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 It is the product of almost two decades of research and includes analyses, chronologies, historical documents, and interviews from the apartheid and post-apartheid eras.
06 Dec 1996: Mboweni, Tito
POM Minister, let me start with this kind of question, if you were abroad and I was a foreign diplomat or a foreign dignitary or whatever and you had come to visit me and I said, Minister I'm slightly confused what's going on in your country. First of all you seemingly discard one of the brightest in your party, Cyril Ramaphosa who is 'redeployed' to the private sector, you then expel under not very nice circumstances one of the leading members of your National Executive, at least in terms of vote-getting capacity, General Bantu Holomisa, who appeared to us in the outside world to be expelled because he was trying to expose corruption and made allegations of corruption. I don't want to concentrate on him. Then you fire the Premier of the Free State, one of the highly regarded people in your party, Patrick Lekota and his entire Cabinet. You more or less impose, or it seems again to us on the outside, Dr Ivy Matsepe-Casaburri as the Premier. You have had Jacob Zuma, the National Chairman of your party, who made this most extraordinary statement in Durban a couple of weeks ago when he said that anybody in the ANC who thought that the constitution was more important than the ANC was in big trouble. You had Peter Mokaba drafted by elements in the Northern Province to run for the leadership there and then a directive from the top said his work load was too heavy and then the intervention of the Youth League and suddenly he's available. Then you had just last weekend Minister Valli Moosa going to the Congress in KwaZulu/Natal with a directive that the two people who were candidates for secretary were to stand down, that a third candidate had been decided upon. All of this strikes us as being done behind closed doors, it seems to be done in an autocratic and rather authoritarian way and the ANC has always said it was the party of transparency and accountability and openness and that this seems the very opposite of openness and transparency. Added to that we know there are tensions within the alliance on questions relating to the macro-economic policy, yet these differences are never openly debated as to who stands where in the NEC. Decisions are announced but what the terms and what the direction of the debate was, we don't know what it was, we never know what it is so we're a bit confused between what you say you want in government and how you behave as a party.
TM Since we are dealing with a hypothetical situation I think that my own understanding of the situation at least is that there are new material conditions prevailing which confront the ANC. The ANC had never been in power before. The ANC had been a liberation movement. It's approach on many political and administrative issues was very much centralised. The Lusaka headquarters of the organisation was a command centre for the whole organisation and indeed most of us would consider ourselves as cadres of the organisation, being part of this movement because we wanted to achieve the objectives which other people as well in the organisation wanted to achieve, freedom and democracy for ourselves, the development of our people, the fight against poverty, social justice and so on. As cadres of the organisation we would be deployed by the leadership from time to time in different places. Other comrades were deployed as chief representatives of the ANC in the different parts of the world and there was never an election whether you were going to be a chief representative. It's like now there is no election when you're going to be an ambassador. Yet others were deployed as commanders of uMkhonto weSizwe in the front areas and also inside the country, so we were a far more organised army with a command centre, with local command centres and a flow of information and the organisation was tightly knit and tightly put together. Now the objective, as I said, was to fight for freedom and democracy. We were experts at bringing down governments, we were never experts at governing. We had never had to govern before and as such it therefore becomes inevitable that we have to go for a process of change and transformation from a movement that was primarily preoccupied with a notion of bringing down a government to one which must start governing. So I am saying the material conditions have now changed. We are now into a phase where we have to begin the process of acclimatising this organisation to governance but at the same time to understand the difference between government, the political organisation and yet what kind of factors govern the relationship between the two in a situation where you have extremely centralised political opposition.
I don't know how many people know anything about any debates in the South African Democratic Party or in the National Party or the Freedom Front or the Inkatha Freedom Party for that matter so we have an extremely centralised and almost secretive opposition and yet we are expected to debate our dirty linen in public against such opposition. So I am saying the material conditions of government, of dealing with this secretive opposition, also dealing with many forces which are still part and parcel of the counter-revolution which are still spread throughout the society. It would be folly on the part of the ANC to think this is the United States or England. The dangers facing the democracy are still real and the manner in which the ANC operates as well must bear in mind the requirement indeed of open democracy and transparency and also to maintain its house in order, a very tightly knit house in order. It has to be tightly knit. You can't have a situation where there is almost like looseness where everybody in the name of transparency rushes off to the press and all of that. All that does is it exposes the ANC vis-à-vis other parties and the opposition. So the ANC has to be better organised.
