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Johannesburg - Political rights are meaningless if they are not followed by fundamental economic change and tangible changes in people’s lives, Finance Minister Pravin Gordhan said at the Mail and Guardian Gala Dinner on Wednesday.
"The end of apartheid provided the opportunity to dismantle the organised system of oppression and tyranny and to begin the hard work of developing an equitable economic order," he said in a prepared speech.
In his view SA now faces the challenge of effecting further changes to a society premised on social and economic justice.
He said the important question to ask about transformation in SA is "for whom, and at whose expense"?
"The lesson from around the world is that where the benefits are not spread, and where the gap is too wide, collapse, and sometimes even a reversal of the political gains, is the price that is paid."
He cautioned, though, that the negative narrative around South Africa gives a skewed perspective.
"That we have a stable democracy, free press, rule of law, strong and independent courts, a reliable banking system, entrenched property rights – all of which are factors that generate confidence in a country – are taken for granted," he said.
"Yet it is precisely these factors that lead others to continue to be interested in investing in our country. The challenge is to ensure that we do not become complacent about the faultlines, and where necessary introduce the kind of reforms that will correct the economic imbalances."
Use power levers
"We must judiciously use the powerful levers of the state, in partnership with communities, trade unions, with schools and tertiary education institutions, and importantly with the private sector, to prosecute the next set of changes," he said.
"It is our collective responsibility to create the opportunities for our people to live productive, prosperous and dignified lives."
He said political and economic developments at home and abroad are dynamic and unpredictable. He regards the recent World Economic Forum in Davos as a useful opportunity to assess and understand the current global dynamics.
"South Africans tend to be too inward-looking and have a very limited discourse on the geopolitical and geo-economic developments across the globe, and their implications for South Africa," said Gordhan.
"What was clear in Davos is that the global economy is in the throes of a transition: from fire-fighting mode in the middle of the global financial crisis, to stabilisation, and to a state that we don’t fully understand as yet."
Rand woes
Gordhan said he knows many people have concerns about the rand.
"We are monitoring developments. We believe that, while the currency may be trading below its fair value, it is behaving as one would expect of a floating currency by adjusting to various market perceptions."
He said while a weaker currency implies a high cost of importing, it also provides an opportunity for exporters.
"Our challenge is whether we have a private sector that is agile enough to seize the opportunities presented by a weaker currency and use that to their advantage, which can improve our trade account," he said.
South Africa has to prepare itself for a new era in global economics where solutions are not one-dimensional.
The government is currently working on the NDP’s first 5-year plan which will be incorporated in the 2014 Medium-Term Strategic Framework.
"The investments that may come, will mean nothing if the working poor and unemployed do not benefit from them," said Gordhan.
"And government, whilst it is committed to sustaining the social safety net, cannot expand it indefinitely."
"The end of apartheid provided the opportunity to dismantle the organised system of oppression and tyranny and to begin the hard work of developing an equitable economic order," he said in a prepared speech.
In his view SA now faces the challenge of effecting further changes to a society premised on social and economic justice.
He said the important question to ask about transformation in SA is "for whom, and at whose expense"?
"The lesson from around the world is that where the benefits are not spread, and where the gap is too wide, collapse, and sometimes even a reversal of the political gains, is the price that is paid."
He cautioned, though, that the negative narrative around South Africa gives a skewed perspective.
"That we have a stable democracy, free press, rule of law, strong and independent courts, a reliable banking system, entrenched property rights – all of which are factors that generate confidence in a country – are taken for granted," he said.
"Yet it is precisely these factors that lead others to continue to be interested in investing in our country. The challenge is to ensure that we do not become complacent about the faultlines, and where necessary introduce the kind of reforms that will correct the economic imbalances."
Use power levers
"We must judiciously use the powerful levers of the state, in partnership with communities, trade unions, with schools and tertiary education institutions, and importantly with the private sector, to prosecute the next set of changes," he said.
"It is our collective responsibility to create the opportunities for our people to live productive, prosperous and dignified lives."
He said political and economic developments at home and abroad are dynamic and unpredictable. He regards the recent World Economic Forum in Davos as a useful opportunity to assess and understand the current global dynamics.
"South Africans tend to be too inward-looking and have a very limited discourse on the geopolitical and geo-economic developments across the globe, and their implications for South Africa," said Gordhan.
"What was clear in Davos is that the global economy is in the throes of a transition: from fire-fighting mode in the middle of the global financial crisis, to stabilisation, and to a state that we don’t fully understand as yet."
Rand woes
Gordhan said he knows many people have concerns about the rand.
"We are monitoring developments. We believe that, while the currency may be trading below its fair value, it is behaving as one would expect of a floating currency by adjusting to various market perceptions."
He said while a weaker currency implies a high cost of importing, it also provides an opportunity for exporters.
"Our challenge is whether we have a private sector that is agile enough to seize the opportunities presented by a weaker currency and use that to their advantage, which can improve our trade account," he said.
South Africa has to prepare itself for a new era in global economics where solutions are not one-dimensional.
The government is currently working on the NDP’s first 5-year plan which will be incorporated in the 2014 Medium-Term Strategic Framework.
"The investments that may come, will mean nothing if the working poor and unemployed do not benefit from them," said Gordhan.
"And government, whilst it is committed to sustaining the social safety net, cannot expand it indefinitely."
