State of the Nation address by the President of South Africa, Thabo Mbeki, to the joint sitting of the Houses of Parliament, Cape Town, 21 May 2004

Speaker and Deputy Speaker of the National Assembly

Chairperson and Deputy Chairperson of the National Council of Provinces

Deputy President of the Republic

Honourable leaders of our political parties and Honourable Members of Parliament

Our esteemed Chief Justice and members of the Judiciary

Heads of our Security Services

Governor of the Reserve Bank

President Mandela and Mrs Graca Machel

Ministers and Deputy Ministers

Premiers and leaders of SALGA

Mayors and leaders in our system of local government

Our honoured traditional leaders

Heads of the state organs supporting our democratic system

Directors-General and other leaders of the public service

Your Excellencies, Ambassadors and High Commissioners

Distinguished guests, friends and comrades

People of South Africa

On the occasion of the official opening of the first session of our Third Democratic Parliament, I am privileged to convey my congratulations to all the Honourable Members for your election to serve as the representatives of our people for the next years.

I am certain that you will discharge your responsibilities in this regard sensitive to the important messages communicated by our people to all of us as we campaigned for their votes.

I wish you success in your work as you carry out your obligations as our country's law-makers and as you do everything else that our Constitution and legislation require of our national Houses of Parliament.

I would also like to congratulate you, Madame Speaker and Chairperson of the National Council of Provinces, as well as your Deputies on your election as our Presiding Officers and similarly wish you success in your important work.

Our congratulations and best wishes also go to the new Secretary of Parliament, Mr Zingile Dingani, who will soon succeed Mr Sindiso Mfenyana, whom I thank for his many years of service to Parliament. I am certain that all of us wish him an equally successful future, confident that he will continue to serve our people.

All of us were very pleased that the April elections were peaceful, free and fair, reinforcing the legitimacy of both our national and provincial legislatures and our national and provincial executives. This strengthens the mandate of these institutions to discharge their responsibilities as defined by our Constitution.

In this context, I am privileged to acknowledge the presence in the House of many of our religious leaders, drawn from all the faiths espoused by our people. I thank these important leaders of our people for their prayers and the critically important role they played to ensure that we had peaceful, free and fair elections.

It is most fitting that they are with us today, which gives all of us the opportunity to salute them, as well as convey to them our hope that they will continue to bring their considerable influence to bear in favour of the pursuit of the common goal of a better life for all our people.

Madame Speaker:

When we delivered the State of the Nation Address on February 6 this year, at the start of the final session of our Second Democratic Parliament, we said:

"In a few months time, we will return to these Chambers to inaugurate our third democratic parliament. Whoever will be President then will deliver yet another State of the Nation Address.

"That will provide an opportunity to address the more detailed issues on the government's programme as well as matters that will be covered in the Budget Speech and the Medium Term Revenue and Expenditure perspectives that will support the government's actions as our country begins its Second Decade of Democracy."

To summarise what we said a little over three months ago, Madame Speaker, we committed ourselves to:

· move our country forward decisively towards the eradication of poverty and underdevelopment in our country, taking care to enhance the process of social cohesion;
· achieve further and visible advances with regard to the improvement of the quality of life of all our people, affecting many critical areas of social existence, including health, safety and security, moral regeneration, social cohesion, opening the doors of culture and education to all, and sport and recreation;
· successfully address the important challenges of persisting racial and gender inequalities, the disempowerment of our youth and people with disabilities, and proper care for children and the elderly;
· focus on the growth, development and modernisation of the First Economy;
· respond to the challenges posed by the Second Economy, which economy constitutes the structural manifestation of poverty, underdevelopment and marginalisation in our country;
· ensure that the public sector discharges its responsibilities to our people as a critical player in the process of the growth, reconstruction and development of our country;
· focus especially on raising skills levels within the public sector, and ensure its managerial and technological modernisation, driven by a clear understanding of the developmental tasks of our democratic state;
· strengthen our system of local government;
· further integrate our system of governance, responding effectively to the requirement for cooperative governance;
· consolidate the practice of creating public-private partnerships and building government-civil society cooperation;
· ensure that the system of traditional government plays the role ascribed to it in our Constitution and legislation;
· build the sense of national unity, united action and the new patriotism;
· mobilise all our people voluntarily to act together to achieve the tasks of reconstruction and development;
· respond to the diverse political, economic, social and technological challenges of the process of globalisation;
· continue to work towards the regeneration of Africa; and,
· help construct a new world order that is more equitable and responsive to the needs of the poor of the world, who constitute the overwhelming majority of humanity.

