This resource is hosted by the Nelson Mandela Centre of Memory, 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 It is the product of almost two decades of research and includes analyses, chronologies, historical documents, and interviews from the apartheid and post-apartheid eras.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 Oct 1995: Cronin, Jeremy
POM Jeremy, when I come back here I hear less and less about the SACP, sometimes it appears as though it has disappeared from view. What has happened to the SACP in the last 18 months and how has it redefined its role in the new South Africa and how does it continue to redefine it's role in terms of its experience of the last 18 months?
JC Right. I think it's not an incorrect observation entirely as such, I would be a little bit gentler on us, to note that the profile of the SACP is perhaps a bit less than it was at certain points in the negotiations period and the run up to elections. I think there are several factors at play there. The one has been the irreplaceable loss of our two most high profile leaders, Joe Slovo who died at the beginning of this year, and of course the assassination of Hani our General Secretary. I think a second factor was that we were used by our opponents as a kind of bogey figure and so some of the press attention that was coming to us, and it was often via a personality like Hani, which was not necessarily good publicity; it was publicity but publicity that was intended to portray the ANC as being hijacked by mindless red forces or whatever. That would be one factor.
Second factor would be, I think, that immediately after the elections there was some attention around the party particularly in the July period when there was a round of workers' strikes and the ANC or some leading figures in the ANC, including the President, came out criticising COSATU workers, portraying them as an elite taking away resources from the Reconstruction & Development Programme. The party intervened, a few days went by, but we intervened quite firmly on that issue disagreeing politely with the President but disagreeing. That led to a fairly high profile moment of tension between the SACP and ANC which we succeeded in resolving. Currently we battle quite hard to get into the mainline media and I think that whereas before we were getting into the media but under the label of notoriety now we issue statements or are involved in major conferences and so on and we tend not to get noticed, so I don't think it necessarily marks a major decline in party activism or influence for that matter in many places but I think that it has a little bit to do with who controls media.
But I suppose a third factor is that we had, again, and that was quite well profiled, we had a major congress, sort of triennial party congress in April this year and that got good coverage but the main resolutions that emerged from that congress were in regard to party tasks, were reconsolidation of the party, rebuilding, development of a party cadre, political education and so forth, so that's also where our attentions are quite considerably focused at the moment as a party apparatus. It's around trying to consolidate a membership that grew rather too rapidly for our capacities in the previous years, around a strategic vision, that would lead to the second half of your question, around a strategic vision which I think has become a lot more unified and clear so maybe I should talk about that then.
POM Strategic vision is ...?
JC Right. Well I think we've been a party in the first four years or so of the negotiations process that has been a party involved in heavy internal debates. We've made no secret of the debates, we've seen one of our major roles in this negotiations period as being to open up ideological debate and being an organisation that's more ideological than the ANC. A lot of that debate centred around leading SACP personalities. I think that the April congress marked a turning point in that respect. We still want to debate and we still want to open up differences, explore confusions and uncertainties, but I think that we emerged in April as a party that is a great deal more unified around its perspectives [which are fundamentally ...] One of the key slogans of the congress was 'Socialism is the future, build it now', and it's the 'build it now' that I think marks an important strategic and ideological shift within the party. Previously we had thought of socialism as some task to be carried out in a second stage, some second moment, and we were more or less just holding our breath. In the first moment we were committed more or less to a national democratic struggle but our longer term agenda was socialism and we thought of it as a second stage. I think that what got redefined in April was a position that had been emerging over the last several years but got to be accepted collectively with more understanding is that we need to think of socialism as not something that gets built behind a block or a wall or in some second moment or in another space or time. One has to conduct oneself as a socialist in the present struggling to introduce momentum towards capacity for and even elements of socialism. That's how the wording of our new strategy document puts it. And I think that goes to the domestic situation but also the international situation. There is no second block behind which one can shelter and within which one might hope to consolidate a national democratic revolution and maybe also some kind of socialism and therefore one has either to abandon for any foreseeable future the notion of socialism or one has to rethink quite radically how one plans to do socialism. So our conception of socialism is now much more a process of radical transformation, of radical reforms where elements of socialism start to be implemented even in the present.
