17 November 1995 - 19 November 1995

South Africa: Internal Development and External Relations

Chair: The Rt Hon The Lord Howe of Aberavon

It was seven years since Ditchley had last discussed South Africa, in very different circumstances. Our gathering now to celebrate and assess one of the late-twentieth-century’s most dramatically heartening transformations was distinguished by the attendance, in Deputy President F W de Klerk, of our first Nobel Peace Prize winner, accompanied by the National Chairman of the African National Congress (ANC) in a South African team whose numbers reflected generous support to the Foundation by British Airways.

The sequel to the great democratic leap was faring in many ways notably well - even surprisingly so, some hinted. Popular expectation of social and economic betterment for the majority had so far proved more patiently realistic than many commentators had feared; the recent local elections had seen participation at a level that was substantial (above that in the United States, a wry comment observed) and in a voting pattern by no means predictably monolithic; and economic reform had made considerable headway.

The pattern of the Government of National Unity (GNU) imposed by the special needs of transition - not truly a coalition, in the sense familiar elsewhere - would remain necessary for some time yet. A still-learning democracy could not easily have accommodated the stresses of oppositional politics, especially amid racial complications; and the fact - however disappointing - that fully non-racial parties had yet to emerge (the National Party, though no longer predominantly white in its support, had yet to establish any general appeal within the black community) meant that widely-representative involvement could be secured only by the special structure of the GNU, with fixed assignment of Cabinet portfolios. That produced occasional rigidities and inefficiencies, and some loosening might well be desirable. In addition, the system still lacked fully-effective checks and balances; poor media coverage was no help, but Parliament was gradually developing its use of scrutiny committees.

The future of the ANC was naturally of central importance in political evolution. A permanent majority in Government inescapably carried some risks, for example of lethargy and weak accountability. Given the ANC’s customary breadth of opinion and its special historic authority, however, fission was not to be expected either ideologically or around disputed leadership succession - the party’s clear traditions made the latter improbable. The reality of policy debate and evolution might well remain mostly on the intra-party stage.              

Discussions on the long-term constitution continued, we heard, with questions such as the relationships between President, Cabinet and Parliament recognised as needing new solutions. Bill-of-Rights matters were also in debate, with - as some participants warned - dangers of attempting too much through reaching over-ambitiously into individual-individual rather than just state-individual relationships,. Beyond all this lay the key question of whether to seek a unitary or a federal state - or, if the latter (as existing provincial realities might already dictate), with what sort of federalism.

That carried us inescapably to the wrenching issues of KwaZulu Natal and the Inkatha Freedom Party (IFP). Constitutional outcomes in which such crucial elements (the province had a quarter of the country’s population, and major economic assets) had not participated must lack anchorage and legitimacy; yet the IFP was proving acutely difficult to engage constructively both on the general constitutional issues and on those specially affecting KwaZulu Natal. We heard concerns expressed about the competent governance of the province, about the level of violence, and about whether it would dependably conform with human-rights standards acceptable to the rest of the nation. Both patience and renewed political attention and energy would be needed to bring to the table a tribally-oriented party leadership which adopted a highly assertive style even though its electoral predominance was far from overwhelming. If a genuine will to reach agreement (rather than just brandish grievance) was to be found and built upon, international involvement of credible provenance and quality should play an important part in exploration and mediation, provided that it could be brought to bear upon properly-identified issues. It might be, we conjectured, that the South African business sector could help discreetly by bringing home to key political figures the grave harm that would result both to the province and to South Africa if the image persisted internationally of a major component not using resources well, not hospitable to business and not reasonably reconciled within the nation.

We heard that reform in the nation’s public institutions presented a mixed picture. In the civil service, though understandable suspicion among the political majority had not vanished, the top echelons were generally serving the new leadership well; but perceptions were widespread of less alacrity and flexibility at middle levels. A separate problem - numerically indeed the most severe - was the inheritance of large mainly-black bureaucracies of low efficiency and unsuitable location, for example in the former “homelands”; the political difficulty, amid high unemployment, of shrinking these in line with government commitments was severe. Affirmative-action programmes remained essential in the near term, but many participants doubted whether they ought to be sustained long; healthy and fair balance required doors open to all. Wider training was a better dynamic than any use of quotas (though we heard suggestions that reasonable assessment of how ethnic balance was developing pointed to collecting objective and systematic data in ways not at present permitted).