POM Just to clarify on that. You think that if you had this kind of openness that it would be used by your opposition to exploit you and to take advantage of you and to point out divisions and to hammer away, that it's a way of undermining you?
TM No. I am saying that failure to understand that any notion of democratic extremism is actually itself a danger not just to the organisation but a danger to the democratic processes that we have achieved so far. Remember it's only about two years and we have been facing people who for well over 300 years have been entrenched, including the fourth estate, the business community. If I could tell you that most of the senior intelligence officers who used to be in the apartheid government some of them are now joining the private sector companies, running so-called security departments in those companies, the privatisation of the intelligence agencies, and we are expected to just have an open conference where everything is discussed in front of the media, which media incidentally is still predominantly almost the same. So we have to be very careful about not pushing the organisation to adopt principles of democratic extremists.
Now the second point is that the relationship between organisation and the government wasn't fully understood by many of the actors that you made reference to. For example, if you are a Premier of a province what is the relationship between yourself as Premier and the political party that put you there? Do you as Premier proceed on the basis that you are the Premier, you have got powers to exercise in terms of the constitution or do you ensure that you are there in that office to implement the policies of the party that put you there? So you can't always argue constitution, you must always argue implementation of party policy, of course within the legal constitutional framework. The constitution gives you the framework of what you can do, what you can't do, but in the implementation of party policy - now what Jacob Zuma is making reference to is that nobody should then think that they derive their power from the constitution and not from the political party because you derive your power from the political party but you must work within the confines and guidelines of the constitution. There are others who when the party began to say to them, but this is not party policy why don't you consult the party? They say, no, no, I've got the constitutional powers to do that. That's where the problems lay.
The third point is that what all of these cadres with the organisation going high profile and so on, you should separate the question of the Premier of the Free State from that of Cyril Ramaphosa. Cyril Ramaphosa was not told by the organisation to resign, he was not under any investigation, he didn't have any major differences with the party so he didn't go, as it were, as a result of clashes with the party, with the leadership, with the National Executive Committee, with the National Working Committee. If you look at the Free State situation these have been decisions of the National Executive Committee which said that these folks have failed for over two years to resolve the differences between them and primarily those differences tended to centre on the relationship between the political organisation in power and the government and with some people there saying they derive their powers from the constitution and others saying, no you can't derive your powers from the constitution, you derive your powers from the political party. But both sides being unable to see the linkages which were there.
The question of the Northern Province and KwaZulu/Natal, it's a matter that any political organisation, any business organisation has a right to determine the positions which its cadres are going to hold. If you don't do that you run the risk of your organisation being taken by forces that you don't know and that's very dangerous so you must continue to safeguard your organisation. You must do so in a manner, of course, that continues to engage the ordinary membership, you must talk to the membership, you must engage them. Some of the membership of the ANC is fairly new and young. It still needs to be developed in ANC traditions. I have been to a meeting in the Free State, for example, where just to test that membership there, just test it. When was the women's march to Pretoria against passes? A number of them didn't know. I didn't ask when the ANC was formed, I may have been given a different answer, but I didn't ask that. Now I am saying faced with that kind of situation you must be very careful that you don't therefore allow your organisation to go haywire, determined just by mass hysteria and populism from wherever it comes. It must be a well oiled, tightly organised entity otherwise you run the risk of your organisation being undermined. Let me indicate to you that from what I have picked up the National Party strategy now is no longer just to vigorously oppose the ANC in public, it's a strategy of infiltration which they have tried for many years to do in the ANC.
POM I want to take that as a separate subject. I would like to go back to two points. One is that you're saying that primary allegiance is to the party. Now many people think that as a result of the primary allegiance being to the party that the way to get along in the party is to please the leadership of the party rather than to speak your mind. Many people regarding the Free State, both people in the ANC and outside of it to whom I have talked, saw Lekota as being somebody who was attempting to expose corruption and impose accountability to the people, the people of the Free State, the people of which he was Premier of, that his primary obligation was to the people of the Free State and not to the party.