POM For example?
JC The issues that we've underlined are - we see this as wholly within the context of the Reconstruction and Development Programme and the tasks of the present so, again, it's an integration of a socialist morality, perspectives, outlook and programme into the present rather than holding it off as some kind of distant ideal. So we think it is socialist forces that are most able to defend the heart and soul of the RDP. What has happened since April last year, since the national elections last year, is that a whole range of forces which were opposed absolutely to the RDP are now talking RDP language, but stretching it in a whole variety of directions, basically into neo-liberal models. The current local government election manifesto of the National Party ironically is an RDP manifesto. They are saying, "We believe in the RDP, we are the only ones that can implement it, the ANC has proved in 18 months incapable of implementing it."
Now it's good that we've drawn our strategic opponents on to the terrain of the RDP, that's a victory and that goes back to the April election result, but of course they are on this terrain with their own agenda and therefore part of a major socialist task is to defend the integrity of the RDP with which we fought the elections in April, the key point being that prime within the RDP is the priority of social needs. RDP, the base document, as it's called, says that it stands or falls over five years, ten years, fifteen years in terms of whether it's able to begin to make an impact on the desperate social needs that we confront in our country, housing, unemployment, electricity, water, health care, education, that bundle of basic social needs. Now what's tending to happen from outside of the ANC, but even percolating into it, is a different conception of the RDP which is that there should be growth first and then afterwards, as a sort of afterthought, we can come back to a trickle down concern for social needs. That's the National Party agenda, yes OK we agree with RDP but how do you get the RDP? Well you get to the RDP through having a major growth at any cost, market led, export led, export driven growth.
POM Is the ANC moving in that direction too?
JC I think one sees confusions in the ANC in many areas including in regard to the RDP and therefore there is a real struggle in our country, but also inside the ANC around the integrity of the RDP. So that would be a socialist task, one in which we would join hands with a range of other forces who are not necessarily socialist but who also are serious about trying to do something about meeting social needs and who are critical of neo-liberal models, so it isn't just socialists who share that kind of criticism.
Then to unpack that a little bit further, part of that defence of social needs means rolling back the market. We've heard all about socialist totalitarianism but there's another kind of totalitarianism and that's the sort of empire, the evil empire of the market, the tendency to transform everything into a market reality. I think that socialists, or non-socialists but socialists in particular, are well placed to say that not everything should be on the market and we are not simply buyers and sellers in the market either. We are congregations, communities, trade unions, political parties, any number of things, patients, students, parents, we're not just buyers and sellers. Things like water, health care, education may have to be paid for but their price, their value shouldn't be determined by narrow market mechanisms. One has got to fight against that.
So that would be part of also trying to instil socialist values and perspectives into the present not holding them off for some distant future and the proof of the necessity of doing this would be the Masakhane Campaign, that was supposed to be the lead, people-driven RDP campaign. Now if you look at that campaign, the word 'masakhane' in Nguni languages means 'let us build together'. What it has come to mean is 'the people shall pay', the government shall deliver electricity, water, houses, the people shall pay. I think that paying for services is indeed part of overcoming a colonised victim mentality, people should feel a responsibility for services. Where they are able they should contribute to the payment of those services, not a market price necessarily, and they are entitled to decent health care whether they can afford it or not. The proof of the way in which neo-liberal or market mentality can get a grip on one's own thinking is our own Masakhane Campaign where 'let us build together' has lost something in translation and it has become 'the people shall pay'. So those would be some examples.
