The MJ Naidoo Foundation for Social Justice Hosted a discussion forum titled “the Current challenges and opportunities in building democracy in South Africa and Region”

This Forum was hosted in collaboration with the University of Kwa Zulu Natal (UKZN) and held on the 16th June 2008. Four schools in Durban were invited to make a presentation providing a perspective from young people to the Forum. The Following presentations were delivered

Invitation to the MJ Naidoo Social Justice Foundation Forum for Public Debate

The MJ Naidoo Social Justice Foundation, Invites you to attend a Forum for Public Debate on the “current challenges and opportunities for democracy in South Africa and the Region”. The event will take place on the 16 June 2008 at the University of KwaZulu Natal (Westville), T Block Lecture Theatre. The Foundation will also launch its Social Justice Blog at the event.

The MJ Naidoo Foundation was established on the 16 June 2007, in tribute to MJ Naidoo, whose ideals of non-violence, racial equality, and peace have served to inspire generations of social activists.

The Foundation will host the first of many forums, on the 16 June 2008, to encourage debate on building democracy in South Africa. This event will invite individuals and organizations with a keen interest in social justice and who demonstrate and contribute to the spirit of humanity in our society to become part of the activities of the Foundation and contribute to the debates that will be hosted, both physically and through the Social Justice Blog,(www.socialjustice.org.za) which will be launched on the 16 June 2008.

This event will include inputs from youth of four different schools, which will be followed by presentations from political commentators, from within and outside of government, who will respond to the issues raised by the youth.

For more information about the event download the official Invitation.

Written by Jayendra Naidoo

South Africa’s actions and interventions around Zimbabwe’s election will have a crucial influence on the developments there. While many question the role of South Africa and its right to intervene, the real question is whether we can afford not to intervene.

Zimbabwe stands on the edge of an election outcome leading either to a democratic change or a political disaster. While the stakes are undoubtedly high for Zimbabwe, South Africans with other pressing challenges such as electricity shortages, unemployment, crime, and AIDS, will inevitably ask why Zimbabwe should be given priority.

Social and political organizations should operate upon principles of social justice and human rights. This allows strong moral stands to be taken regardless of economic interests. However, calculating the financial costs and benefits of the challenges we face helps measure relative priorities, and provides guidance on what amount of resources can be ‘invested’ to resolve an issue.

Using public data, Macquarie First South’s economists have ‘run the numbers’ on Zimbabwe’s effect on the SA economy. The question South Africa must ask is whether the current SA Government policy of ‘quiet diplomacy’ is an appropriate response, or should we rather be ‘investing’ in a stronger approach to ensure a successful democratic election outcome and the restoration of the Zimbabwean economy?

The effect on South Africa’s GDP

SA Reserve Bank data shows that the combined GDP of South Africa and Zimbabwe in 1994 was USD143bn, with Zimbabwe’s share being about 5 percent. After experiencing steady growth through most of the ‘90’s, Zimbabwe’s economy has since 1998 deteriorated to the extent that today it is the world’s fastest shrinking economy with the world’s highest inflation rate. By 2007, the combined size of SA’s and Zimbabwe’s economies had doubled to USD283bn, but Zimbabwe’s economy accounted for just 0,2% of the total.

The Zimbabwean economy today is 40% smaller than it was in 1999. If it had maintained its pre 2000 growth rate, its GDP would be at least USD7bn larger than it currently is. South Africa is Zimbabwe’s largest trading partner, supplying 40% of its imports and receiving 25% of its exports. It is estimated that our share of ‘lost’ exports from South Africa to Zimbabwe is approximately USD2,8bn (R22bn).

Furthermore, perceived political risk due to the Zimbabwean political crisis has a big impact on South Africa, especially taking account of our current account deficit and the tough current global financial environment. International negative sentiment on Zimbabwe hurts South Africa as investors in SA bonds and equities calculate the negative consequences on SA in terms of employment, growth and our own social stability.

In 2001, the initial wave of negative sentiment on Zimbabwe coincided with a 3% increase in South Africa’s cost of borrowing foreign currency. Macquarie Research estimates that in the current global environment a meltdown in Zimbabwe could weaken the rand by as much as 20% percent. This would push interest rates up by at least 2%. This raises the borrowing and investment costs of public and private companies, and hits consumers in the form of higher transport costs, electricity costs, house rentals or mortgages, and higher cost of goods generally. This would equate to a total cost to South Africa of USD3,2bn (R24bn).