TM You see if he doesn't see himself as having obligations to the party then he's a free-floating agent. You see he didn't stand as some Ross Perot who goes just as an independent. The party systematically chose him to put in there. If I could indicate to you Terror Lekota, for example, in the nominations conference of the ANC he was number 35 and number 35 can never be Premier. The organisation decided, the leadership decided together with the membership that, no, for the purposes for him to become Premier let's take him from 35 to number one. So it was not the people of the Free State that decided, it was the ANC. Then of course the ANC, not the individual, the ANC is then accountable to the people of the Free State. Now if cadres must at all times behave in such a manner as to facilitate and improve this accountability to the people of the Free State, so it's not an individual who's accountable, it's the organisation. People don't vote individuals, they are going to decide on the organisation.
Now I will have a lot to say about this corruption thing next time you talk to me because the office of the Auditor-General would have published its report, so I don't want to pre-judge it. But next time, you could remember this, you should ask me. One of the things that people in the ANC are now doing, they have picked up from the fourth estate popular catch phrases like 'anti-corruption', it's good, it's ANC policy to fight against corruption, but sometimes they use it as mud that they throw at their competitors within the organisation to destroy other people by throwing mud at them without proof. I await the report to be able to have a proper discussion.
Terror Lekota is an extremely talented ANC cadre, has the potential to make major contributions to the organisation and I think out of this experience certain lessons will be drawn by him and other Premiers and indeed by ministers and Presidents and Deputy Presidents, that nobody is above the organisation.
POM That leads me to the obvious question and that is, who rules the country? Is it the National Executive of the ANC? Is it the Cabinet and the executive? At provincial level is it the provincial Premiers implementing policies of the organisation yet having the freedom to behave as individuals with the right to hire and fire their own Cabinet? Where are the real decisions made?
TM Let me start with this hiring and firing business. If you are a Premier of a province and you think that you can just hire and fire as if you are a dictatorial Chief Executive of a company, who in any case has to abide by the Labour Relations Act, you are making a big mistake because in politics you are dealing with political situations and political considerations not mathematical formulae and those political situations demand that one takes into full cognisance the prevailing political situation, the balance of forces within the organisation, but if I do the following thing what will happen? Basic principle of consultation as well. You don't have to agree but at least consult people, say this comrade and that comrade is not performing in the government, I think that the best thing to do is to let this comrade go, to say that person has a lot of potential and therefore let's bring that person into the executive. So you don't just on the basis of your own decisions decide like an autocrat, I'm firing today, I'm hiring. The constitution gives you that power but to think that you just impose your powers on the basis of the constitution without taking into cognisance the political factors within your organisation is a big, big mistake.
Now, who governs? Is it the party or is it the Premiers and the Presidents? Well the answer to that question is, who put the Premier and the Executive Council, who put the President and the Cabinet ministers in their positions of power? The answer is very simple, it is the political organisation that did that. Who leads the political organisation? Well the political organisation is led by national conference which takes place once in three years. I hope we change that actually to become once in five years, it's much easier. The conference then elects the National Executive Committee which becomes the governing body of the political organisation in between conferences. NEC elects a small group of comrades, the National Working Committee, who must run the ANC in between the meetings of the NEC. The NEC meets once in three months, NWC meets once in two weeks and then in between the meetings of the NWC there are five core people in the organisation: the President, Deputy President, National Chairperson, Treasurer/General, Secretary/General, Deputy Secretary/General, are the final custodians of the organisation but their decisions, their proposals must be considered by the NWC and if they are of such a magnitude as to require a broader decision those decisions are taken to the NEC and once the NEC has made a decision the issue is about implementation. So those of us in government are answerable to the NEC. I can't just proceed because I'm Minister of Labour and do whatever I want because I'm governing. I didn't fall from heaven. I became Minister of Labour because I went into government on an ANC platform, was deployed by the President in that position, so I am answerable to the President, yes, of the Republic but fundamentally in terms of policy and politics I'm answerable to the NEC of the ANC.
POM Let me move for a second to the National Party. A year ago De Klerk unveiled this vision for a new National Party that would try to Africanise itself, that would be non-racial, that would target black votes and hope to attract significant numbers of black votes, to become an effective alternative opposition. Number one, do you think that he and people like Roelf Meyer are sincere in really trying to do that? Two, do you think it's delusional on their part to think they can attract large numbers of black voters? And three, do you see the National Party as an obstacle in the way of transformation, an irritating fly that must be brushed off now and again but has really nothing significant to contribute to the debate about transformation or the implementation of transformation?
