. I suppose maybe because I'm young I can still talk like this.
POM. Very last question is on exchange controls. Just personally, do you think that if exchange controls were relaxed considerably that the outflow of capital, people getting their money out of the country or money that's been trapped in accounts and people want to get out because they have left the country, would create enormous exchange problems?
MG. I think people who wanted their money out have already taken it out, I think so. I think, sure, when exchange controls do go you will see an immediate outflow of those who may have a bit of money that they haven't taken out. But I think what you also simultaneously do is that you create the conditions for people to bring their money back because South Africa is still a good area for investment in certain areas. What I am saying is when you create the freedom to move in and out it's much easier so South Africans that may have their money abroad now will also bring it back because they will be able to take it out. I'm not sure that we would have such a dramatic impact but I think one has to be realistic that one always errs on the side of caution. That's why I think we adopted a very pragmatic, slow process of liberalising exchange controls. I think we've only got about two steps to go still, the two steps; the domestic residents to do some investments abroad and then to probably lift it entirely for all to freely use their money as they see fit. But I think we've gone a long way and I think there is a substantial amount of confidence in the country. I think the policy that's presently being pursued is fine and it's a matter of when rather than if, it's a matter of when.
POM. OK.
MG. I'm sorry about the time, it's just that we've got to go.