At the core of our response to all these challenges is the struggle against poverty and underdevelopment, which rests on three pillars. These are:

· encouraging the growth and development of the First Economy, increasing its possibility to create jobs;
· implementing our programme to address the challenges of the Second Economy; and,
· building a social security net to meet the objective of poverty alleviation.

With regard to the First Economy, we will implement the following programme of action:

We will work to raise the rate of investment in the 1st economy.

To this end, we will engage our social partners to implement the decision taken at the Growth and Development Summit that 5% of the funds held by the institutional investors will be invested in the real economy. This discussion should be completed before the end of the current calendar year.

At the beginning of September, we will announce the detailed and enhanced investment plans of the state-owned enterprises, including the financial development institutions.

At the same time, we will announce plans for the better utilisation of the Isibaya Fund of the PIC, which was established by law.

We will undertake road shows to present to potential domestic and foreign investors each of the sectors identified within our Microeconomic Reform Strategy, among other things explaining the incentives available to attract investment into these sectors, including the advantages offered by the Industrial Development Zones.

We will also finalise the Enterprise Development Bill to provide a framework for the development, adjudication and streamlined extension of incentives to all enterprises in a transparent manner.

We will continue to work to reduce the cost of doing business in our country.

In this regard, we will implement the plans we announced in the past concerning our national logistics system organised in Transnet. Accordingly:

We will seek to work with Parliament to expedite the process of the restructuring of our ports to bring in new investment and lower the costs of moving imports and exports.

The Coega Industrial Development Zone is already open and the first ship will be able to dock at the new Coega/Ngqura port by September next year.

Spoornet will increase its freight capacity by 30% over the next five years, while the Rail Commuter Corporation is investing R220 million this financial year to improve commuter transport and safety.

National Treasury is in the final stages of registering the King Shaka International Airport and freight terminal as a Public-Private Partnership. Construction will start after agreement has been reached with the Airports Company over land usage in the ongoing negotiations.

Further, with regard to energy:

The first Regional Electricity Distributors will be ready to operate by June 2005 and the whole process of the establishment of these structures will be completed by January 2007.

A tender for the provision of new generating capacity to provide for the growing energy needs from 2008, will be issued publicly in December and should be awarded during the first half of 2005.

The final decisions on the Second National Telecommunications Operator will be taken without undue delay to ensure more development and competition in this sector.

The government will also lead the process of ensuring that administered prices do not unnecessarily add to the general costs of production and the inflationary pressures in our economy. Our policies in this regard will be announced by October this year.

We will pay particular attention to the further growth of the small and medium business sector. In this regard:

We will carry out a comprehensive review of the regulatory framework that impacts on this sector, to facilitate its further growth and development. This will be completed by September, and will be followed by such changes as may be necessary.

We will merge Ntsika and the National Manufacturing Advisory Centres before the end of this year, to create a unified enterprise development agency that will provide non-financial support to small and medium enterprises.

This year's budget for the unified agency will be R120 million.

We will work with the financial institutions to implement the provisions in the Financial Charter relevant to the development of small and medium enterprises.

We will re-establish the Agricultural Credit Scheme (ACS) in the Department of Agriculture to provide capital for this sector, leaving the Land Bank to deal with the established commercial sector. R1 billion is immediately available to start the ACS.

We will submit to Parliament a Bill on Cooperatives before the end of the present calendar year.

We will speed up the process of skills development, focusing on the shortfalls that we have already identified.

In the period since the holding of the Growth and Development Summit, we have reached the figure of 64 000 with regard to learnerships. We have already studied our experience in this regard. Arising from this, we will engage all the Sector Education and Training Authorities, the SETA's, to increase the uptake of learners and improve the focus on the skills that are in short supply. This process of engagement will be completed by the end of the year.

We will work to ensure adequate funding of the technical colleges and proper alignment of the courses they offer with the requirements of the economy.

