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 It is the product of almost two decades of research and includes analyses, chronologies, historical documents, and interviews from the apartheid and post-apartheid eras.

11 Aug 1997: Skhosana, Mahlmola

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POM. Let me first ask you, this is just when I sat down to think of the questions I would ask you it just came into my head, is I picked up the paper over the weekend and there was an item in it that said that Barney Pityana, the head of the Human Rights Commission, was earning R400,000 a year and that each of the commissioners was earning R300,000, that the 26-year old who is head of the Youth Commission is earning R260,000 a year, and that these commissions are complaining about the fact that they don't have enough resources to carry out their work and that even in the case of the HRC there is a maximum staff number of thirty people involved. Is there something wrong here in what people in government commissions or statutory commissions are being paid, the huge sums of money they appear to draw, the perks they get and what's happening or not happening to the ordinary workers? Is there a distortion of values that's taking place?

MS. I think the problem here is that you must also understand that the people are governing for the first time and there is no set standard about who gets paid what and for what. The problem is if parliamentarians in parliament, ministers, keep on increasing their own salaries and all those other organs that are linked to government will probably want to increase their salaries. At face value I think their salaries look huge but then we don't have anything to compare with in terms of what their job productivity is about. As long as we don't have something to compare with we are always going to have this problem. On the other hand, if you pay these people less money you are then allowing them to maybe fall into the temptation of being corrupted. I think the spin-off is if you pay them well you are also seeing that you are making sure that they should not at any time be tempted to be corrupted by anyone. But I would argue that they needed to be paid a fair and decent wage which will make it possible for them to earn a living without being bribed, because if you pay them less then it can lead to them eventually being corrupted. So you also have to guard against that.

POM. I want to just follow up on that. There was this report by this international firm that appeared a couple of weeks ago that indicated that among 52 countries South Africa ranged 33rd or so in terms of corruption. Now there has always been a debate, is corruption getting worse, is corruption the same as it was, is just more of it being exposed than happened in the old days? What's your opinion? Since you brought corruption up and the necessity to pay people decent salaries to prevent the temptation of being corrupted, is there an inbred culture of corruption that spreads across all races, that if people can get away with it they will get away with it whether they are white or black and that what happened in the old times is in a way spreading over into the new times?

MS. I think that report needs to be verified by another independent institution, I really don't believe it that in SA corruption is the way they are putting it. Indeed if they were do it about crime maybe someone would say, it gives someone thought. One would not say there is no corruption in SA, I think there is corruption, but like any other country it is that if people are found to be corrupt the government deals with it, no-one would be protected. For example, when there was a problem in Mpumalanga on the housing scheme the Premier there stopped the project immediately, the project was stopped because it became clear that there are certain procedures that were not followed. So in any situation where people work in a system once people get used to the system they would know how to cut corners and how to beat the system. But the principle that I know of that exists is that it doesn't matter who you are, it doesn't matter your pigmentation, if you are found corrupt you will be dealt with and that's the bottom line. We have Dr Allan Boesak here, nobody is protecting him, he is being dealt with in the courts of law in this country. I don't know when those people made that research exactly who did they talk to and how did they - if you go to the SA Police Services, for example, they will give you a list of policemen and women who have been arrested and charged for corruption. They aren't leaving it. So to give the impression that the country is wholesale corrupt, it's not true.

POM. Just to turn to something else, in recent weeks there has been a spate of strikes in the public sector, you've had teachers out on strike, you've had municipal workers, hospital workers, education being brought to a halt, crippling municipal services. It looks in some ways as though labour is taking out its grievances on the general public. My question is, my understanding is, that an arrangement was made with the government last year where there would be a series of wage increases phased in over a three-year period but that a condition attached to that was that there had to be a cut in the size of the public sector and everyone agreed that the public sector was bloated from the old days of apartheid when you had 14 of everything and when you attempted to amalgamate the homelands and the independent states with the existing civil service structures of SA there were overlaps, duplication and whatever. What's the relationship here? Are the unions on the one hand not putting the interests of their members before the national good in the sense that they are even now saying one of their demands is that there can be no more retrenchments in the public sector? How is the government to deal with a situation where it has failed abysmally to achieve any significant reductions in the public sector, therefore it can't generate the savings it needs to pay for higher wages among public sector workers, where most people agree the tax level is already too high so it can't generate more revenue by raising taxes? What's the way out of this dilemma that seems to crop up every couple of years?

MS. First and foremost I think we must accept that the SA economy is undergoing structural changes in terms of GEAR and in terms of that government strategy obviously they will need to trim the public sector. You rightfully pointed out that the more people you have the more you cannot have savings. The government does not have money. Part of their strategy to generate money is to sell off certain state enterprises or privatise them with a view of recouping some money from that but even there they still have a problem because they have to spend something like R30 billion a year to service the international debt they accumulated. There is just no money, the government does not have money and there is no way out that the government has suggested that this is an alternative. Unions, of course, will always fight for the interests of their members but in the final analysis I think the government will eventually bite the bullet and go on with the retrenchments. So in terms of the unions the strategy that people must also consider is that they have to consider that the higher wages they are demanding the lesser of them will keep their jobs.

POM. The lesser of them are going to keep their jobs?

