Address by Deputy Minister van der Merwe at the Business Unity South Africa (BUSA) Cocktail Reception

Another world is possible

Distinguished Guests
Ladies and gentlemen

I am delighted to be here this evening and thank you very much indeed for the invitation to talk to you.

Our government has often stated its vision for a better life for all and hence a world that is different to the one presented to us, another world particularly on the African continent.

Our history of liberation shared many of the idealistic fervour of the early French Revolution that threw up many far sighted ideas considered wild at the time. As early as 1789, these revolutionaries proclaimed their vision of another world, asserting that:

"Why should we hold back our dreams? Just a few years ago many would have said it was impossible for us to challenge the King. Now we are being told to be modest in our aspirations, that we are impatient and unrealistic. But we refuse to take only one step at a time - we are running towards the sun. Our demands may never be met, but the fire of our impatience is unending: we cannot live at ease in a world where these things are not possible."

This vision has been a consistent one advanced by progressive movements throughout our modern history. At the historic Congress of the People on 26 June 1955, 51 years ago, the Congress of the People adopted the Freedom Charter where they stated:

South Africa shall be a fully independent state which respects the rights and sovereignty of all nations.

And that:

South Africa shall strive to maintain world peace and the settlement of all international disputes by negotiation - not war;

Peace and friendship amongst all our people shall be secured by upholding the equal rights, opportunities and status of all.
These ideas were considered wild at the time. But these principles have informed policy formulation and indeed our actions since. They are some of the values that we continue to live by.

Indeed, these idealistic views are still shared by many progressive governments and social movements in the world today, who hold the view that another world is possible. In 2002, in an article posted in The Nation entitled Another World is Possible, Susan George argues that:

"History doesn't offer second helpings"--so we'd better deal with what's on our plate now, which is world poverty, inequality, exploitation and hopelessness. How?

Personally, I have not been so hopeful in decades. The mood is changing. People no longer believe that the unjust world order is inevitable … "Another world is possible." And urgent.

Therefore, in defining how we each envisage this other better world I think it is useful and appropriate to consider our respective roles in society, those of the business community and the diplomatic community - and to consider these roles in the domestic society, but also in the international sense, and how these roles intersect. Given the increasing complexity of 21st century international relations and with the uncertainties that movements in global dynamics present to both governments and people generally, it is important to examine our respective roles and ensure that they work in unison.

There is much discussion in the world today about the role of diplomacy - of the definition of a modern diplomat. Indeed the modern diplomat is very far removed from the original job description of an ambassador from the era of Greek city states, when diplomacy was limited to the interaction between monarchs to maintain the peace. Even in relatively modern times, as the story goes, one angry president sent word to a diplomat that he had sent abroad, complaining that he had not received a letter from him in two years. He, the President, added that if he did not receive word in the next year the ambassador would be recalled!!

Things move rather faster today. We operate in a much more complex environment. The Department of Foreign Affairs is no longer the only player in the world of international diplomacy. Other departments of state as well as non state actors work in areas that were previously the sole preserve of the Ministry of Foreign Affairs.

The fact that other ministries, for example of Trade and Industry, Science and Technology and amongst others also act in the international environment is not necessarily a negative, it is a modern reality. It is also a reality that business and other civil society players act in the international arena. What does become increasingly important is the coordination of our respective roles and a unity of purpose in the work that we do abroad as we all represent our country and carry the responsibility for our people.

In South Africa I believe there is a vibrant discourse between the different players and therefore am grateful again for this opportunity to discuss with you some of our objectives as the lead Ministry and coordinating department of South Africa's Foreign Policy, starting with the African continent which is one of the key focuses of our foreign policy agenda.

Since the latter part of the twentieth century the African continent has been engaged in a deep and fundamental reform and renewal process. The over-arching objective has been and continues to be to break the vicious cycle of political instability, poverty, and underdevelopment, as well as Africa's weak capacity to defend and advance her own interests in the global arena.

For our part, South Africa has put considerable effort and resources, both financial and human into developments on the African continent, and we regard this as an investment, a diplomatic investment. For example we have six government departments working in the Democratic Republic of the Congo, including our defence force, our electoral commission and others. This we do, not for some altruistic purpose but in fact because we firmly believe that our own national interests are best served if we can work together with our neighbours on the continent to eliminate conflict and its causes, to rid the continent of poverty and underdevelopment and, ultimately, to develop a peaceful , stable and prosperous continent .