We touched briefly on the re-shaping of the armed forces, where transitions delicate in economic and social terms had to be managed (not least to help in the reduction - needed throughout the region, not just in South Africa - of military expenditure). There were, we heard, no serious grounds for concern about ethnic imbalances, though data were imperfect. Sharper worries were however expressed about the police. Reform there, it was suggested, was both more urgent and less advanced; yet again, KwaZulu Natal might present particular difficulty. A trusted police force was made all the more necessary by the massive problems, notably in Johannesburg itself, of violent crime. We did not find time to discuss such social problems at any length, though we noted a vigorous plea for timely and action-oriented recognition of a massive threat from AIDS.

Similarly, we found too little room to discuss the problems of handling history; we could see that the “Truth Commission” faced grave dilemmas (as in other communities, like the ex-Communist states of Europe, emerging from a rejected past) between justice and reconciliation - between the unacceptability of ignoring intolerable actions that had scarred memories, and the corrosive risks of expending the nation’s energy and its stock of cooperative political goodwill in backward-looking ways.

In the economic field - the key ultimately to whether the new nation was seen as a success or failure - we recognised a massive challenge. Unemployment was around 40% on official figures, and even three percent real and stable annual growth in gross domestic product would not lower this. South Africa had to seek growth at the “Asian Tiger” level - at least five or six percent. To achieve that while maintaining social stability and perceived equity would be hugely testing. The market reforms to provide international credibility and competitiveness would be painful to many in the near term; so would the tight control of public spending and its firm prioritisation to the areas - especially education and training - crucial to economic advance. We heard that, while the road ahead was long, constructive work was in hand on privatisation.

Considerable emphasis was laid on the need - both economic and political - to increase the effective involvement of the black community in business leadership, especially in entrepreneurship. Opportunities were widening, but experience could not be manufactured instantly; there was constant need for help - which should at least as aptly come from the private sector, and perhaps from abroad, as from government - in the provision of training and of seed capital. The focus should perhaps be on small and medium enterprises; these were in any event likely to be crucial elements in economic growth on the scale required, and there was much international experience available on how best to foster them.

It was stressed that South Africa’s prime economic need from the international community was fair trade rather than specific aid. Protectionism at home and abroad was the enemy of growth, and its Northern-hemisphere manifestations often fell in sectors which hit South Africa particularly hard. South Africa’s own trade liberalisation was being driven forward resolutely, though a strong (over-strong?) currency still hampered exports. Discussion focused sharply on the exchange-control system; its abandonment would be uncomfortable in various immediate impacts, but many participants urged both that gradualism was not an option and that trade, inward fixed investment and the necessary re-shaping of South Africa’s conglomerate-centred industry to new structures better attuned to international standards could not advance until the plunge was taken. We had some sense of pushing at an open door, with only timing at issue.

Many of us saw the current pattern of the labour market as a serious handicap to progress. A country in South Africa’s position, with massive unemployment and facing the task of blending first-world and third- world conditions, desperately needed flexibility; yet the official market, buttressed by the Labour Relations Act, was among the world’s most rigid and regulated (with wage rates, it was said, double those of Poland) - a constant incentive towards capital-intensive rather than labour-intensive business design. Much in the Act, some participants suggested, was a particular reflection of a more general attitude which imperilled economic progress - a sense (from which even the social-democratic traditions of Northern Europe were now retreating) that personal benefits were to be demanded as entitlements from the state rather than paid for. We acknowledged both the theoretical social merits of the Act and the political unreality of looking for its abolition, but there was a widespread sense that relaxation should somehow be sought, for example by setting as high as possible the size-of-firm threshold above which its provisions applied. We could do no more than note in passing that immigration flows at volumes matched in few other countries heightened the problems of unemployment and so the need for a responsive labour market.

We were told of the work of the Reconstruction and Development Programme (RDP), a special drive managed from the centre of government to concentrate effort on key needs in the nation’s economic and social rebuilding. The concept was clearly a powerful one, though doubts were expressed both on whether its priorities were yet rigorously enough framed and on whether its centralised organisational pattern gave executive departments sufficient sense of real commitment to its chosen projects.