MS. Keep their jobs because the government can simply say, oh this is the amount you want, we'll give you the increments but we're going to retrench. So they have to back off eventually and say don't give us the money if you are going to retrench our members so we will settle for a lesser percentage.

POM. Have the ordinary workers gotten that far? I put this in the context of what Mr Motlanthe in the Mineworkers' Union said to me. He said, "You know there's not much to admire about the Afrikaner, particularly not in what he did to us, but when you look at what they did for themselves in 1948 when they assumed power and the way they had this cohesiveness, this vision, this determination to take over from the English and to transform their society, they did it with a vengeance and that's the will and determination, that national will and determination seems to be lacking in SA. There is still a lot of I'm all right Jack, if I get my wage increase and you lose your job well that's your problem as long as I've got my job." There doesn't seem to be a national spirit of we almost accept sacrifice in the short run so that we all can gain in the long run, if you know what I mean.

MS. But I think that we should also take into consideration that the world has changed since 1948. We are living now in a global world and it's no longer a bipolar world, it's a unipolar world and today you can't do as you please because you are also asking people to come and invest in this country so you have to be careful that if I do this those coming to invest here might not come. So no government at the level of the SA government is able to do as it pleases. It's a different ball game altogether so we will not be able to switch the clock back to 1948, not today. We have to find means and ways of dealing with the current world situation as we see it because if you take, for example, the multinationals, the WGAs, the World Bank, the IMF, now all these put pressure on the government so governments at the level of the SA government cannot do what the people did in 1948. It's a different world altogether.

POM. But doesn't that also mean that the workers of the world have to adjust too? The fact of the matter is there are low wage economies with which you are competing, the fact of globalisation. The fact is that if your level of wages and productivity are out of sync then manufacturers are going to move to more low cost producing countries and that labour can't just say these are our demands. Probably my best example might be the question of the 40-hour week. Now it took most major industrial economies years of development before they passed legislation guaranteeing a 40-hour week. I think even some of them still don't even have that legislation on their books. Very few countries, including the USA, have on their books that there should be paid maternity leave for four months. These are setting yardsticks that if acceded to will result not only in loss of jobs, make you less competitive and certainly in the case of maternity leave if it were granted on the level that the COSATU unions are looking for would amount to discrimination against women because an employer would say if two women apply for a job and one is of child-bearing age and the other is not of child-bearing age, he's going to make a rational decision and say I'll hire the one who is not of child-bearing age because if I hire the one in child-bearing age in six months I might be giving her four months paid leave.

MS. Let's start by saying the USA, comparatively speaking, does not have a good industrial relations system, so it's not a good example to make because their industrial relations system is completely different from what we are doing, it's lacking in a number of things. The 40-hour working week, we are not saying it should be now, we are saying it must be phased in over a period of five years. That's what we are saying. Maternity leave cannot be a problem in the sense that it shouldn't be a problem because already within certain industries, the metal industry for example, there are already bargaining councils there. Now you can work out a mechanism where the bargaining council pays X% and the UIF pays another percentage for that period. It doesn't mean that the structures are not in existence. They are there, they are in existence. All that we need to do is to utilise them and use the system and shuffle the system, that's all. Because at the moment if a woman is pregnant she qualifies for at least 55% of her wage from UIF. Now in the metal industry the UIF will pay something like 45% and the bargaining council pays the balance, which is 55%. So these things are there, they are in existence now. We are not asking for something which is not there.

POM. So what's the impasse with the Minister of Labour?

MS. There's no impasse with the Minister of Labour. The impasse is with the employers because they are not willing, they don't have anything to exchange on this matter. If they had something that they can exchange maybe it will be easier for them. Now they don't have anything but if they apply their minds properly, it's something that the bargaining councils are there, the UIF is there, so we just have to put it together. There is no need that someone must say we must discriminate against women, it's going to cost us money, it's not going to cost them extra money. The money is already there, it's just access to the money. That's what needs to be negotiated.

POM. So when a consultant like Gavin Brown estimated over the weekend that moving from a 45 hour week to a 40 hour week would amount to a 17% wage increase?

MS. How did he calculate that? Because if you move from 45 to 40 over whatever period you are also having to go and cost your productivity and in the process of course continuously companies are bringing in new technology to make up for the hours that people will not be working. So there is not going to be any wage increase because the productivity is going to increase, technology will come in, the quality of products will be better because they will use more sophisticated technologies. There is not going to be any wage loss. In fact there is going to be an increase in the profits of companies because they will produce better quality products, they can be first in the market. It will improve, it will make SA competitive. Where did he get that?

POM. Why do you think that a shorter working week, from 45 hours to 40, would make an industry more productive?

MS. Because when people work - what you need to do is not only the hours that you must look at, you must look at training the workers. You can make people work 60 hours a week but if those workers are not trained you're still not getting the productivity that you want so there are lots of other things that you need to put in, because now if companies are going to put money into training people then you've got skilled labour that can work those hours and your productivity will improve of course and the quality will improve. Now you have unskilled labour, what happens? You can make them work 100 hours you will still not get the productivity you are expecting. So we are going to have to couple this with other things, not just that. You must look at your training, you must look at your technology, you must look at the input and the output that they are going to put. So there are a number of things that you need to look at.

POM. Do you not think there might be a tendency for business to say, well if labour works less what we will do is we will simply substitute capital for labour?