The debate around privatisation would be another good example where we've intervened, not in a high profile public way but I think we've actually begun to win the debate. It's never finally won but the position that has now recently in the last month been piloted through Cabinet by the Minister of Public Enterprises, Stella Sigcau, coincides with the position that the SACP and also COSATU has been pushing but it isn't where the minister began. Twelve months ago she was talking a great deal about the Malaysian path, meaning not the old Malaysian path where there was a great deal of nationalisation in the second half of the sixties and seventies, but of radical privatisation, handing out slices of the economy to an emerging black elite and calling that liberation and transformation or whatever. We intervened quite robustly, a little bit publicly but mainly inside of our alliance, to say that we weren't dogmatically opposed to privatisation but it needed to be done strategically and it needed to be subordinated to the broader RDP effort and our principle arguments were (i) the leading public utilities like Escom, Telkom, Transnet, were absolutely essential for the RDP, that they needed to remain within public hands. They need massive transformation no doubt. They are utilities we have inherited from the apartheid past, but they were huge assets in terms of trying to put in rural and urban infrastructure and to slice them up into digestible slices for the private sector was going to actually take the steerage out of the RDP.
We've won that argument for the moment, on paper, so the policy guidelines approved by Cabinet is to retain those key public utilities in public hands. In regard to them we don't rule out, and the Cabinet hasn't, we agree with that perspective, that in certain cases we need to look a joint ventures particularly with major international multi-nationals that could bring in technology and capital. Telkom is the obvious example. In telecommunications there is very rapidly, as we all know, changing technology and Telkom on its own will just be dead in the water within years unless it's able to negotiate an effective joint venture with some major, probably US, telecommunications multi-national. But there too the guidelines are that the majority share would remain, the public share, within Telkom's hands and there would be a strict regulatory framework within which the joint venture would operate.
But in regard to other areas, there are whole stretches, for instance, of land purchased by the old South African Defence Force for training and missile ranges and so forth. We think that that should be sold off preferably to land hungry black people. There are other white elephants that we've inherited from the apartheid past like Mossgas which is an off-shore gas pumping station which was built in the context of oil sanctions against South Africa. That no longer makes much sense and it is not profitable. If some stupid private sector enterprise wishes to buy it we should look favourably at their interest. So it's not a dogmatic opposition to privatisation but a strategic approach to it.
POM Let me just go back a bit and then come back to the economics because I have a number of very specific questions of the economic agenda. During the nurses strike and the municipal workers strike and other strikes in the public sector, it appeared to me that the SACP was conspicuous by its silence of where it stood in relationship to these strikes. Where did it stand and why did it not make its voice more effectively heard?
JC Our principle concern was ANC alliance unity. I think certainly since August/September that has been perhaps the most important priority for us as a party, is not to get squeezed out and marginalised far on the left, but to remain in the centre of things and in a way the kind of strategic reorientation that I spoke about in regard to our congress also points us in that direction. In other words not to be a kind of marginal left force, far left, but peripheral, but to try to exert an influence, a strategic influence inside the heart of the ANC but to do that not in some kind of caucusing and behind the scenes way but to emphasise unity also all the time. I think that the public sector strikes, nurses and municipal workers, have posed a particular threat to ANC unity, movement unity. Certainly the municipal workers are SAMWU members and therefore members of a COSATU affiliate and therefore members of our tri-partite alliance. We were around, we went out to the picket lines, we spoke quite a lot to municipal workers and also to comrades in government, many of whom are party members who found themselves in the unaccustomed position of being employers in this particular situation. I think generally, our strategic appraisal of those strikes were that they were warning signs, impatience at the slowness of transformation in the public sector. In the case of the nurses it was a cry of desperation that the strains on public health are enormous and they are carrying that in the front line of the strains.
So within the ANC we spent a lot of effort, expended a lot of effort encouraging the ANC not to take a hard line on the nurses. We succeeded at the national level, I think we failed a little bit somewhat at a provincial level. I am personally unhappy when there are ANC statements saying that nurses are being manipulated by a small cabal of Inkatha members, DP members or ultra-left members or whatever. There are those forces at play in these strikes but that's very misguided. It's to belittle the intelligence of nurses for instance or municipal workers. It's to underrate the huge crisis that is operating in the public sector generally and it's a confession of weakness to blame strikes on minuscule other forces who are suddenly able to organise nurses on a grand scale.