By the end of the year, we will compile a register of all graduates so as to link them up with Umsobomvu, learnerships, and other schemes and institutions that would help them to start their own businesses or get jobs.

Within the next three months, the Cabinet will finalise its work on the Immigration Regulations, among other things to ensure that we access such scarce skills from the rest of the world as may be required for our accelerated development.

We will do more to improve our export performance, focusing on services and manufactured goods.

Accordingly, we will engage the export sectors to assist them to take full advantage of the possibilities we have to expand access to the EU and the US markets, as a result, respectively, of the SA-EU Trade and Development Agreement and AGOA.

We will pay the necessary attention to the earliest possible conclusion of trade agreements with Mercosur, EFTA, the US, India and China.

We will also focus on our further interaction with the African continent, especially within the context of SADC and NEPAD.

In the coming financial year, we will increase spending on scientific research and development. This year we will implement the new governance system for the science councils, while we continue to work on the diffusion of new technologies across the economy.

In this context we must mention that the construction at Sutherland, the Northern Cape, of the largest optical, infrared telescope in the southern hemisphere will be completed in December. A formal bid has been submitted for us to host thelargest radio telescope ever built, the so-called Square Kilometre Array Radio Telescope. Namibia is host to the most powerful gamma ray (HESS) telescope in the world, which has now been commissioned. I mention all these to indicate thedevelopment of our region as a Global Hub for Astronomy and Space Science and Technology. This underlines the need for us to devote more resources to the development of science and technology.

Similarly, we will implement a detailed programme to respond to the challenges of the 2nd economy. In this regard:

We will ensure that we launch the Expanded Public Works Programme in all provinces by the beginning of September, concentrating on the 21 urban and rural nodes already identified in terms of our Urban Renewal and Integrated and Sustainable Rural Development Programmes. As we have said before, the EPWP integrates, among others, the objectives of the development of the social and economic infrastructure, human resource development, enterprise development, and poverty alleviation.

A Financing Protocol relating to the Urban Renewal and Rural Development Programmes will be finalised within two months, to improve the effective and coordinated financing of these Programmes by the three spheres of government and the different departments.

By the end of the year, the Apex Fund, dedicated to the extension of micro-credit, will be operational.

The Department of Agriculture will increase its support to agricultural activities in the communal land areas as well as other small-scale agriculture, drawing on resources within the Agriculture Credit Scheme, ensuring the implementation of the Land Reform for Agricultural Development process and the Comprehensive Agricultural Support Programme. Once approved, the Communal Land Rights Bill will improve the possibilities for better economic utilisation of communal land. The Department of Agriculture will, by July, publish its AgriBEE framework for public comment.

During the current financial year, we will finalise our strategy for the development and extension of financial and non-financial support to cooperative enterprises, as well as submit draft legislation on cooperatives to Parliament.

The Department of Education will expand the reach of the Adult Basic Education and Training programme, ABET, aligning it with the training objectives of the EPWP.

Working with the provincial and local governments, the Department of Public Service and Administration will take the necessary action to ensure that Community Development Workers are deployed by the end of this calendar year in the 21 identified urban and rural nodes.

The Departments of Public Service and Administration, Provincial and Local Government, and Communications will work to ensure that modern information and communication technologies (ICT) are introduced in these development nodes as quickly as possible, to assist in all their developmental and governance efforts.

Broad based black economic empowerment remains a pivotal element of government policy. Accordingly:

We will proceed to establish the Black Economic Advisory Council visualised in the black empowerment legislation as a matter of urgency. One of its first tasks will be to consider the steps we need to take to achieve the speedy and effective implementation of this empowerment legislation. It will also reflect on the ways and means we must adopt to take advantage of the existing Black Economic Empowerment Charters.

The National Empowerment Fund will announce new financial and non-financial empowerment products within the next three months. In this context, we must bear in mind that government has provided R1 billion for black economic empowerment during the current fiscal year, with R10 billion provided for over the next five years.

As with all our other development programmes, the Black Economic Empowerment process will also focus on the challenge of the empowerment of women, people with disabilities, and the youth.