MS. That is why we have workplace forums. The workplace forum is there to say if there is going to be retooling that must be negotiated with workers. It does not necessarily mean that every time when you bring in capital labour can be kicked out. You can still move people around in terms of their age, in terms of their education or skill training. So you look at all that, you make your continuous assessment, your human resources will have to make continuous assessment. Those things must be negotiated. It doesn't mean that necessarily that when you bring in technology people will be walking out of the gate.

POM. I want to refer this to - it's a theme I recurrently bring up with you now, I bring it up with everybody I talk to on the economic side and that is the singular inability of the economy to create jobs, in fact that the number of jobs in the formal sector has for the last year for which figures are available, which I think is 1995/96, there was a fall in the number of jobs in the formal sector. In fact the only major increase in jobs, the category in which jobs increased was the public service sector which was supposed to be cutting back and retrenching. If this continues to be a problem of the size that it is and in many economies the government is regarded as being the employer of last resort, that when you have high unemployment the government steps in and becomes the employer of last resort, how can you at the same time engage in very significant cut-backs in the public service sector? Aren't the unions going to fight tooth and nail to maintain the job of every single one of its members knowing that there are no other jobs out there in the labour market, that it's not a question of somebody being retrenched in the public sector and being able to find a job in the private sector? That you go from being employed to perhaps permanently unemployed?

MS. First and foremost let's talk about the economy failing to create jobs. I don't think the economy has failed. I think there has not been an attempt and a serious attempt from big business in this country to invest in creating jobs. If you look at conglomerates in this country, big business in this country, they have made profits but the higher profits they make the employment figures don't grow, so there has never been an attempt because they are looking at taking money out of the country and investing offshore, that's what they've been concentrating on. That's basically the reason why this economy is not creating more jobs because those who have the resources to create jobs are not putting the money where they are supposed to put it. And that's a dilemma. If SA companies are not going to invest in this country we should forget that people from outside SA will invest in this country.

POM. If I was a businessman and I was looking at business in this country I would say SA business won't invest in SA, why the hell should I?

MS. So the SA business community has an obligation to invest in this country then others can follow. But you must also understand that worldwide the days of labour intensive investments are gone. People are investing in capital intensive investments worldwide so we are not an exception in this country.

POM. We talked about this, growth with no job creation.

MS. People should not single us out as if we are the only ones. Worldwide, North America, Europe, people are losing jobs there and it can also be permanent in terms of that. It's worldwide, it's not only us in SA, it's all over. But people must also take into cognisance that this economy - we are carrying the whole region, everybody in the region is coming here, we are carrying the whole region. So that's another problem that this economy is facing. It's absorbing more people, it's carrying the whole region with all the problems we have. On the question of public sector unions I think we've got to be realistic and my view is that if the unions in the public sector continue to do what they are doing they are going to lose out so the best thing is to settle. But the other point that we must make, let's take the teachers for example, it is still the African children who are denied education. Everybody else in the country in the teaching profession is teaching. It's the African teachers who are denying African children education by going on all these kinds of strikes. So eventually it is the African child who will walk the street without a certificate and that is one thing which is very sad and we are expecting the government to do something about it. We do not believe that the government must just pour money into the teachers. They have to get the money they are asking for and in terms of merit what is the productivity level? Let's look at matric results, for the last three years what have they done? Have they improved? They have not improved so what justification do they have to use my tax to earn a higher salary? They have got to earn that salary. The constitution is very right in this country, it is clear, teachers have a right to go on strike, but children have a right to be educated also. Now teachers in exercising their rights they should be careful not to trample on the rights of children which is what has sadly happened in this country.

POM. Coming back to this thing, where is the spirit of Dunkirk where the people are inspired to realise that in the short run everyone must make sacrifices and if that means that I don't get my 10%, that I get 5% instead of 10%, but that my getting 5% allows somebody else to keep their job and in the longer run allows us all to get 10%, where is that kind of spirit of purpose? I suppose that's what I'm really getting at. Is it because the population is too diverse? Why isn't Mandela using his moral authority? Why isn't he out there saying, the way he can do on so many other issues, why isn't he out there on the economy in the same way?

MS. I think he lost it during the elections. It was never there during elections and that is where they failed. That's number one.  Number two, I think the problem is that their projections were from one election to the next elections. We are talking about by 1999, before the next elections we will be doing this, instead of having had a vision of the next 20, 25 years or 30 years this is where we want to go. So there is no vision because the vision they portrayed was from 1994 to 1999. I think that's the biggest problem. They didn't go beyond 1999. At the moment, and also the RDP as it was popularised, people were given the impression that we vote these guys into office and tomorrow things fall from the sky. People were never prepared that we will have to go a longer period and make sacrifices. For example, if you would stand on a public platform and you say when the Israelites left Egypt it did not mean that their problems were resolved so they had to meet a lot of problems.

POM. And you're just beginning.

MS. That message was never there, it was never there. Now unless those who are going to come in 1999, they put a vision which says for the next 20 or 30 years this is where we want to end up, it means irrespective of who comes in the next elections but the vision is there. But there was never a vision. You can't have a vision of five years. That space of time is too little to do anything so they said we will this until 1999, they killed it.

