The Presidential Years

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These are important questions and I’m happy you’ve given us the opportunity to deal with them. The first question is what are we doing about job creation? And before I answer the question

I would like to place the question of unemployment in context because it would be a mistake to think that the question of joblessness has just dropped from the skies, that there is no history. We all know that in the decade leading up to April 1994, R51,1 billion left the country as a result of political uncertainty. Secondly, the economic growth of the country, the rate of growth was negative. And there was high inflation which was in two digits; also the budget deficit was in two digits. But what was even more shattering was the discovery when we took over that this country had a public debt of no less than R254-billion which we are now paying at the rate of R50 billion a year. That is R50 billion which we do not have in order to create jobs and to reduce the rate of unemployment. That is the background to this issue. Now it is not very easy to deal with because one of the major decisions we took when we took over as the government was to reduce the rate of inflation, to reduce the budget deficit and we have succeeded enormously in that regard. [APPLAUSE] But to reduce the rate of inflation and the budget deficit meant that there should be a drastic cut in government expenditure and we took that decision. And we are ruthless in making sure that we cut down government expenditure, bring down the rate of inflation as well as the budget deficit. From an inflation which was in two digits when we took over, about 13% we were able to reduce it to between four and five percent. Unfortunately what happened in Asia, Russia and Brazil affected our plans but we were also able to reduce the budget deficit from two figures to about 4% when the Asian flu broke out. That affected our currency because today the economies of the world are so interdependent that what happens in Scotland has an effect on South Africa the same day. The economies of the world as a result of the process of globalisation have become interdependent. So we were affected by all these issues. And we therefore inherited a situation whereby there was huge unemployment in this country, we did not have and do not have the resources to address that unemployment. Because whereas we are able to go to the United Nations at a time when we owed more than $100 million in the form of arrears for membership, which the apartheid government did not pay when it was suspended, we were called upon to pay that debt. I had to go to the United Nations and to speak to Clinton, Boris Yeltsin, Jacques Chiraq and others, Jiang Zemin and to ask them to write off this debt. Which they did. [APPLAUSE]

I then came back to my country confident that now that I have got this arrears debt written off, I’m going to get this R254 billion written off and I asked the Minister of Finance to give me a breakdown of this debt. I nearly fell on my back when I was given these particulars. More than 90% of this debt we owed to our workers here. What the apartheid regime did was to take pension funds and to support, to enrich themselves out of those pension funds. We could not write off that debt because if we wrote off that debt, a government which rights off a debt which it owes to its workers, we would lose all credibility. So we have no alternative but to pay that debt. Now, we do not have therefore the resources to address the question of unemployment. But I would expect you, not only to ask a question but to make suggestions as to how we solve problems.

Original Source

SABC Archive, SABC Information Library, Johannesburg.

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