What we're doing is trying to encourage the sides to talk and for there to be a clear strategic perspective which in the health sector, I'm pleased to say, there is, partly as a result of the strikes, but in any case in the pipeline before them there is now quite a comprehensive package trying to look at the major concerns of nurses. One of the outrages is that there are dozens and dozens of different pay scales within the broad public sector and specifically also amongst nurses, so depending whether they work for a local authority or a provincial authority there are vast differences and that's been part of their legitimate grievance. All of that is in the process of being sorted out and the change will be implemented in about April next year. Budgetary and other problems make it difficult to immediately change it but it's coming so one is pleased to report that.
POM The ANC in Gauteng talked about a hidden hand behind the strikes, and called for a meeting with COSATU, the suggestion being that there were elements within one organisation or the other that wanted to undermine the ANC's performance in the local elections. That was not particularly helpful.
JC No it wasn't and we were critical of that particular stand, again not publicly critical. In the first place the strike here in Gauteng was precipitated by an ANC blunder in government where they agreed to some changes in the metropolitan laws affecting local authorities which had the effect of decentralising a great deal of decision making including negotiations with the work force and municipal workers were quite right in being outraged at that agreement which would mean that they would have had to negotiate in dozens and dozens and dozens of workplaces rather than enter into much more central bargaining which generally, when workers are relatively well organised, central bargaining obviously helps them in principle. That was a blunder. It was an oversight rather than some deliberate plan from the ANC and the ANC then in Gauteng made the error of saying, "Well we'll change it but after the elections, we don't want to look as though we made a blunder before the elections". Municipal workers didn't buy that argument.
I think sometimes the ANC does conduct itself in rather narrowly electoralist ways and I hope they've learnt the lesson this time here in Gauteng that to try and put things off because of election campaigns actually messes up your election campaign, it doesn't actually help it. So I think that's a lesson they need to learn. There are numerous problems around and there will be creative tensions within the alliance. Those are not necessarily bad but the question is one must seek to make them creative rather than simply self-destructive. Part of the big broader, strategic challenge at the moment is to turn what are transformation energies, the nurses' strike, the municipal workers' strike, those are essentially transformational energies, reconstruction energies flowing in the streets but they are often getting turned inwards so the Minister of Housing carries the can because there are not enough houses being built.
The Minister of Health carries the can for the crisis in the public health sector and the transformation energies both from within government and from the workers are not being turned outwards enough to ask questions around the other big strike that is happening in our country at the moment, namely the investment strike in housing, the private sector, the banks, the building societies are not putting money into it as they had agreed to last year, putting money into building houses at the lower end of the market. They are saying we are not satisfied, the risks are still high and so forth. The public sector health is in a terrible situation but that's an inherited situation, one. Two, it's the consequence also of a massive private health sector which is very parasitic on the public health sector in terms of getting trained personnel, doctors, nurses and so forth who are trained in the public health sector and then go on to more lucrative jobs in the private sector.
So a lot of the anger gets turned inwards rather than outwards into real transformation and we find ourselves a little bit in the position that we sometimes did in the 1980s where we had revolutionary energies flowing but they often got sealed off into townships and then the regime, the apartheid regime lost control of the townships but it sealed them off and them put into those townships hit squads and third force elements and askaris and so forth and tried to turn the energies inwards again into self-defence and quarrels between AZAPO and UDF and whatever, and we find ourselves now in another ghetto which is the stage. Like any ghetto it's bursting at the seams, there are too many people in it and it's in a huge structural crisis and more and more people are coming into it as well, and we'll talk about that maybe. And outside of it is a private sector media, a private sector economy which is folding its hands and letting the ANC carry the can. So when I say that we've got to build unity of a broad ANC movement, rebuild that unity, that's the kind of challenge I have in mind, to, as it were, lead the energies that are there and which are manifest in public sector strikes but in directions which are transforming rather than inwardly turned quarrels within our movement. It's not easy but that's a key challenge.