South Africa's foreign policy is… "informed by our domestic policy and the two are mutually reinforcing. ... our foreign policy is guided by the vision of a better South Africa in a better Africa and a better world."

However, realisation of this vision will not happen without mobilising and gaining support from all formations of civil society on the one hand, and on the other achieving positive developments in respect of good governance and democratic practice amongst the state players.

In respect of the latter, we work with and through the African Union and its organs and programmes (such as NEPAD and the African Peer Review Mechanism) to entrench democracy and good governance on our continent.

The establishment of the AU through the Constitutive Act, with its profound vision and progressive principles, has generated high expectations for rapid political, social and economic progress to transform the lot of the African people and attain the ideal of a better life for all.

According to a 2005 report by the Economic Commission for Africa entitled "Progress towards Good Governance in Africa", there are four identifiable positive trends on the road to creating capable states in Africa and these are:

1. Democratic transition - many African countries have made significant strides, evolving from authoritarian or military regimes to more democratic arrangements.
2. Political inclusiveness - many African countries are seeking to ensure that the executive and legislative arms of government reflect the profile of their people in regional, ethnic, racial and religious terms.
3. Voice and accountability - new avenues are being created across Africa to allow citizens to participate in the political process to express their demands without fear of retribution.
4. Public financial management and accountability - more countries are running smaller deficits, meetings their targets for revenue mobilisation, managing their tax systems more effectively, improving fiscal transparency and creating institutions and arrangement for better auditing.

Also recent comments by the World Bank President, Paul Wolfowitz, have led to a renewed hope in the forward progress on our the continent. Addressing an African investment forum in July this year he argued that not enough attention is being paid to African success stories. This at a time when there is a decline in active armed conflicts on the continent from 16 in 2002 to 6 today and the fact that 15 African countries have had average growth rates of better than 5% over the past decade. Wolfowitz said that the tendency when it comes to Africa is to focus on security issues and not give enough attention to economic and social development issues, which are equally important.
These positive developments did not come about by accident but through the deliberate efforts of African leaders to adopt democratic dispensations; encourage participatory democracy; through being more accountable; and through prudent stewardship of public resources.

These are real political gains that will contribute towards achieving the kind of world we desire. However, these political gains will amount to naught if not underpinned by tangible economic development.

Development entails the improvement of people's lifestyles through improved education, incomes, skills development and employment. Development also means that people should have decent housing, and that they should have security in their homes and productive places of work.

While our job as diplomats is essentially to represent our countries' interest abroad, the challenges posed by today's rapidly globalising world mean that traditional diplomacy alone is not sufficient.

Globalisation has "rendered the traditional professional boundaries of diplomacy more porous and put into question the territorial claims of the traditional diplomats."

We need, as partners, the business community a well as trans-national NGOs and other institutions working in the international arena.

As a developing country, we need to enhance their capacity to benefit from the positive potential of globalisation.

A recent International Labour Organisation Report on the Social Dimension of Globalisation states that:

Globalisation has set in motion a process of far reaching change that is affecting everyone. New technology, supported by more open policies, has created a world more interconnected than ever before. This spans not only growing interdependence in economic relations - trade, investment, finance and the organisation of production globally- but also social and political interaction among organisations and individuals across the world.

The potential for good is immense. The growing interconnectivity among people across the world is nurturing the realisation that we are all part of a global community. This nascent sense of interdependence, commitment to shared values, and solidarity among peoples across the world can be channelled to build enlightened and democratic global governance in the interest of all. The global market economy has demonstrated great productive capacity. Wisely managed, it can deliver unprecedented material progress, generate more productive and better jobs for all, and contribute significantly to reducing world poverty."

South Africa endorses the perspective that holds that the current path of globalisation must change, that the benefits of globalisation can be expanded and that the means and resources needed to create a better world are available.

It is therefore encouraging to note that South African businesses have increasingly been involved in creating economic opportunities in Africa that have greatly enhanced our international standing. According to the results of a survey published in 2004 by the South African Institute of International Affairs on Doing Business in Africa:

"In less than a decade, South Africa has become one of the top 10 investors in…. many African countries, displacing those companies from Europe (particularly in countries that are former colonial powers) and America, which have traditionally retained their economic links with Africa.

These developments make an examination of the role being played by our country, and particularly its business community, important to the unfolding picture of trade and investment in Africa. South Africans believe their commitment to making Africa is long-term."