As we have already indicated, we will continue to build a social security net to meet the objective of poverty alleviation. Accordingly:

· Again, in improving the quality of life of all our people, work will continue to ensure that social grants reach all the 7,7 million beneficiaries. The new social security agency will become operational in 2005, improving the integrity and efficiency of the system;
· We will, within two years, add about 3,2 million children who will be eligible for child support grants as the upper age-limit is raised to children turning 14.
· R166 billion will be allocated over three years for social security;
· We will continue to implement other social security initiatives such as the school nutrition programme and the provision of free basic services.

However, a society in which large sections depend on social welfare cannot sustain its development. Our comprehensive programme to grow the economy, including the interventions in both the First and Second Economies, improving sustainable livelihoods and create work is meant precisely to ensure that, over time, a smaller proportion of society, in particular the most vulnerable, subsists solely on social grants.

We also need to achieve further and visible advances with regard to the improvement of the quality of life of all our people. To achieve this, the following will be done:

· We will ensure that within the next five years, all households would have easy access to clean running water;
· By December this year, through our programmes, we will provide clean and potable water to the 10th million South African since 1994;
· During the current year more than 300 000 households will be provided with basic sanitation;
· Through our integrated system of government, with a strengthened local government working with our state enterprise, ESKOM, we will, within the next eight years, ensure that each household has access to electricity;

Further, we will continue to do what is necessary to improve the programmes that promote a better health profile of the nation as a whole. In this regard:

· Our programme of ensuring easy access to clean water for all the households within five years would help us in the fight against cholera and other waterborne diseases.
· Through our intensified programme against malaria we will reduce malaria cases by 10% each year.
· We have already started with the implementation of our Comprehensive Plan on HIV and AIDS. 113 health facilities will be fully operational by March 2005 and 53 000 people will be on treatment by that time. At the same time, more impetus will be given to the Khomanani social mobilisation campaign as we intensify home-based care.
· The regulations on the pricing of medicines are now in effect. We anticipate that by the end of this year the consumer will pay less for the medicines at the retail outlets.

Clearly, the health programme straddles aspects such as the promotion of healthy life styles, encouraging changes in risky behaviour especially among the youth and reduction of non-communicable causes of death such as diabetes, asthma and hypertension.

We will build on the experiences of the past ten years to intensify the housing programme. The following will be done:

· A comprehensive programme dealing with human settlement and social infrastructure, including rental-housing stock for the poor will be presented to Cabinet within three months.
· In the next three years we will spend R14,2 billion to help our people to have access to basic shelter.
· From this financial year we will also address the trend in some provinces where there has been a slow-down in housing delivery as well as addressing the broader question of spatial settlement patterns and implications of this in our efforts to build a non-racial society.

The opening of the doors of learning and culture is critical to the improvement of the quality of life of all our people. In this regard, the following additional measures will be implemented:

· We will, during the course of this financial year, recapitalise all the technical colleges and intermediate training institutions, ensuring that they have the necessary infrastructure, capacity and programmes relevant to the needs of our economy;
· During this calendar year, we will consolidate the merger process of institutions of higher learning ensuring that they do, in reality, become single institutions with a unified institutional culture;
· By the end of this financial year we shall ensure that there is no learner and student learning under a tree, mud-school or any dangerous conditions that expose learners and teachers to the elements;
· By the end of the current financial year we expect all schools to have access to clean water and sanitation.

We also have a duty to improve the safety and security of all our citizens and communities. In this regard:

· We will ensure that by 2006 there would be 152 000 officers on active duty in the South African Police Service. The process of recruitment and skilling of the agencies is already underway;
· We will, in the current financial year, establish at least two Community Courts in each province, modelled along the Hatfield Community Court in the City of Tshwane, which in the first month of its operation has already finalised 200 cases with a 100% conviction rate;
· In the next three months we will set up Special Joint Teams to target and focus on serious crime with an immediate objective of apprehending the top 200 criminals in the country, using all legal instruments to bring them to justice;
· In the next two months Cabinet will finalise the Victims Charter and by the end of this calendar year we will commence with the implementation of the Victim Support Services Programme so as to attend urgently to needs of the victims of crime;
· From this financial year, the programme to set up specialised courts, including those dealing with commercial crimes and women and child abuse, will be intensified as will the process of transforming the entire judicial system;
· Combined with these security activities will be enhanced integration between the security and social clusters to deal with the social roots of many of the crimes communities experience, starting off in the nodes identified for rural and urban renewal.