POM On the broader economic front, there are two ways of going about this, maybe the simplest way is to just read some statements from an article that was written by Jeffrey Sacks, liberal guru of free markets, recently in which he put forth four simple points for economic growth. He said, "As a first step industry and agriculture must forego decades of protectionism by slashing tariffs and other hidden barriers to trade still in place. An internationally competitive export industry has to be able to import the inputs and machinery that it needs at world prices and not at the inflated prices of the now protected domestic market." So, end of protectionism.
JC Let's hear the package.
POM The second is, "That the trade unions should accept the urgency of wage restraint. The small proportion of black unionised workers who found a niche in the formal economy earn two or three times the wages of under-employed black workers struggling in the informal economy. A unionised, unskilled, black factory worker earns $400-00 a month well above the global competitors in Poland, Malaysia and Brazil and vastly above his unemployed counterparts in the townships."
Third, "Wage restraint should be expected of the unions only as part of a larger social and political strategy in which black households can look forward to a future in which they are increasingly owners in the new South Africa. Various financial arrangements such as voucher, privatisation, pension fund reform, profit sharing plans, employee stock actions and other techniques can be deployed to ensure that blacks have more ownership in the economy."
That's the three most important. The constant message I hear coming across, now I address the second one, is the need for, if South Africa is to become internationally competitive, that is if it is to start creating jobs as distinct even from economic growth, and the two are not necessarily correlated, that its per unit costs are too high by any international standards, that the rate of increase of wages lags behind the rate of increase in productivity and unless you have wage restraint you are not going to create jobs.
JC Right, let's start with that, the wage restraint argument. We are certainly not going to pursue a low wage export, well we certainly don't want to, and certainly as the SACP we are going to argue, and have argued firmly, against a low wage export oriented approach. That takes me back to the first point that what we are talking about is fundamentally, at the core of the RDP, an urban and rural infrastructural development inside of our country and regionally because there is also no sustainable RDP that is also not a southern African regional infrastructural development programme. That's at the core of it. It's not an export led process, it's an inward industrialisation process if you like. Of course we have to export because we have to import, as Sacks is saying, and we do need to become more effective on international markets. Part of our problem is that we have a typical third world economy. When it comes to exports we are massively reliant on unprocessed exporting and so we need to look at greater beneficiation within the country of our mineral products and of a range of other things and that too would be part of infrastructural development and job creation. We also need to look for niche markets. We are not going to compete with the low wage payers in the world, we don't want to, and given the strongly unionised character of South Africa and it's a union movement with effective organisational experience going back many decades, even if we thought we could get away with it, even if we thought it was desirable to squash unions and to repress wages, it's not going to happen so we need to look for niche export markets as well and that is another possibility.
We think already there is some small experience that we are beginning to develop, rely on the relative advantages that we've got in South Africa because on the one hand we have this huge third world problem but on the other hand we have a relatively developed, although it's true not very productive often industrial sector, financial sector and so forth, and already we are seeing some adaptation, for instance, of telecommunications, technology for the particular third world applications that we have got here in South Africa for the RDP, priorities that we've got which then begin to find large markets in places like India or China, People's Republic of China. So we think it's less in trying to produce microchips cheaper than they can in Malaysia or South Korea or Vietnam now. We will never succeed in outbidding the low wage economies and each year brings a lower wage economy onto the international market so that Malaysia or Indonesia is now being undercut by Vietnam which will be undercut by the next one in the line. We've got to look to a different growth path and to a different export path and to a different overall economic strategy.