TM No, I think the first point to make is that if you have democracy all political organisations are free to organise, free to operate, to determine their policies in the manner that they see best suited for themselves. I am sure the National Party is one such organisation amongst others so how they decide to play their role as opposition is their business. We as the ANC have to ensure that we continue to organise ourselves, marshal our forces in a manner that allows us to continue the process of democratisation of the country, of reconstruction and development.
POM How do you see them vis-à-vis that?
TM They, I am sure as an opposition, will find fault with what the ANC is doing. It's well and good for democracy. For our part it is to continue to ensure this tight organisation I talked about, ensuring that we marshal and deploy our forces in an organised sense fully aware of the difficulties which we face in our society. So whether they are sincere or not is irrelevant to me. I am not bothered at all. What I am bothered about is that as an opposition I will engage them at the political and policy level.
POM But do you respect them?
TM I don't have to, I don't have to respect them. They are an opposition in the country. They have constituted themselves as the political enemy of the ANC in the democratic sense, not to kill one another but in the democratic sense. And if they go for the jugular we go for the jugular as well. So I'm not particularly worried about them. They are an opposition, if they garner sufficient support to be able to become stronger it means that they may be articulating the interests of the majority of the people. If they fail it means they are failing to attract the majority of the people. I think they should be viewed as one amongst many parties.
POM But do you see it as being delusional that a party that was part of an oppression that lasted 300 years and of a particular oppression that lasted fifty years can turn around and in the space of five to ten years expect that it's going to attract a significant number of voters from the very section of the population they oppressed the most? Just you as a politician, do you not think that's delusional?
TM I think they have to determine that.
POM What do you think?
TM I don't want to be throwing labels at them. They are an organisation ...
POM But what do you think? What's your opinion of them?
TM My opinion is that they are an opposition party, that's how they have organised themselves. They have particular programmes and policies. If those programmes and policies are attractive to the majority of the people so be it. I wouldn't want to start labelling them this or that. The fact of the matter is that they are part and parcel of the political landscape.
POM Let me rephrase it slightly. Do you think their objective is realistic?
TM I don't know.
POM Come on. Of course you have an opinion.
TM No. Look they have organised themselves in a particular way. I am sure they have their own analysis and their own research that indicates to them that perhaps they have a chance. I don't know. Perhaps they have ways of knowing how they are going to emerge as the largest party in the 21st century. One still has yet to see that. But from our point of view as ANC it is to continue to better organise ourselves. Our objective is to ensure that we keep on being the dominant political movement in the country which is still based principally on those policies and programmes of reconstruction and development, of justice, that we remain a tightly organised formation able to marshal our forces. Whichever political party in this situation is able to challenge the ANC must do so on the basis of policy and programme. Anyway multi-partyism is good for democracy.
POM Do you think there's an effective multi-party system in South Africa in a situation where one party enjoys a position of pre-eminent dominance?
TM Oh yes. You have had such situations in many countries. In Mexico the role of the revolutionary party there, in Argentina at some point you've had dominant parties, in Spain and Portugal. In Germany you've got one party now ruling for quite a long time. England the same. So it happens. So I'm satisfied that even a small party like the SA Democratic Party is making a contribution in terms of vibrant and vigorous opposition that keeps the ANC on its toes. That's good because they try to play a role which may help us to curb any excesses on the part of a dominant political formation like the ANC if that were to come about. The Democratic Party, they generate certain ideas which perhaps we may never have thought about which we may need to interrogate them vis-à-vis our own political positions. So I think irrespective of how strong the dominant party is it's very good still to have multi-party. You must bear in mind as well that the ANC, for example, does not control all the provinces of the country. The ANC does not control two provinces, that's KwaZulu/Natal and the Western Cape so already you have the three major political parties actually sharing in governance in different ways.
POM Some people, or a lot of people say that if effective opposition emerges to the ANC and that is effective in terms of their being an opposition, that has a reasonable chance of becoming an alternative government, one, that it must be African driven and two, that it will probably have to emerge from within the ANC itself which brings us to the question of the alliance. There is at least on the part of the NP and others, there is a lot of wishful thinking or perhaps analytical thinking, that at some point the alliance is going fall apart and that this will provide the opportunity for new political alignments. Do you yourself think that in the short run, and by that I mean in the space of the next ten years, the alliance will hang together or move in different directions?