Add to this the loss of SA exports to Zimbabwe, and this results in a total loss in GDP to our economy of USD6bn (R46bn) in the current year. Of course the cumulative effect over the past seven years is larger, and if the crisis continues for years ahead the costs will continue to grow.

Conversely, in the context of a successful transition in Zimbabwe, positive sentiment would strengthen the rand and result in a reduced cost of borrowing. Another way of looking at it is that taking action to restore the Zimbabwean economy will potentially add 2% to our economy – a not insignificant number.

The effect on employment patterns

Zimbabwe’s crisis is not just a lost opportunity in terms of GDP, but in addition is currently a huge direct cost to South Africa! Formerly a food exporter, Zimbabwe is now an exporter of poverty and refugees. An estimated 3,5 million Zimbabweans are in South Africa, most working “illegally” in SA homes, restaurants and the construction sector. At the same time, there are about 4 million unemployed South Africans who are actively looking for jobs.

If the Zimbabwean economy began functioning normally and started to create job opportunities again, many would return and find jobs there. Assuming that only a third of the jobs currently held by Zimbabweans are taken by South Africans after democracy is re-established in Zimbabwe, unemployment in South African would drop from the current 23% to around 16%.

That translates into more income per average South African household, plus additional savings in unemployment benefits currently being paid, and a decrease in remittances sent to Zimbabwe saving South Africa additional foreign exchange.

According to the SA Reserve Bank, the average total compensation for a SA employee (taking into account a labour force of 17 million people) is about R49 000 pa, or R4 000 pm. Assuming that the average Zimbabwean employed in SA earns even half of this, the direct effect of 1,2 million more South Africans being employed in those jobs would be about USD3,9bn (R30bn). Each average SA household would be roughly R3000 better off each year!

Still more costs …

There are still other costs. Zimbabwean food production has fallen 40 percent since 2000 and the UN’s World Food Programme estimates that 2,6m Zimbabweans need food aid in 2008. Zimbabwe has lost major tourism revenues, foreign direct investment has dropped to less than 10% of its pre-2000 levels to USD30m, and SA suppliers have lost millions as a result of non-payment from Zimbabwean companies. The valuable Zimbabwean mining and agricultural sectors have lost out on the high prices for commodities due to dramatic falls in their output.

South Africa’s top challenge

Zimbabwe stands out as a high value challenge and opportunity for South Africa. The costs or gains of getting it wrong are high. As are the gains of getting it right. If South Africa was a company, the shareholders of SA Inc would link the bonus of the top executive management to resurrecting Zimbabwe and helping get it on the right path.

Weak action on South Africa’s part now is in itself an “action” and a choice. Zimbabwe cannot afford to miss this critical chance for change. But we in South Africa cannot afford to miss this opportunity either!

(Jayendra Naidoo is the Executive Chairman of the J&J Group, writing in his personal capacity)
Jayendra Naidoo is currently Executive Chairman of the J&J Group, a diversified investment company with interests inter alia in Investment Banking, Telecoms, Transport and Energy.

He was a trade union leader from the early 1980’s, and served as COSATU Negotiations Co-ordinator in the early 1990’s. From 1995 he served as the first Executive Director of the National Economic Development and Labour Council (NEDLAC), the body through which Government, Business, Labour and Community Organisations negotiated on social and economic policy and legislation

Written by Jay Naidoo

Primrose refugee camp is filled with hundreds of men, women and children who like millions of others came to South Africa looking for a better life. For many, their dream of our miracle nation lies in ashes of burned homes. Meeting these refugees brought back memories of the deadly violence in the early 1990s that claimed so many lives in our contest against the apartheid state. The bitter irony is that this time it has happened on OUR WATCH.

Not far from where I visited lies the site of the “flaming man” which became the symbol of a violent madness that has swept our country. He had a name and an identity - Ernesto Alfabeto Nhumuave. A father, a brother and a husband arriving from Mozambique three months ago full of hope that Jo’burg, ‘the city of gold’, would give him the opportunity to put bread on the table for his children.