POM. Let's just follow up on that. First of all the RDP. It has disappeared from the language. You can scan newspapers, public documents, whatever and finding the word RDP is as difficult as finding the word nationalisation. It's gone. I was talking to one man I have a lot of respect for because he seems to tell it as it is and to a number of prominent trade unionists, whom I won't mention but in very senior positions, and they all agree, when I was talking to Keys he said to me GEAR is dead.


POM. No, GEAR. He said the RDP has been left in the dustbin but GEAR is dead, this economy in the manner in which it is presently operating and will operate for the foreseeable future, that is with the level of government expenditure of over 20% of GDP, with an extraordinarily low savings ratio in the country, basically an over-consumption economy, with the very moderate inflow of foreign investment, it is simply incapable of growing at the rate of 5% a year and that the reality of the matter is that it can at best expect to grow at about 2½% a year. And if one looks at all the projections, and I have them all here some place, made by all the different banks, consulting agencies, economic fora, what have you, they all have growth for this year and next year ranging between 2.2%, 2.5%, I think one or two go as far as 3% but among some of the key players on the economics side, and not just capital but on labour there is the growing realisation that GEAR is a fantasy. The economy will not grow at 5% a year with the result being there will be no job creation, there will be no economic transformation as was envisaged in the early days, there will not be any significant alleviation of poverty, that the gap between the haves and the have-nots, or between the first sector and the third sector is going to stay more or less what it is, that the only difference in the economic scene, so to speak, is the burgeoning of a middle class black elite coming from the civil service and the professions and whatever. But that's about what it's going to be for perhaps a generation.

MS. GEAR is nothing else but a structural adjustment which is self-imposed. In the rest of Africa it is imposed by the IMF. In SA it's self-imposed by the government and that's why they call it GEAR. If you look at the trends and what has happened where social adjustment has taken place it has never created wealth for anyone. In fact it has brought misery. Now I would tend to agree with those who look at GEAR as not going to solve our problems because structural adjustment problems have never solved any country's problems. In fact they have made it worse. We are no different. What they call GEAR it's nothing but a structural adjustment which is self-imposed but if you look at the characteristics of any economy that is undergoing structural adjustment that's what you find in this GEAR thing. So it's not meant, it's geared at servicing the debt more than anything else. Maybe they will succeed there and that's all about it, servicing debt and nothing else.

POM. But what happens if, again, and I suppose this is my concern, that maybe for years to come there is no real change in the employment situation and indeed that you may even have a situation of increasing unemployment as more and more kids come on to the labour market and the labour market can't even absorb new entrants never mind taking care of the backlogs. If in fact poverty remains at the level it's at, maybe a little bit here and there some improvements, there is some improvement in electricity, some improvement in water delivery and some improvement in the delivery of houses, but if overall the mass of the people remain as poor as they are and urbanisation continues at the pace it's been going at for the last 20 years, what's in this so-called new South Africa for the bulk of South Africans? What can their leaders say to them, what have they delivered to the people?

MS. What I think is going to happen after 1999, people in this country, particularly black people in this country, will stop to vote in terms of pigmentation as well as sentiments. They will begin to be looking at those issues that they didn't look into before, economic issues, their own personal positions, whether their standards of living have improved or if they have gone down. So after 1999, the next elections something about 2004, it will be based on economic policies and what's going to happen is it's no longer going to be only pigmentation and there will be no sentiments. The whole aura of Mandela and all will be gone. The youngsters we are talking about, these are kids who are still at school now, some of them will not even have known Mandela so they will have no sentiments, they will be looking for someone who says what he is going to do in terms of their personal situation, in terms of jobs, education and training, whatever. So the voting patterns are going to change and parties are going to win or lose elections in terms of their economic policies.

POM. I'll ask you a question which comes up again and again and again and it's come up in the last couple of weeks and that is with regard to their being some sentiment for the formation of a workers' party. Can the alliance, which ranges now from having an economy policy that is really new-Thatcherite to be blunt about it, to the SA Communist Party, to COSATU which have come from almost different economic principles in terms of the use of resources, how can three such fractured bodies in terms of ideology, if one wants to use that word, economic ideology, hang together in the light of these massive problems?

MS. I think what we are finding there within the alliance, it's what they call in human resources, group dynamics. Groups dynamics within this alliance of COSATU, ANC and the Communist Party. I think these differences are not beginning now, these are historical differences, but what they did in the past was to suppress their own differences because they had a common enemy in fact. Now they have fought the common enemy, the common enemy is not there, those differences are beginning to surface now. It happens.

POM. Sure.

MS. Anywhere else. So they are undergoing that process. But the challenge for both COSATU and the SACP is whether they can stand on their own outside of the ANC. Will they be able to make it on their own, particularly the SACP? Can they stand on their own with COSATU there and be on their own and go there and tell people about socialism and get voted into office? It's another matter. So that is the challenge they are facing. On the question of a workers' party there was an article in the Guardian/Weekly Mail which has been rebutted by COSATU. I think people have been talking about a workers' party but outside of COSATU, those who are belonging to say, the Trotskyites, the fourth international - they are talking about it, but whether they will be able to pull it off I'm not sure.

POM. Is this like fringe talk?

MS. I'm not sure, I don't think it will happen now or in the future. It will take a long time before it can happen.

