Thabo Mbeki’s ‘age of hope’

The government’s reaction to the heated national debate on crime is expected to be high on President Thabo Mbeki’s agenda during his State of the Nation address on Friday morning.

He is expected to announce the intensification of programmes across the board in justice-cluster portfolios, including justice, policing and prisons.

The crime debate was stirred up this week by the pulling by First National Bank of a media campaign to focus on fighting crime. Opposition parties have criticised the Mbeki government — and the ruling African National Congress — for putting pressure on the bank to postpone the campaign.

The Freedom Front Plus said in a statement on Thursday: ”With only two years remaining in his term in office, Mbeki could use the opening of Parliament … to be remembered as a statesman.

”That would entail that he is magnanimous enough to acknowledge the seriousness of the crime situation, announce new solutions for it as well as announce imaginative new steps to improve South Africa’s electricity and road infrastructure.”

In Mbeki’s speech during the opening of Parliament, set to start just after 11am, he is also expected to dwell on economic growth and pay particular attention to raising the level of gross fixed capital formation.

The speech is expected to be upbeat, including a focus on ”the age of hope”. Within this context, a consideration of strong consumer demand and the implications for the economy — including a growing current-account deficit — are likely to be pondered.

The president is also expected to consider the challenges posed by South Africa’s hosting of the 2010 World Cup, which will take place a year after his second and last term as president ends.

A review of the government’s delivery on the social welfare front is also likely and Mbeki could give some indication of a plan for an obligatory pension system for all, particularly one that looks after workers in the lower ranks who largely fall out of the social security net at present.

However, it is not expected that the government will do an about-turn on its opposition to a basic income grant, despite calls for it from its alliance partner, the Congress of South African Trade Unions.

Economic analysis

While a broad analysis of the state of the economy can be expected in the speech — which will include reference to stronger economic growth rates — Mbeki is expected to focus particularly on new investment in the mining industry, which has been lagging in recent years despite high commodity prices.

Significantly, De Beers and the Department of Minerals and Energy are expected to make an announcement later on Friday — expected to focus on investment and possible alterations to minerals legislation that may act as a bar to investment.

The government’s aim is to ensure that that the rate of 25% gross fixed capital formation — as a component of GDP — is achieved by the target date of 2014.

A comparison with countries such as South Korea and Australia can be expected in assessing South Africa’s investment strengths and weaknesses. It has been pointed out that in the 1960s and much of the 1970s, South Africa had been in a similar position as these two countries — with gross fixed capital formation at about 25%.

Since then, South Africa’s gross fixed capital formation — the addition to a country’s fixed capital stock during a specific period before provision for depreciation — has begun to slip to about 14% to 15%.

Performance

Meanwhile, seven out of 10 South Africans are happy with Mbeki’s performance, marketing survey company Markinor revealed on Thursday.

Mbeki is trusted by many poor, black people, the principle beneficiaries of his anti-poverty drive, South African Broadcasting Corporation news reported.

According to the Markinor report, land, crime and unemployment are still a major concern.

However, close to 600 000 jobs were created last year and unemployment is down to about 26%. The R370-billion infrastructure investment plan could bring it down even further, the report added.

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