But then some further points about wage restraint. First of all it's true if you compare South African workers with Malaysian workers who are often female, under 18 and work 18 hours a day, the productivity of semi-skilled workers and unskilled workers in South Africa doesn't compare. We are pleased that it doesn't. But a great deal of unproductivity, and productivity we need to look at in South Africa, that is a huge problem. That's a legacy of many things. Probably the most unproductive stratum in production in our country is management and it's not the Communist Party alone that says that, a number of Japanese academics recently, a month ago, were around and they were saying that what most appalled them was the incredibly low productivity of management, high salaries and incredibly low productivity. That's part of the structural heritage that we have from a racialised economy where managerial posts were for a white elite that played golf on Thursdays and whose managerial expertise consisted in giving orders, barking orders occasionally, to unskilled workers without too many political rights. Which is not to say that the lower end of the work force is productive, it's not very productive and, again, the reasons for that lack of productivity are largely apartheid reasons. Very low skills, poor education, low levels of literacy, lack of motivation to work, which I suppose would bring one to Sacks' third point which is a greater stake in the economy. We agree with that but we think the path that he is suggesting is also mythical and not likely to work. Experiments with, for instance, handing out employee share, little slices of companies in order to create a sense of participation, what characteristically happens, it's happened in Russia, it's happened in Britain, is all those hundreds of little shareholders sell out quite quickly, cash in their shares and sell out so it isn't a route towards people's capitalism as Margaret Thatcher liked to claim.
But we do need indeed to look at ways in which one increases the participation and involvement of people and that's an important route within the economy, that's an important route to developing participation, lifting productivity and so forth. I think there are some imaginative things that are starting to be pursued in South Africa. One would be the workplace forums which are now part of the new Labour Relations Act. The Act has been passed through parliament, it has still to be signed as it were by the president, but in the course of early next year it will become an up and running Act and that envisages workplace forums for all workplaces with over or 100 employees and that will greatly enhance the level of participation of workers in the strategic side of factories, for instance. It obliges businesses to discuss with workers their strategic plans, product development, competitors in the market, what they need to do about them, how they need - and so forth.
It would be much more in those directions that we would, I think, explore the ways in which one engages people. I don't necessarily disagree with some of the other things. We do want to make more and more people homeowners in South Africa, that is part of our plan, and find other ways in which people have a stake in the new South Africa indeed without necessarily accepting the full package that Sacks is talking about. As for tariff barriers, yes, again we need to look at what we've got there. There was a kind of white protectionist economy that was run in South Africa by decades of white minority rule. That means, for instance, that food products are tremendously high priced often. We are subsidising inefficient white farmers. There are huge monopolies operating in our country which greatly affect prices. Inflation is often blamed again on workers' wages, but we think that the major contribution to inflation, which is more or less under control, it's running at 10%, but we would like to see it come down lower. The principle contributor over the last ten years has been food prices not wages and that has had a great deal to do with the protectionism and bureaucratic maze that surrounds the agricultural industry where basically unproductive, ineffective, large white farms are kept afloat with endless handouts from the Land Bank and similar institutions. We agree that we need to look at the protectionist barriers and need to bring them down and in any case GATT and our commitments to GATT compel us to do so. The sole priority would not necessarily be simply to make us more competitive on international markets. We need to do it in an intelligent way. There are plenty of examples of trade liberalisation in Africa where what happens is that you simply wipe out your agricultural sector, you make Coca-Cola, imported Coca-Cola or US rice, Uncle Ben's rice or whatever, cheaper on your local market than it was before but you wipe out your own productive base whether in agriculture or manufacturing. At the end of the day you have cheap international products but millions of people unemployed, off the land and so on. So we need to do it in strategic ways. We don't have some dogmatic argument against bringing protectionism down, but we need to do so in ways that are informed by our strategic priorities which are, to repeat, the social needs argument of the RDP.