Madam Speaker;

We shall, in the coming months, conduct a thorough review of the impact of socio-economic transformation on social cohesion within communities and across society as a whole, including such qualitative issues as non-racialism and non-sexism, the role and place of family, value systems, identity and moral regeneration. We hope that this exercise, which will involve structures of civil society, will help us better understand who we are and better appreciate quality of life beyond the material.

As we said in February, we have to ensure that the public sector discharges its responsibilities to our people as a critical player in the process of the growth, reconstruction and development of our country. Accordingly:

We expect to pass the Intergovernmental Relations Framework Bill this year to provide the necessary statutory framework for the strengthening of our system of cooperative governance.

Within the next six months, we will complete the process of ensuring the harmonisation of the municipal Integrated Development Plans, the provincial Growth and Development Strategies and the National Spatial Development Perspective. Among other things, this will increase the capacity of local government to discharge its responsibilities with regard to the challenge of economic growth and development.

Local government will invest R38 billion in infrastructure development over the MTEF period, with R16.5 billion of this being transfers from national government. Total transfers from national to local government during this period will amount to R47.36 billion. Recognising the critical importance of local government in terms of social and economic delivery, we are undertaking a major review of the local government equitable share allocation and formula, to ensure that municipalities with low fiscal capacity are adequately resourced, and empowered to collect their own revenues. We will complete this review in six months. The review will also focus on such systems as need to be introduced to improve municipal capacity for credit control and implementing policies that alleviate the plight of the indigent.

The national government will immediately initiate discussions with the two other spheres, provincial and local government, to examine the feasibility of introducing at these levels a system of institutionalised cooperation with civil society similar to the national Presidential Working Groups. We will also assist local government to ensure that the system of Ward Committees functions as visualised in national legislation.

The national departments will liase with the National Development Agency to improve their cooperation especially with development non-governmental and community based organisations.

We will ensure the proper functioning of the public sector SETA to address the challenge of building a public service that has the requisite skills and motivation to meet the developmental challenges of our democratic state. In this regard, we have already mentioned the programme to deploy the Community Development Workers.

Further to improve public access to government services, within two months we will launch the Batho Pele Gateway portal, which will provide streamlined government services on-line, including through public information terminals in Post Offices and Multi-Purpose Community Centres. 60 of these Community Centres will have been built by the end of this year and plans finalised to have at least one of these in each of our 284 municipal areas. Similarly, we will further refine the imbizo programme of direct interaction between the government and the people, drawing on our experience over the last five years.

We will work with the relevant provincial governments to expedite the passage of provincial legislation regarding the place and role of the system of traditional government. This will open the way to allocate resources to this institution to enable it to play its role as defined by the law.

The government is also in the process of refining our system of Monitoring and Evaluation, to improve the performance of our system of governance and the quality of our outputs, providing an early warning system and a mechanism to respond speedily to problems, as they arise. Among other things, this will necessitate an improvement of our statistical and information base and enhancing the capacity of the Policy Coordination and Advisory Services unit.

We will continue to focus on making an effective contribution to the challenge of accelerating the process of the renewal of the African continent. Accordingly:

We will ensure that we contribute as much as we can to the effective functioning of the African Union Peace and Security Council to which we have been elected. This will include continuing to meet our obligations to the people of the DRC and Burundi and convening the post-conflict reconstruction process in the Sudan, as we have been requested to.

We will continue to make our contribution to the implementation of the NEPAD programme, and, as requested by the AU, also continue to host the NEPAD Secretariat.

We will immediately begin the process leading to our review next year by the African Peer Review Mechanism.

We will continue to encourage the strengthening of the links between our continent and the rest of the world. For this reason we will attend the June G8 Summit in the United States, cooperate with Indonesia to convene next year's Afro-Asian Conference, and host the preparatory meeting for this Conference as well as the Non-Aligned Movement in Durban later this year. We will address the European Parliament in November.

We have offered to host the Pan African Parliament and await the decision that will be taken by the July Summit Meeting of the African Union in this regard.