POM. What about the prospects for this Bantu Holomisa/Roelf Meyer endeavour? Is that another pie in the sky, 100-day wonder that will just fall by the wayside?

MS. I don't think they will get anywhere because so far they have not told people what they want to do. They don't have a political platform except that they are anti-ANC. Now I know what ANC has failed to do and what it has succeeded to do. If you want my vote you must tell me what you are going to do for me. Don't tell me about the weaknesses and the failures of ANC. I know that. Now so far they have failed to do that.

POM. They said they will announce that on 27th September when they launch the party, they will have a programme that's orientation will be towards the alleviation of poverty and the eradication of crime.

MS. Let us wait until we get there, but so far they have said nothing that can make people say we want to vote for them. They have said nothing so far except that they are anti-ANC and I think this is not only Roelf Meyer and Bantu Holomisa, even the other opposition parties where they are going to feel again, is where they are just going to go on and rhetoric, like De Klerk is doing, the anti-ANC rhetoric, not telling people what you are going to do for them but what the ANC has failed to do. I think that's going to be a problem

POM. But then if post-1999 you have the Meyer/Holomisa effort marginal, gets 5% or 6% of the vote, you have the NP share of the vote declining, it's losing some of it to the DP who goes up a couple of percentage points, you have Inkatha still remaining largely a regional party, what opposition is there to the ANC except the ANC? Is the ANC its own opposition?

MS. That is why within the ANC itself as the old guard in the ANC moves, Mandela goes and other old guard people move, I think the ANC will also move, it's not going to remain where it is now. I think it will also move but like I said earlier -

POM. Move or split?

MS. I think some people will move out but it will not split, it will definitely not split.

POM. It will not split because?

MS. Because it's a dominant political power, so you will rather be inside that power, it will try to influence things inside, it's a question of people saying rather be inside the tent and piss outside than piss inside and be outside. Because if you take Holomisa, for example, he is struggling now to get the party off the ground because he comes from this huge machinery that is already oiled so very few people will have the courage of moving out of the ANC. Rather what other people are going to say is let's stay in the ANC, like the SACP does, maybe might say stay in the alliance and hope that as time moves on we will be able to influence the party towards a different direction. I can't see the ANC splitting and a lot of people have been predicting that. I don't see that happening.

POM. NACTU and COSATU, what barriers still stand in the way of there being one labour federation in the country? Would your combined muscle, or would your combination, not give you a greater muscle than either of you exercise individually?

MS. I think it's politics, it's politics, because we cherish our independence. We met President Mandela last Thursday, he visited our offices, and one of the things he said amongst many things, he said he thinks we should continue to stay independent of political parties in order to service our members correctly. So I think with COSATU the difference is that COSATU has this alliance, how much are they willing or can they be able to move out of the alliance I don't know. I think the difference, in terms of the interests of workers, of worker demands and all that, we've got everything in common. It's the politics.

POM. Do you think that COSATU has an identity crisis of sorts in this regard, that on the one hand it wants to serve the interests of its members and that's agenda A and that often comes in conflict with being part of what is the governing alliance and having to accept the decisions of the major partner in that alliance, the ANC?

MS. I don't think they have an identity crisis. I think within that alliance they still enjoy an autonomy because they still go on strikes, make their statements, do whatever they wish to do. I don't think so. But also I think you are right, at some point you can take it to a particular level, at some point you have to moderate your actions because of the relationship that is there, eventually they have to moderate their actions.

POM. Somebody suggested a brilliant scenario to me, and this was in terms of a Mbeki government, that what Thabo should do is get Tito to become Secretary General of the ANC, bring Sam Shilowa in and give him Tito's position and essentially move Sam from COSATU and bring him inside the government as Minister of Labour.

MS. Even before you complete I will say no, that will not be correct. Tito is one of the best ministers we have, particularly on that portfolio. Sam will not do it, will not match Tito in terms of performance. I will still say that Mbeki should keep Tito in that position. If they want to take Sam, take him somewhere but not in the labour portfolio. I have the greatest regard and respect for Tito and I think he is a good minister. It doesn't mean that you don't have differences with him. We do have differences with him but in terms of his performance he's professional so it will be a mistake to think you can remove Tito and replace him with Sam Shilowa. It would be totally wrong. Maybe it can even come nearer disaster because once Sam is a minister some of the things that he is demanding now he will not be able to deliver so workers will be more on the streets than now. Talk about those living in glass houses not throwing stones. He will realise the reality of government. If my opinion will be canvassed I will say Tito still retains that position and maybe make Sam Shilowa General Secretary of ANC. Don't take Tito because Tito is capable of handling business. He can talk to business. Business people understand him, they want to work with him. I don't know how many business people want to work with Sam.

POM. Yes there are some slight personality differences.

MS. Personality differences, the way Tito does things and the way Sam will deal with things. I think if Tito leaves that department any minister willing to come there will have problems. We will have more problems.

POM. Black empowerment. Who is getting empowered or is this empowerment in the real sense of there being the creation of wealth owned by black people or is it a case mostly of a new black elite acquiring paper wealth but not control over the ownership of the instruments of production and a distribution that results from that?