TM I think the alliance will hang together because of the intrinsic nature of the three organisations, black workers are members of the ANC in the majority of cases or at least see themselves as members of the ANC even if they can't produce a membership card. The largest number of ANC members are members of COSATU, the largest members of the ANC are members of COSATU. It's a very important point. The second largest membership of the ANC is the youth who are not workers, maybe students, maybe youth, unemployed, whatever.
POM Are these members of the ANCYL, the Youth League?
TM I am saying you will find that members of the ANC Youth League are maybe the fat category of membership but at the foundation of the ANC are the working people and then comes a sprinkling of your black intellectuals and middle class and one or two of the owning class, bourgeoisie. Fundamentally the ANC is a working class organisation, fundamentally. Now of course in character it is multi-class but the real people who are chairs and secretaries of most of the ANC structures you find that they are members of COSATU, they are workers or here and there the intelligentsia, teachers and so on. Teachers are also part of the working class. So I am saying if you look at the intrinsic and inter-connectedness nature of the membership and if you take Sam Shilowa, Sam Shilowa is a member of the ANC, you would cut him up because he's a member of COSATU but he's also a member of the ANC. So the inter-connectedness is quite deep.
What will happen is that those members in COSATU who are members of the ANC have to also perform functions which are independent from the ANC because they have a larger constituency some of which is not membership of the ANC. So what you're going to see is that at particular intervals in the development process there will be tensions between ANC and COSATU the Communist Party like there are tensions between the ANC as a political organisation and those of our people that have been deployed in government. These are natural tensions. Actually they must be encouraged because they seek as well to demonstrate for example that the trade union movement is independent of the ANC. There's nothing wrong with that but in their independence there is also an inter-dependence and I think therein lies the challenge really of transformation. My view is that the alliance will hold for a while. You are going to see hiccups from time to time, differences sometimes over economic policy, differences from time to time over the way in which the ANC feels perhaps COSATU is articulating or behaving. COSATU will feel the ANC is behaving in a particular way. You will see that. We will sit down and say how then do we manage all of these processes?
POM Let's take the question of macro-economic policy. When the macro-economic policy was first introduced by the Deputy President it was laid down as being government policy and non-debatable.
TM No, it was introduced by the Minister of Finance, not the Deputy President.
POM But it was laid down as being this is policy.
TM By the Minister of Finance not the Deputy President.
POM Let's blame Trevor.
TM No, no, just factual history is that the macro-economic strategy was introduced by the Minister of Finance in parliament so the notion that this is introduced by Thabo Mbeki is not correct. I am not saying that because it was introduced by Trevor that it's wrong. I'm not saying that. I'm just putting the factual, the historic factual situation.
POM My point is that it was introduced as being government policy and non-debatable. It's been a plan that has been widely praised in the private sector, it's private investment driven.
TM No it's not.
POM Let me go on and then correct me as I go on.
TM Let me indicate. In the macro-economic strategy the projections are that private sector investment grows to about 7% by the year 2000. That parastatal investment grows by about 7.5% on average over the period and government investment, capital investment grows to about 7.4%. So actually if you combine parastatal growth and direct government growth that takes you to well over 14% and private sector investment growth is 7%. So it's incorrect to say it's just private sector driven. It recognises the role of the private sector, no doubt about it. In this 3,9 billion rand project to upgrade the Maputo corridor it recognises the role of the private sector, no doubt about it, but you see that private sector is investing but in the main as in getting contracts from the state. That becomes actual government investment that 3.9 billion rand. So that's one of the common myths and straw persons being created about the macro-economic strategy.
POM The one about deficit reduction on cutting the deficit to 4% of GDP.
TM That's correct, yes.
POM This can only be done not merely through a cut in personnel but also through a cut in programmes, but it's a programme that has the imprimatur of the World Bank and Sam Shilowa for one has a lot of problems, at least if one has to read his statements, with this programme and in a way last weekend they brought out their own document which in many respects is in direct opposition to many of the approaches the macro-economic plan would take.
TM I just want to do a drawing to explain myself. What was its main characteristic? Huge bureaucracy? A huge part of the budget went into paying salaries and pensions, not into social development.
POM Something like 48%.