We will continue to contribute to the effective functioning of our regional organisation, SADC, helping to enhance its capacity to speed up the process of regional integration.

We will continue to work with our sister countries Zimbabwe and Swaziland so that the citizens of these countries can also enjoy peace, stability and sustainable development.

We will work to consolidate the system of bilateral cooperation agreements we have entered into with a significant number of African countries, which include Egypt, Algeria, Morocco, Nigeria, the DRC, Uganda, Rwanda, Tanzania, Mozambique, Namibia and Lesotho.

The international situation continues to emphasise the need for us to discharge our continuously increasing responsibility to contribute to the resolution of urgent questions facing the peoples of the world. In this context:

We will continue to follow the evolution of the situation in the Middle East, necessarily focusing on the Israel-Palestine and Iraq conflicts, contributing what we can to their solution, including support for the vigorous implementation of the Road Map.

We will persist in the effort to ensure the successful conclusion of the WTO negotiations by the beginning of the coming year, as originally planned. In this regard, we will work with other countries to ensure the effective contribution of the G20 to this outcome.

We will intensify our preparations to participate in next year's Nuclear Non-Proliferation Treaty Review Conference.

We will cooperate closely with India and Brazil to strengthen IBSA, the India-Brazil-South Africa formation, while further strengthening our relations with China.

We will continue to work with the International Investment Council and the Presidential Council on Information Society further to improve our responses to the process of globalisation and our access to foreign direct investment and modern information and communication technologies.

We will also continue to work with other countries to speed up the process of the restructuring of the United Nations and other international organisations to respond to the urgent need to strengthen the multilateral system. This will include making an input into the work of the Panel of Eminent Persons, which was established by the UN Secretary General, and which must present its report before the end of the year.

I would like to take this opportunity to extend our best wishes to our athletes who will represent us at the Athens Olympics. They will participate in these Games as our Ambassadors, bringing to the youth and sportspeople of the world the message from this little corner of a great Continent that our people are ready to join hands with the rest of humanity to build the just world whose time is long overdue.

Exactly a week ago, our delegation presented our case to the President and the Executive Committee of FIFA for us to host the 2010 Soccer World Cup. The decision of the FIFA Executive Committee announced the following day was celebrated both by our own people and many other Africans throughout our continent and the African Diaspora.

It is a matter of great importance to us that all the other countries that competed to host the World Cup have communicated their determination to work with us to ensure an excellent 2010 Soccer World Cup. In this regard, we must also extend our sincere appreciation to Nigeria, which earlier withdrew from the contest, announcing its support for our bid.

I would like to take this opportunity to express our profound thanks to SAFA, our Bid Committee and Bid Ambassadors, and everybody else who contributed to the success of our bid. Once more, we demonstrated our ability to gain important victories when we unite to pursue common goals.

Less than a month ago, the peoples of the world joined us in Pretoria as we celebrated our First Decade of Freedom. The level and the breadth of the international participation in these celebrations demonstrated that the peoples of the world continue to value our achievements in creating the kind of society defined by our Constitution.

This was further confirmed by the many other celebrations that took place in various countries throughout the world, including the United Nations and other institutions.

These two celebrations, of our 10th anniversary and the success of our bid, confirm the strength of the sentiment shared by millions across the globe, for a world of peace, democracy, non-racialism, non-sexism and freedom from poverty. They speak of a shared dream for international solidarity and friendship among the peoples, and the victory of the African renaissance.

These circumstances suggest that perhaps the time has come for the emergence of a united movement of the peoples of the world that would come together to work for the creation of a new world order. This would respond to the urgent need to address the concerns and interests of the billions on our universe who are poor and marginalized, as are the same masses in our country who must be the principal focus of our efforts to build a caring and people-centred society.

Tomorrow our country will say its last farewells as we lay to rest the remains of a great South African artist, Brenda Fassie, who passed away much earlier than should have been the case. Perhaps while she was among us, we did not fully appreciate how much her talent served to enrich our lives. But now we know, too late to do anything to bring her back to give us joy.

Together, in everything we do, we must respond to her melodic call - Vul' indlela!
Let us get down to work in a people's contract to build a better South Africa and a better World.

Thank you.

Issued by: The Presidency, 21 May 2004