POM It seems to me in a way that the focus of the government's economic policy is the need to make South Africa more competitive and there have been a number of studies done over the last 18 months that show that by almost every international yardstick, almost every sector of the economy, that South Africa ranges either at the bottom or very close to the bottom and that it is not simply very competitive in any international sense. In the end you've got to become more competitive and you've got to become more competitive because the tariff barriers under agreements like GATT or arrangements with the World Bank or the IMF or whatever start coming down and you're going to face international competition. To me the logic of that is that you substitute capital for labour, that if your labour is a high cost factor you simply start using more capital rather than labour, number one, and number two I note that even though there has been a blimp in economic growth this year up to 3%, there has been no increase in employment at all, so that economic growth is occurring a little bit but it's not occurring in a way that's creating jobs and creating jobs is the most important economic problem that the country faces and that it is confusing economic growth with the task of dealing with joblessness.
JC That's right, I agree. I would slightly dispute that. When I said right near the beginning that I think that there are confusions, genuine confusions, within the ANC and therefore conflicting signals as to what priorities are, when you say that it seems to you that government's priority is to get more competitive and so forth, I am not surprised to hear you say that because one hears ANC ministers or ministers in the government of national unity saying these things, but I would dispute that that is a collective version of what the priorities are within the ANC government. I agree that it's a view and it's a view with some legitimacy. I think the question is not to get into ... and divisions to easily and too quickly, is it growth or is it development? We need to look at growth, we do. We need to export, we do. My argument would be to place the emphasis slightly differently from a kind of neo-liberal version of where they should be. I think there has been some growth and you're right to say that. Currently the growth rate is 3.2%. It's not enough. What it's doing is theoretically that level of growth rate is taking up new people coming on to the market but it's not remotely addressing the huge backlog of unemployment. It's mainly growth in its existing capacity, tooling up basically. That's where we're seeing the growth. There has been a very rapid increase in the private sector in fixed investment, in capital investment, very rapid in the last 18 months. Immediately after elections there is a very steep climb but a lot of that again, as Jeffrey Sacks has correctly observed, is buying of technology, plant and so on from outside which has put our balance of payments situation slightly under strain. That's alleviated by the high interest rate that we've got running. We've got a high interest rate of 17% with the inflation at 10%, so the real interest rate is 7%. So there is quite a lot of short term foreign investment, mainly portfolio investment coming into the country. That's helping us with the balance of payments problem for the moment but we note Mexico and we know that short term portfolio investment can go in half an hour, and the high short term interest rate affects many things in the developmental area, not least housing. We're not in some kind of debt trap of any serious kind, thank God, but there are constraints on what anyone can do in the situation and, again, we accept those. We need to manage them intelligently because some kind of populist approach to what should be done will just plunge us into a massive debt trap and we will be where most African countries are now, under the thumb of IMF and World Bank.
POM Just to finish up on that, in the euphoria following the elections and the inauguration of President Mandela, the foreign investment that was pledged hasn't materialised and some people say the country has been waiting for the foreign investment to come and it is simply beginning to dawn on people that it is not going to come in the amounts that they originally thought it would, number one. And number two, there may be a substantial waiting period until the end of this government. More people abroad say well it may be OK now but what about when Mandela goes? You've got the 'when Mandela goes' factor that is operating too. Without substantial foreign investment do you think the country can address the problem of unemployment?
JC I suppose the most intractable problem is unemployment. The G7 countries haven't solved it. They have given us a fine example of jobless growth over the last period, many of them. I don't imagine that there are easy solutions to unemployment but we certainly can begin to make progress in terms of reconstruction and development with the resources we've got within our country requires marshalling of them, struggling to redistribute them, and I think we have made some progress. I don't think we have simply stood still. In many sectors there are the beginnings of tangible change and transformation, not fast enough, not effective enough, but there are real possibilities. South Africa, after all, is not without resources.
I think I might have said in a previous interview that we have been spending more on education in South Africa than the entire GDP of Tanzania but there's a superior literacy rate in Tanzania than in South Africa. Obviously there's a smaller population but the point being with existing budgetary resources as strained as they are, with all the difficulties that we've got, we can make headway in terms of health or education. It requires doing things differently, even with the same size of cake it's possible to do that.