TM It didn't go into social development. A huge military budget and this bureaucracy, primarily Afrikaner voters for the National Party. That's point number one. Point number two, capability. Most of the funds which were budgeted for when they were spent were being rolled from here to here and yet the deficit - remember you borrow this money from the market, why borrow and then roll over and not spend and have a left-wing trade union movement, whoever, argue that you must just continue that tendency, don't transform the state and social transformation. Leave it as it is, just continue to grow the deficit. It's fine, it's good, it's Keynesian politics or Keynesian economics. It's wrong. I'm an economist and I consider myself a left-wing economist. It's wrong to say that continue the status quo, just continue expanding the deficit, that makes left-wing sense. It doesn't, that's actually right-wing because very soon you are left, you enter into a position where you can't sustain your deficit any more. If you can't sustain your deficit any more what happens? You go for structural adjustment so you end up with an extremely right-wing position and yet you thought you were pursuing left-wing positions. There is every sense in left-wing economic policy to be very strict with your budget deficit in order for you not to fall into structural adjustment.
POM Not to be subject to policies imposed by ...?
TM You're going to frog-march eventually. To avoid being frog-marched you are better off managing your budget deficits carefully. So what we have said to departments is that you are no longer going to get these funds that you will go and borrow and you will just keep in your bank account and we roll over, we pay an interest bill on them and so on and the debt mountain increases over the period. No, every cent that you get you must spend. That which you can't spend we're taking it away from you. It means that you don't have the capability to spend and as we squeeze these funds away the deficit goes down because capability to spend, housing has been rolling over billions and billions and those billions we are borrowing from the market. So you can't have that situation, you can't have a left-wing movement that argues that just keep on borrowing, somebody one day will sort it out. No that's wrong. They say it's a breed of new economists who are clustered around the National Institute of Economic Policy who argue that you should just keep on raising the deficit and I don't know what kind of research they have done to say that. So the approach is, yes, let's reduce the deficit.
The other problem is that we have a debt mountain that is going to grow to around 314 billion rand by next year and since the government came into power we have contributed to that debt mountain through that budget deficit not less than 80 billion rand. So the more you increase your budget deficit the more you are adding to this debt mountain. So until somebody tells me what they are going to do to sort out this debt mountain I'm not impressed by half-baked semi-Keynesian arguments.
POM There are two questions. One is there seems to be a rather fundamental difference in the economic ideology the government is pursuing and that COSATU embraces. That's one. Two, the government said when it introduced the policy that it was non-debatable.
TM Well that you must raise with Trevor, the non-negotiable. I don't want to get involved in that.
POM But the markets took that as ...
TM I know but you must raise that with Trevor Manuel not with me. The issue I am raising is the technicalities of the economic policy. That's the one that I'm raising. That's just lousy politics.
POM Well it is lousy politics because if the markets see you going back and negotiating with COSATU and modifying the macro-economic programme it will be seen as a sign of weakness.
TM I know, that's why I'm saying raise it with Trevor, not with me.
POM But you're Minister for Labour, you're one of the key players in this, in the implementation of this strategy.
TM But you know also the markets would like to hear the Minister of Finance.
POM So you're avoiding this one?
TM I can deal with the technicalities of the policies and debate with anybody on the technicalities because I know for certain it has been ANC policy since 1990 that fiscal orthodoxy is good policy for a democratic movement and as I say I am prepared to argue. I have never engaged in a debate with Sam and he can't understand this, because you can't say go on doing the debt mountain. You end up with a United States type of situation, the huge deficit that you can't even manage any more and South Africa is not the United States, it's a small economy and I've indicated to some of the comrades in COSATU that I have debated with that if you want to go the Brazilian route for the latest economic reforms you are welcome where the size of the budget deficit becomes directly related to the level of inflation. And the Brazilian inflation rate was spiralling by the day because depending on the size of the budget deficit the inflation rate went up. They are now taking bitter medicine to try and slash the budget deficit to try and contain those macro-economic reactions, macro-economic balances. So before we get to that stage, before we get into what is called a debt trap we really need to make sure that our deficit is properly managed because then you must begin to understand it. It's a basic lesson in economics.
POM What about just the plan itself which envisages a rate of growth of about 6% by the year 2000. Already you're faced with a slowdown in the economy. This year the rate of growth will be under 3%, manufacturing jobs are being lost as you open the gates to tariff reduction and imports coming in, just becoming part of the global economy so that the employment situation isn't really changing very much at all. If anything it may be getting slightly worse. How in the face of both external constraints, the internal constraints, can the objectives be met?