MS. I think you have summed it up. If you look at an American space ship when that rocket is to be flown it takes a lot of energy to take it off the ground and up to the sky. Now if you juxtapose that with SA black people who are suffering from abject poverty on their own, they can never get off that. You need a whole lot of government programmes to inject in the economy to lift people out of that poverty. On their own they will not do it. There was a suggestion of doing it through RDP which has been discarded. There is nothing that has replaced RDP. The few blacks, like you have said, that are supposed to be now getting into business, paper money, they owe even that paper money. It's not money they have, they still owe. Part of these consortiums where billions are demanded it will mean that you will pay this money, your children and your grandchildren will never get out of that. So at the moment there is no strategy of spreading this and lifting people out of this poverty. So the few that are there, even they themselves, like you rightly say, they don't own anything, they don't manage these institutions. Even managing these institutions is going to cause a problem in terms of skills that are needed to manage those institutions.

. So, again, it comes to this issue I raised earlier on that you needed a vision longer than the next elections, you needed to say that in the next 20 years or so we need to produce youngsters who will be actuaries. So you take youngsters to start Actuarial Science at various universities, you will take some youngsters overseas to study in America or in Britain or in Germany in other disciplines. Then you know once these youngsters come back you can begin to infiltrate them into industry and even in government. There is no plan I know of of that nature. Again, unless you have that, because that is what gives people a vision - you take mining for example, if Oppenheimer says OK, you black chaps, I give you a mine, we hardly have mining engineers. Now what do we do with it? So it's skills transference also that must go hand in hand with this thing but that is going to take some time. I don't think you can produce a mining engineer or an actuarial scientist over a period of five years. People must go to school, get the theory, they must go and work and get the practical experience, it's a number of things that are involved so that strategy is not in place. That is why these empowerment strategies at the moment are not seen to be bearing fruits because there are a few individuals there who don't even have the necessary skill at times to deal with these things.

POM. What does NACTU do, for example, in terms of its pension functions? Does it have an investment arm that manages where the pensions go or does it try to use them for black empowerment purposes?

MS. At the moment we don't have - we are beginning to put what we call Nachold, Nactu Holdings, at the moment we are still working on that. What is happening now is that various affiliates, in fact eleven, as well as Industrial Council level, that our associates are being trained to be trustees of pension funds, so they see various trustees. But you also understand that while they sit there as trustees you also need people with skill to do that, to understand what's happening. Two years ago we approached University of South Africa, the Business School, to begin a programme that will provide our people with basic skills of economics, financial management, so that people can take a newspaper, a person is able to see the Stock Exchange, how the companies perform so that they can take informed decisions. Now it takes time to get people through the process as well as getting involved in being able to read financial statements, the terminology, that is always strong. So it's a process that we are undergoing now and once we have done that and we have people, because you need to hire people, professional people who will do that. You don't want to gamble with pension funds of people, the lives of people here. You can't have people taking chances there. The Barings Bank in Britain collapsed because of some of those things so we have to be careful how it's done, but we also have to do it in conjunction with the employers because they also put some money in it. So it's not something that we can go it alone. We need the employers to be there to agree and the government, of course, to come and oversee it, that the investments will be guaranteed, nothing foul will happen to those investments.

POM. There were a number of things we talked about in April that I just would like to run through with you and see has anything changed. One was that at that time there was a proposal that was released by COSATU, yourselves and FEDSA which had taken issue with proposals put forward by the SA Foundation. Has anything happened to that, has there been any furtherance of the debate or is the government's emphasis on GEAR in some way inhibiting a more free and open debate on economic issues? For example, you say to me, I think I heard you saying and tell me if I'm correct or not, GEAR is not working. I talk to other prominent people in labour and in business and they say GEAR isn't working. I don't hear anybody in the government saying GEAR isn't working. I don't hear anybody in the media saying GEAR isn't working, we ought to be looking at some other options. In fact there seems to be almost a conspiracy of silence to pretend that the whole thing is working.

MS. Our view, we don't have proof of this, but we think business might have contributed in the drafting of GEAR because at some point they were saying that they are willing to dump their own document and go along with GEAR. So they wouldn't say that if they didn't make a contribution or if there is nothing in there for them. Now if business supports GEAR in this country, now we all know that particularly the print media is owned by business in this country, now you are not going to find an article that criticises GEAR because the owners of the newspapers support GEAR.

POM. The owner of the newspaper read by most Africans, The Sowetan, is now 95% owned by Johnnic and is therefore, at least in theory, almost wholly owned by a black controlled conglomerate.

MS. Black controlled conglomerates, but who are some of those guys? If you look at some of those guys they are personal friends of powerful ministers in government so you don't expect The Sowetan to take radical - because they are also close to government. So any newspaper, as far as I am concerned, there is nothing like an independent newspaper. Newspapers will always reflect the politics and policies of those who own that newspaper. If they are closer to the government, the owners of the paper, it will always continue to reflect the government policies positively. I expect The Sowetan to do that.

POM. It's like the thing of the Emperor has no clothes. Last year if GEAR met its projections for this year - if GEAR made its projections for last year, its first year, it would have created 250,000 jobs. Instead of 250,000 jobs being created you have a situation where there may be fewer jobs this year than there were last year and no-one is saying this programme is failing.