I would like to also peg some observations on to your thing about the heady expectation of large amounts of foreign investment coming in. I think this goes to a broader confusion that operates within the ANC first and foremost for a number of reasons. I think there is a lot of confusion as to where in the world we are as South Africa. One of the phrases that gets repeated over and over in our country is that now we have returned to the family of nations, and that begs at least three separate questions and the one is this notion of 'we', who is this univocal 'we' that has now returned? Were we ever absent from the world, as if the two major protagonists in the struggle over the last period were not already always aligned to the major forces in the world out there, and as if the isolation of the PW Botha regime was also our isolation and we've all collectively returned like some prodigal to the world. But the most disorienting of all illusions in this particular, now that we've returned to the family of nations, is the notion of some happy family of nations which gets fostered by the legitimacy global aura that surrounds Mandela for instance. He gets ticker tape from New York to Washington and every failing western politician from Clinton through John Major to Mitterand comes out here or seeks some of the Mandela shine hoping it will rub off on them, for entirely domestic and political reasons. It has very little to do with some deep desire to see the RDP up and running in South Africa. But that's reality and it's something of an asset which we sometimes don't understand properly. It gets to be deeply misunderstood and we think that to be ticker-taped is a guarantee that billions of dollars will flow in and they won't. We're part of a tough world where African countries have got a tough deal.
South Africa has got some few more options than the average African country but I think the sooner we remember the world imperialism, which has got a little bit forgotten, the struggle for a just world order, the sooner we start reminding ourselves of some of those things the better. That's not to say that we can then lead some anti-imperialist crusade easily. It's a tough world. But I think we will become a little bit more realistic about our position in the world, what's possible and what isn't and what we have to fight for, but folding our arms and thinking that Mandela's being the flavour of the month is going to produce real hard-nose investment is an illusion.
POM One last question. There's one big resource in this country that seems to me to be untapped and unused and that is the SANDF. You have soldiers sitting in their barracks being paid. There's no war on. They do war game exercises. You've got medical expertise, you've got engineers, you've got all kinds of technological experience that could be put to civilian use and the army could almost be converted into an internal corps that could do all kinds of tasks and yet you have Ronnie Kasrils fighting for four more Corvettes for the defence forces which would cost more than the entire budget allocation for the RDP for last year. Why is there no movement to take this resource and to use it in productive ways where it could do an awful lot of good?
JC I think there are moves in that direction. I think there are some qualifications that one needs to look at. Already the army has been deployed into health crisis situations, partly when the nurses were on strike, but also there was a cholera epidemic last year in the Northern Transvaal. So there is the awareness that there is a resource there which we need to use. We have also used it for solidarity actions in Rwanda, the Air Force and so forth. There is some reluctance because there were attempts to use the army like that in the eighties in hearts and minds operations going into townships, handing out sweets, playing football and winning over hearts and minds for a whole different number. So I think a certain caution is in order. We need to transform the army in order to make it capable of being the kind of force that you have in mind but I don't deny that one needs to think dialectically, as I would say, on the matter, that part of transforming it would be to deploy it in that kind of way. We are moving in that direction and I think we will see that happening a bit more and more.
I think my friend Ronnie Kasrils is sometimes a little bit unfairly criticised. The army is a delicate reality, it's essentially the old army that we've got. We've got a few people sitting like epaulettes on the top but the body of it is the old body. The inclinations, culture and so on are the old inclinations, the old culture, and I think that people like Kasrils and Modise, whatever shortcomings there might have been, have done well to work with that army and bring it more and more in a constitutional direction. If we worked at it we could turn some of our generals into Pinochets quite easily, so I think that the espousing four Corvettes and so on is part of our guys saying, we take the professionalism of the army and navy seriously, we don't want to run down their skills and so forth but we want those skills to be part of a changing South Africa. That's perhaps a little bit more of a delicate operation than they are sometimes given credit for.
POM OK. Thanks.