Every democratic South African has been shocked by the scale of the brutality and hatred that raised its head so ruthlessly. The events of the past few weeks have affected the lives of real people in ways we haven’t even begun to fully understand. The question on all our minds is why? Why, when our neighbours have sheltered tens of thousands of political refugees including many of our present leadership? Why would many South Africans turn on our African brothers and sisters?

We have failed as leaders in the community, in organisations, NGO’s, as Government and as society by not responding to the early warnings we had on this catastrophe. The reality still hidden from our sight as it was under apartheid is that absolute poverty has almost half of our population in its deathly embrace. Alexandra and Ramaphosa informal settlement are all areas blighted by overcrowding, joblessness, crime and a fierce competition for scarce resources.

Several reports released this year alone attest to the alarming levels of poverty; deprivation; and lack of adequate health systems, infrastructure and interventions to deal with HIV and AIDS in South Africa. It is clear we will not meet some key global MDG targets and those we have set as a society. The reasons are complex and there is no quick fix solution. Although, part of the solution does lie in us acknowledging that we have a problem.

In this environment, especially with the collapse of community structures in many areas that were the backbone of our struggle for freedom, a vacuum was created into which opportunistic elements were quick to step in. Added to this, is our collective failure to act sufficiently on the economic and political meltdown in Zimbabwe, which has exported its own set of challenges to South Africa. The world, including us, stood by while a third of Zimbabwe’s population of 12 million fled the destruction in their country. An estimated three million of these crossed our porous borders and flocked to our cities, aggravating an urban infrastructure already strained by the internal migration of millions of South Africans fleeing the poverty of our rural areas.

The consequence was a deadly cocktail of communities restless and frustrated by slow delivery; angry at legitimate problems and combined with opportunism, which swept into the dustbin our country’s human rights culture and international reputation.

This is a national disaster. Let us have a comprehensive response. The social and economic cost of not taking the right actions is too ghastly to contemplate. Let us acknowledge the status of the foreign nationals who are genuine refugees that are here and work with the UN and those organisations and institutions both in the non-governmental and public sector that allows us to respond more effectively to the crisis. And let us not send the wrong message that South Africa is hostile and closed to the people from the region and the rest of the world. And let us not forget that hundreds of thousands of South Africans work, live and invest in the region and overseas.

We cannot deny that our people have the right to demand their economic and social rights – enshrined by our Constitution.

This is our wake up call as a nation. Our “rainbow nation” is skin deep and it does not take much to burst the festering tensions of ethnicity or xenophobia. Let us, at every level of society, from religious to political, from community to Government, from media to sports leaders, to every individual SA citizen acknowledge our mistakes and resolve to find solutions. Our fragile nation requires sincerity and not grandstanding.

We must also acknowledge that a climate of heightened political tension – soiled by violence, which has disrupted the social fabric of our communities, requires us all to conduct ourselves in a sensible, responsible manner. Any loose comments can stoke the fire of the conflict. This applies to all of us - our political leaders, community organisations, social movements, and the media.

As a priority we must help further to ensure a smooth and democratic run off election in Zimbabwe. We should further help, together with SADC, that there are tens of thousands of peace monitors for the 9300 polling stations to ensure a free and fair election. There should be crystal clarity on this point. A free and fair election and a smooth transition are imperative for the peaceful return of millions of Zimbabweans fleeing the economic and political meltdown in Zimbabwe. Then we must work hard to integrate the genuine asylum seekers, refugees and permanent residents into our communities.

It has been inspiring to witness the massive outpouring of support by so many of our people – many of whom have expressed solidarity and opened their hearts. On our part, the DBSA, together with the IDC has contributed R20m to immediate humanitarian assistance and will dispatch Senior Executives and project managers to work with local governments and NGO’s towards integrated sustainable community development. We need to build on this momentum and need our leaders to take more and bolder actions.

As I think of Nora Machava (7) the innocent wide-eyed girl child that I met a few days ago at Primrose refugee camp, who is terrified of her future, I am reminded of the wisdom of President Mandela at the inauguration of our new democracy: “Never, never and never again shall it be that this beautiful land will again experience the oppression of one by another and suffer the indignity of being the skunk of the world”.

Jay Naidoo
Chairman of DBSA and the J&J Group Development Trust