MS. No-one will say that because, like I say, particularly from government side because if you say that it means you are putting your own job on the line so you don't expect anyone from government. So that people from government, I think they've got one mandate, defend GEAR at whatever cost because if they begin to admit that it doesn't work then they must go back to the drawing board. They will be in conflict with business, they will be in conflict with the multinationals because what is also happening is that GEAR was also meant to appease multinationals to come into the country to invest. They didn't come because multinationals don't invest in a democracy. They make their profits in dictatorships. Now that's part of the problem. Nobody is going to talk. Now what that means is that the labour movement now has the responsibility of saying it doesn't work. You don't produce jobs by manipulating a computer and coming out with figures and saying these are the figures that jobs are going to be created. You don't.

POM. Privatisation. Increasing emphasis on privatisation?

MS. It's almost getting made, privatisation is going mad in this country. The government of Mpumalanga, they are about to conclude a deal with a French multinational to supply water for the next eight years. Now tell me, if a multinational is going to supply water do you think the multinational is concerned about people in the rural areas? I don't think they are concerned about the rural areas. They will be concerned about maximising their profits and where will the money go? The money will get out of the country to France. It's privatisation going mad in this country.

. What we have said is let us look at those state enterprises that are not making money then we cannot say the state must keep them. For example, the Transkei Airlines, it used to be a homeland there, they had an airline. It's working at a loss because nobody flies there. We don't think the government should keep that. The government must get rid of it because it's taking a lot of money from the government for nothing.

. But we are saying there are certain state parastatals that the government has a responsibility for. For example, supply of water is one. We don't believe that the government can take that responsibility and move it somewhere. Supply of electricity for example, why should it go to someone else, it's the responsibility of government. Education, health. As long as the government is taking taxes from us they must have a responsibility of delivering. We can't have a situation where government just takes taxes and wash their hands and say to the private sector we'll do these things. No, there must be a limit.

. But we are saying, like I have made an example, the Transkei Airlines why should government keep it? Let it go. If someone doesn't want to buy that airline then shut it down because it doesn't give money and we are saying that if, for example, it's a railway station or Jan Smuts Airport we don't believe that government must run a small coffee shop there. Give it to someone else to run that coffee shop and pay rent to the government and pay tax to the government. So you can receive more revenues because you'll get rent, you'll get tax.

POM. How about the Telkom privatisation?

MS. Telkom, again, we have a problem there because if you are going to privatise Telkom we have companies, you've got members who are supplying Telkom with components, telephone components. Now if you bring in a partner from outside who is going to say I want to get the same components from an EPZ country in Asia which will be cheaper, it is going to cost us jobs in this country. It's going to cost us jobs. So that strategic partnership they are looking for they have to be careful that it doesn't lead to a state where we lose jobs and obviously if it's part of government policy that they must electrify every part of the country including rural areas and bring in telephones, once we begin to privatise they can never be cheap, they will never be affordable. It's a question of government saying that these things are there. If you want them you can have them.

POM. Does the same thing apply to the privatisation of ESCOM?

MS. ESCOM, it will be expensive. You see it's a question of Marie Antoinette, you don't have bread, you can have cake. It will be expensive so people will not afford it. Like now, since you arrived here you have picked up that there are problems in the township in terms of payments of services and all that. Now the problem is you have a council like the Johannesburg City Council, people who live in the magisterial area of a particular council are supposed to pay equal for the electricity units or water or whatever, they must pay equal. But the very council does not pay its own workers equally. White workers still get more pay than black workers and you are asking people to pay equal.

POM. They do? Doing the same job?

MS. Doing the same job. They don't get paid equal. I think before you leave here phone one of those councils and let them give their wage structure and ask them, are they paying the lowest white paid and the lowest black person paid and see whether they are equal. They have not closed that gap. That gap is still wide and you are asking people to pay equal.

POM. But here you have a black controlled council that can say that disparity is going, executive order.

MS. That council is not controlled because the bureaucracy is still the Nationalist Party guys and they are saying the figures are here, where do we get money to pay what you are saying? They have not done that. I don't remember reading an article that councils have taken a decision that everybody will be paid equal. Now you want equal payment for unequal paid people? So that's part of the problem. Then of course you've got the greatest majority of people who are not even employed at all. Some are doing piece jobs. It's a community of all that. There is no system in government like you will find in other countries where you will find some subsistence for unemployed people so that you can pay your electricity and your basic needs. There is no system like that. There is the UIF and after six months you must go and starve and die. It doesn't go beyond six months. So we still have a long way to go to get these things in place.

POM. The other contentious area in the realm of jobs is - well first of all do you find it just an irony that Jay Naidoo, the founding Secretary of COSATU, was the minister who presided over the largest privatisation, who was one of the major advocates of nationalisation while he was a trade unionist, presides over the largest privatisation programme ever passed in SA?

MS. I think it's not an individual that counts, it's the system, the government. Jay Naidoo is just an individual, just an instrument. He found the system there so he's acting within that system. He's subject to contradictions, I don't know, but I think he's subject to contradictions of his own personal beliefs but as an individual I think you can remove Jay Naidoo today, put someone else there and that programme will go ahead because that's government policy. If he feels very strongly about it then it means he must leave government.

POM. And my last question relates to this contentious issue of one of the few areas where while there is potential for creating jobs, the arms industry where you've had the sale of arms to Kuwait and Saudi Arabia okayed and the sale of arms to Syria and Turkey kyboshed. Is there a coherent policy on this issue? What is the trade off between the human rights culture on the one hand and the necessity to create jobs here in SA on the other?