The emergence of South Africa from the shadows had set, besides all the domestic challenges, a further new agenda internationally. Regionally, South Africa had no option but to dominate - its GDP was many times that of its neighbours combined, and it was the only possible engine of regional growth. It could not bear all the burdens of Africa, and must reckon also with the sensitivities of neighbours; but it needed to formulate (more clearly and swiftly than it had yet done, some participants thought) a coherent vision to inform its policies - especially economic ones - in at least Southern Africa. South Africa could not durably prosper in a failing continent.

In the wider international scene South Africa faced opportunities which were also in some degree temptations. Its transformation imparted a special moral authority, a sense of role-model status in a world grappling with racial tensions; and the personal standing of its President gave added intensity to these effects. They were global assets, for example in the Commonwealth setting, which could not responsibly be set aside. At the same time, South Africa could not easily afford - amid the massive tasks confronting it domestically - a large-scale diversion of cabinet-level time, attention and energy to take up every worthy cause and sustain close dialogue with every United Nations member. Tough priority-setting was essential.

This theme of priority-setting - of making and sticking to hard choices that must inevitably relegate many admirable and even clamant objectives to the second rank - recurred throughout our discussions. As those discussions themselves at every turn exemplified, there was a massive fund of international admiration and goodwill for South Africa, a fund enhanced moreover by a sense of debt owed for the years (however justified) of ostracism. But our South African participants underlined their own sense that South Africa must first and foremost be, and be recognised as, a successful economy; and that only the South African people themselves could ensure this. The steps towards it were many and testing, and they could not be taken simultaneously or at the same pace. We recognised a special task for sustained leadership in choosing the right steps in the right order of concentration, and in communicating the necessity of the choices candidly yet persuasively to a majority whose proven patience would not cease to be needed. 

This Note reflects the Director's personal impressions of the conference. No participant is in any way committed to its content or expression.

Chairman: The Rt Hon The Lord Howe of Aberavon
(Formerly Secretary of State for Foreign and Commonwealth Affairs)


Mr Peter Cadbury
Deputy Chairman, Morgan Grenfell & Co Ltd
Mr Richard Dales, CMG
Lately British High Commissioner, Zimbabwe
Mr Michael Holman
Africa Editor, Financial Times
The Hon Robert Loder, CBE
Lately Chairman, Curtis Brown Group Ltd
Sir Robin Renwick, KCNG
Lately Ambassador to USA, formerly to South Africa
Professor Jack E Spence
Director of Studies, Royal Institute of International Affairs

The Rt Hon Joe Clark, PC, CC
Formerly Prime Minister of Canada
Mr J Clark Leith
Senior Policy Adviser, Bank of Botswana
The Hon Christine Stewart MP
Secretary of State for Latin America and Africa

Mr Steffen Smidt
Director-General for Development, European Commission

Monsieur Alain Azouaou
Deputy Director Southern Africa, Ministry of Foreign Affairs

Dr Martin Krämer
Executive Vice-Chairman, Africa Association

HE Mr FW de Klerk
Executive Deputy President of South Africa
Mrs Marike de Klerk
Lately Leader of Women’s Action, National Party
Mr Gert Grobler
Deputy High Commissioner, London
Professor Wilmot James
Executive Director, Institute for Democracy
Professor Sipho Maseko
Political Studies Department, University of the Western Cape
Mr Michael Spicer
Adviser to the Chairman, Anglo-American Corporation of South Africa
Mr David Steward
Head, Office of Deputy President de Klerk
Mr Richard Steyn
Lately Editor-in-Chief, Johannesburg Star
HE Mr Jacob Zuma
National Chairman, African National Congress

Ms Vivian L Derryck
President, The African-American Institute
Mr Frank E Ferrari
Senior Vice-President, The African-American Institute
Mr Wayne Fredericks
Formerly Deputy Assistant Secretary of State for African Affairs, State Department
Mr Lamond Godwin
Chairman, Peachtree Asset Management, Smith Barney Inc
Mr Jay Mazur
President, Union of Needletrades, Industrial and Textile Employees
Dr Robert I Rotberg
President, The World Peace Foundation
Dr Cedric L Suzman
Vice-President, The Southern Centre for International Studies