TM They have to be met. Let me just explain something which I think is not properly communicated. The macro-economic strategy really is a set of projections based on particular assumptions. If the assumptions change they will have to remodel because it is based on certain assumptions. That's where part of the problem is. People think it's kind of a fixed plan, whatever happens it's going to go that way. No, for example, the exchange rate assumption has changed drastically. It's not around R4.35, it's at R4, it goes up.
POM It's the first thing Pat looks at every day before she changes her dollars.
TM Is that so? So it's good for you.
PAT I might buy more computers.
TM Hm. I wish I had dollars! Give me some of your dollars. The point is, and that's based on certain assumptions and if those assumptions are violated, like you do in economics you make assumptions on the basis of which you make certain projections, these are projections, they are not cast in concrete. The exchange rate changes have an impact on projections. But you know there are good things happening in the economy which are not talked about. The other day even the fourth estate talked about something like an over three billion rand plus in the trade account, trade surplus. So it means actually as a result of the depreciation exporters have taken advantage of this. So the trade account is very good. The problem has been in the monetary side. Let me not say more about that because I don't want to affect the markets but that has been the problem, the monetary side which needs to be fixed somehow.
POM Could you elaborate a little?
TM No, let me not elaborate.
POM I'll have to pursue this again with Trevor.
TM Well I don't know but I can't elaborate. If I was Minister of Finance I would. Because I don't want to say something to you and when he talks - as you can see I'm being very careful in this interview, unusually so because the conditions are not quite right. The job situation, I don't know, I await the full statistical review, the census which has been done. I wait to see the real picture. I am a little bit uncertain now what the correct figures are. All kinds of figures are bandied around and I am quite concerned about it because what I see is that there are jobs being created. They may not be the sort of traditional permanent jobs but they may be part-time type of jobs, they may be the seasonal type of jobs, they are the construction type of jobs. For example, this Maputo Corridor will, I am quite certain, create a sizeable number of jobs but those jobs will then have some other multiplier jobs, not direct jobs but the indirect jobs, the multiplier effect.
So if you just look at that and look at other construction, I mean South Africa is becoming a construction site, literally. You drive just between Johannesburg and Pretoria it's a construction site. So between Witbank and Maputo it's going to be another construction site. You look, there are construction sites all over the place. There are housing construction sites, things are happening but the fourth estate is not bringing those things out. The fact that a couple of weeks ago we were being told that housing delivery is bad, it's not working, and just yesterday the President was giving the key in a particular housing site to 200 houses, in a particular site, and there have been many other sites. Recently I have been in the Free State, I have been going to some housing constructions and I have been surprised at what I don't see in the papers is actually happening, it's creating jobs and so on.
So the jobs may not be created in the traditional manufacturing sector but it's increasingly going into the construction side, into the service side. The service industry is growing interestingly. Every time, for example, yesterday I went to the opening of Hugh Masakela's club in Yeoville, every time a club like that opens it creates not less than 20 jobs, business of service. Every time a hotel opens it creates not less than 200 jobs. So in the service side I think it is growing. Every time a petrol station is opened some five or six jobs are created. I am saying I think if we look too much into the traditional manufacturing and mining sectors, we may not be looking at the proper place where jobs are growing. As you know, internationally core manufacturing jobs are declining but the growth is in other service sectors and so on and I think we should look into that. As I say I await the results of the census to see exactly the jobs trend. So your traditional manufacturing worker may be losing their job but somebody else somewhere else may be gaining a job in the service and so on. But one of the things I want in my department incidentally is a capability to sort out these labour statistics. There has to be a capability to sort that out.
POM I have in my case here five different estimates. One says there has been a decline of 60,000 jobs in the manufacturing sector. Another says the only sector which is growing is the jobs in the manufacturing sector. And they are all drawing upon what would appear to be the same basic data.
TM It's a problem.
POM You end up by saying which is which? Tell me, after 2½ years, half way through this administration, do you think the majority of black people in the country are by and large better off economically than they were?
TM No, it's too early to tell. I think we should be able to answer that question in another six years, it's too early to tell, much too early. It's only now, for example, that the black middle class is beginning to show signs of emergence, it has not emerged, just little signs of emerging. It's too early. The black farming sector is only now beginning to show signs as the government policies come in of land restitution. I think it's too early.
POM I know you have meeting at nine thirty.
TM At ten, I must go. I must leave just now.
POM Thank you ever so much. I'll be back in six months.