MS. I think the biggest problem we have there is the United States of America, even before you talk about the human rights culture. What Americans are saying is that if someone is their enemy that person is also your enemy. America's terrorist is everybody's terrorist. Now my experience in this country is that as late as 1989 while the Americans were still declaring the ANC a terrorist organisation, the people of this country were seeing the ANC as their liberator. So America's terrorist is not everybody's, it's another man's liberator. We have to start there. The government must be strong there. If you look at those two countries, particularly Syria, it's a country that Americans were the first to make noise but if I was in government I would say we go ahead with the sale because we should not have a tunnel view of life. Whether SA sells arms to Syria or not, if the Syrians have got the money they will get their arms eventually. They will have their arms if they have the money.

. Now the human rights culture in this country at times it is misplaced because if South African human rights activists think that they can be the world police I don't think they will succeed. I don't think they will succeed. The world over has problems and those problems, particularly of foreign policy, I don't know of any country that has a foreign policy which is based on philanthropism. To me there is no consistency in any foreign policy. Earlier on we talked about Britain. They went to war in the Falkland Islands with the Argentine, but they gave Hong Kong to China. Now to me foreign policy must be based on your vested economic interest, not on philanthropism. We might say if selling arms here in this country will not give us the money that we will get from country B so we go to country B, because that's what we want, we are looking for money to create jobs for us, but as long as you're going to be basing your foreign policy on philanthropism it won't work, it doesn't work. I don't know of any country that does that. So our Foreign Office must develop the kind of foreign policy that says we put our economic vested interests first.

POM. So your position would be that if a country doesn't get arms from us it's certainly going to get them from some place else because there are hundreds of countries out there manufacturing all kinds of arms and selling them to anybody who comes up with the money and that we should be concentrating on our interests and our interest is to create jobs here at home and if that involves selling weapons to other countries so be it?

MS. No. We have to put conditions. For example, you cannot sell arms to a dictator who is going to oppress his own people. Arms are sold with the purpose of defence against a foreign enemy but if you have an obvious dictator, let's take for example in Kenya, if the Kenyan government comes to SA and say they want to buy arms, who are they going to use those arms against? You can't sell them. You say no. So you have still to be careful who you sell arms to at all times and you must give conditions that we can sell you arms on these conditions. You see if you just say we will sell to everybody now, if Arap Moi comes here and wants to buy arms why should we sell him? Arap Moi from Kenya. Why should we sell to him? We should say, no, you don't have a military problem in your country, you've got a political problem. Go and solve it politically because that's what you need to do. You can't just sell irrespective. If there are problems in Rwanda then we have to look at what are the problems. If you are going to sell arms here are you going to contribute to peace or are you going to exacerbate the situation? Sudan is the same. We have to look at all that. I'm not saying they would sell arms, period. No. I say look at it, look at people, how the arms are going to be used. If, for example, Suharto wants to buy arms in this country we've got to be careful that is he going to use the arms against the East Timorese? If he's going to use the arms against the East Timorese we say no. Who is threatening you? You've got what? There are two million people there, East Timorese about 200,000 unarmed. Why should we give this guy arms? He doesn't have to get those arms. But still it doesn't mean that if we haven't sold them arms he won't get them.

POM. Just to wrap up, after these number of years are you, I won't say optimistic or pessimistic, but do you feel that there has yet been a real understanding of what must be done to lift the country up from it's present state, leaving out the first world sector like where we're sitting right now, but to lift the rest of - ?

MS. I think all of us are beginning to learn and beginning to accept that it's going to take a lot of time, it's going to take energy, it's going to take commitment to put in resources and it's not going to happen overnight. That's lesson number one. Number two, we are beginning also to learn that no-one from outside is going to do it, we have to do it ourselves in this country. Number three, we are also learning the discipline that there is no alternative except to be productive in this country and as we are learning, ten to fifteen years from now this country will be a different country. A lot of people complain that the unions are powerful, the unions are going on strike and all that, but the people in France, in Britain, in Germany, unions do the same thing that we do here. It's no different, except in America of course, your industrial unions it's horrible. But Germany, France, Britain, the unions are doing the same thing here. So those who are supposed to invest in this country they know what's happening in their own countries and the trade union movement shouldn't be a problem, it's not a problem, we are not a problem. We are simply victims of the global economy.

. You take countries like Botswana, it's a long standing democracy, why are they not investing in the country? It's a long standing, shining example of democracy in Africa, but they are not going there in great numbers. No they are not because of the size of the country, where the country is in terms of geographical situation, the population is not there, 1.3 million people, they can't invest there. So we have the population in this country, we have the infrastructure in this country. However, we have democracy. Now these guys will always want some little dictator where they know they will make more profits. That's all. It's not that the conditions are bad in this country, the unions are powerful. We are not powerful here. I mean government takes decisions and ignores unions and they have done that in the past. Here they have done it. Mandela said it publicly on I don't know how many occasions that GEAR is a government policy and it's non-negotiable and those matters they are being negotiated. So it's not true that the unions are so powerful that they control government, it's not true.

POM. OK, thank you ever so much again. I'll only be back another three or four times and I'll be finished.

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