Judging by these developments, there is indeed cause for optimism that another world is possible. These are all real steps towards the achievement of our objectives as a country that support our foreign policy agenda to create a better South Africa through promoting our national interests abroad.

Consistent with our values, we do not, nor should not, seek to use our relative economic strength on the continent do dominate others, rather, we should continue to pursue a principled and consistent foreign policy agenda that seeks to positively influence others through persuasion. These are the values that we also envisage our civil society formations, business included, will carry with them in their engagements beyond the borders of our country in the pursuit of opportunities.
Collaborative initiatives will go a long way in contributing to durable peace and sustainable development. Already, the value of such collaboration is starting to bear fruit in South Africa as well as on the continent.

There are new "diplomats" now, new players in the promotion of our countries' interests abroad and as I have said, one of those players is of course business.

A report produced by the World Social Forum talks to the power of business in the global community and also its location in the world…

" … transnational corporations and big business in general have increased their power greatly in the last decade. To note just a few examples of this power:

"In terms of sheer scale of economic activity, the giant corporations now rival all but the largest countries. Comparing corporate turnover to national GNP, 51 of the world's top 100 economies are corporations.

There are 63, 000 transnational corporations worldwide, with 690, 000 foreign affiliates. Three-quarters of them are based in North America, Western Europe and Japan. Ninety nine of the hundred transational corporations are from industrialised countries.

These corporations profit from and perpetuate what is essentially a racist global system that benefits the North, and a small minority in the South, at the expense of the vast majority of people in the South and a growing number of people (often of African, Latin American and Asian descent) in the North.

WTO rules overwhelmingly favour the giant transnationals. In fact, these companies play a central role in shaping the WTO and other trade and investment agreements that allow corporations increasingly to transcend the state.

So we need to examine our roles in respect of how each contributes to the transformation of our society to create a better South Africa and a better Africa in a better world. We recognise that rather than being threatened by the emergence of new actors on the foreign policy scene, we need to encourage the positive role that business can play in advancing our foreign policy objectives.

If government has adopted deliberate efforts to build the confidence of other countries in our vision, we also need South African businesses that operate on the continent to concentrate on forging partnerships for sustainable development rather than focusing on short-term profit gain. Otherwise we will continue to feed into stereotypes about unscrupulous business practises.

At the domestic level here in South Africa, there are already generally acceptable principles for good governance for businesses as enshrined in the King Report on Corporate Governance for South Africa (King II). King II acknowledges that there is a move away from a single bottom line (that is, profit for shareholders) to a triple bottom line, which embraces the economic, environmental and social aspects of a company's activities. In the words of the King Committee:

" … successful governance in the world in the 21st century requires companies to adopt an inclusive and not exclusive approach. The company must be open to institutional activism and there must be greater emphasis on the sustainable or non-financial aspects of its performance. Boards must apply the test of fairness, accountability, responsibility and transparency to all acts or omissions and be accountable to the company but also responsive and responsible towards the company's identified stakeholders. The correct balance between conformance with governance principles and performance in an entrepreneurial market economy must be found, but this will be specific to each company.

It is of course accepted that business people have a legitimate expectation to receive a return on investment. But the question is at what point do our political objectives and our economic ones converge to make the greatest impact in terms of long term foreign policy objectives and indeed the long term goals of our country as a whole? If we can provide an answer as to what this convergence point is, then we can consider ourselves to well on the way to attaining our vision to create a just and equal world with sustainable national economies.

Success in attaining the kind of world we strive for lies in strong partnership between government and business. Occasion such as this provide a valuable opportunity to share ideas on how we can work together for the realisation of our national interests. This is especially important at a time when the challenges in the global economy remind us all of the increasing interdependence between our political and economic objectives.

As a new democracy, one which many people believe is dynamic and exciting, we have the energy to consider that another world is possible, and work towards its fulfilment.

Let me conclude with an interesting observation about the possibilities for change that Joseph Stiglitz makes in his seminal publication entitled, Making Globalisation Work. In the first Chapter, he argues that:

Globalisation will change. The current system cannot continue. It will either change as a result of crisis or it will change because we approach problems in a systematic rational way. The hope that underpins my book is that we will opt for the second option.

I wish to thank you for your attention and to once again emphasise the importance which government attaches to partnership with civil society in general and business in particular to creating a more equal and just world.

I thank you.