A chance to save Mandela’s vision - John Endres

The following is an address delivered by IRR CEO Dr John Endres to the Harvard Club in New York City today.

Ladies and gentlemen, welcome. I am honoured to speak to you today. My name is John Endres and I head the South African Institute of Race Relations, South Africa’s oldest public policy think tank.

Today I want to talk to you about my country, South Africa. A national election in May of this year has given our politics a shake-up.

Perhaps our country will move on to a more promising development path than the one it has been on for the past decade. And perhaps – so we hope – it will be able to realise the dream Nelson Mandela formulated for South Africa in 1994.

To explain what’s going on, I will first say a few words about my organisation, the South African Institute of Race Relations. Then I will take you through a brief history of the two ages of South Africa since 1994. I will close by giving our view on what South Africa’s third age might hold.

Let me start with the South African Institute of Race Relations. At the time of its founding in 1929, race relations in the newly created South Africa had already trod a precarious path.

After nearly three centuries of flowing ebbs and tides of regional power struggles, it had become clear to the founders of the Institute that race relations in this newly created country would define the success or failure of the young country, South Africa.

If freedom was to become a reality for the people of South Africa; if prosperity was to replace poverty and exploitation; if cooperation was to replace conflict; then the classical liberal principles of equality before the law, the primacy of individual freedom, non-racialism and dignity, as well as respect for property rights and freedom of speech, association, and enterprise would need a champion in the 20^th century and beyond.

I am proud to say that the Institute I lead has been that champion now for close to a century.

Ninety-five years ago, the Institute started doing what was almost unthinkable on the African continent at the time: making the case, morally, politically, and economically, that the shared humanity of individuals matters more than skin colour.

At that time, sixty-five years before the democratic transition that closed South Africa’s apartheid chapter, the possibility that such a non-racial belief could take hold was not even remote – it was inconceivable.

To say in a then-colonial African country about to be beset by apartheid that black lives really do matter was radical and courageous.

This same steadfast belief in non-racialism similarly emboldened the Institute to proclaim that every person had the right to life, liberty, and the pursuit of happiness, irrespective of skin colour or ethnicity.

To hold the line on non-racialism, under attack from the left and the right at various times across the last ninety-five years, has been the toil and privilege of the Institute of Race Relations.

• When, in 1946, just two years before the election that saw the National Party take control of government and implement apartheid, the Fagan Commission was tasked by Prime Minister Jan Smuts with investigating the issue of racial segregation, it was the Institute of Race Relations that led the fight against segregation. 

• When apartheid started to be introduced from 1948, it cynically placed educational achievement beyond the reach of most black South Africans. The IRR’s bursary programme stepped in to help empower thousands of students – among them an aspirant lawyer by the name of Nelson Rolihlahla Mandela. 

• When Nelson Mandela stood to answer the treason case against him in 1964, it was the Institute’s data that he used to argue that the system of apartheid should be on trial for its socio-economic injustices. 

• As apartheid dragged on into the 1960s, 1970s, and 1980s, political pressure building slowly, it was the Institute of Race Relations that laboured day after day to unearth, record, and expose the human cost of South Africa’s institutional racism. 

In 1994, when the first democratic elections elevated Nelson Mandela to the presidency, we were asked from all sides: when are you closing your doors? The fight for non-racialism, we were told, had been won. It was South Africa’s own “end of history”.

But, thank God for my predecessor, the late, great John Kane-Berman, who saw that the cause of liberty for all people is never fully won and only ever one generation away from failing.

As a result of John Kane-Berman’s foresight, the Institute has remained at the forefront of tracking South Africa’s development and tirelessly making the argument for the values that will help make South Africa free and prosperous.

That brings us to the topic of the day: South Africa’s current state, how it got here, and where it might go next.

To understand how and why we got from the promise of 1994 to the hope of renewing that promise in 2024, and where South Africa’s future might lead us, we must look at the two ages of governance and policy that have played out since that historic election of April 1994.

The first age lasted from 1994 to 2007. The second age started around 2008 and we are now at the tail end of it. The two ages reveal themselves clearly in South Africa's development indicators. I will describe for you some of those development indicators and will then speak about what lies ahead for South Africa as it moves out of the second age and into its third age.

South Africa’s first age, from 1994 to 2007, was marked by considerable progress across a range of indicators. GDP grew at an average rate of 3.6%. The number of people with jobs increased from 8 million to 14 million, and the average GDP per capita increased by almost 40%, from $10,300 per year to $14,200 per year in real terms, after adjusting for inflation.

During this period, 12 formal houses were built for each informal house that went up, as the government started rolling out a massive catch-up programme to bring services to those who had been denied them.

At the same time, the government managed its finances responsibly, halving the public debt from 50% of GDP to 25% of GDP. At the end of the first age, the government even posted two budget surpluses, something that had never happened in the history of the country.

The numbers for the period 2008 to 2022 look very different. The average GDP growth rate was a lacklustre 1.2%, a mere third of that achieved in the first age. By 2023, GDP per capita had increased by only $100, to $14,300 – almost unchanged in a decade and a half. Instead of balancing income and expenditure, the government incurred deep deficits each year, tripling debt to GDP to 75%.

The number of people with jobs increased by barely a million during this time, while the population grew by 10 million. The unemployment rate crept up and now sits at an astonishing 32.1% (up from 22.6% in 2008), or 41.9% (29.5%) on the expanded definition that includes discouraged job seekers. Even these bleak employment numbers are generously assessed, as they include both formal and informal employment.

Business indicators show a similarly stark divide. The RMB/BER business confidence index registered above the confidence-indicating 50 mark in seven out of 14 years of the first age, on a rising trend, but has been below 50 – showing lacking confidence – every single year since 2008. The latest reading, for the third quarter of 2024, is at 38 points.

Fixed investment is far below where it needs to be. The key indicator, gross fixed capital formation as a share of GDP, which had risen during the first age, reaching a level of 21.6% in 2008, declined in the second age, dropping to as low as 13.1% in 2022. The latest reading is 15.2% for 2023. This global average for this important number is 26%. It should be even higher for an emerging market like South Africa, and the government’s own 2012 National Development Plan specified a target of 30%.

The lack of investment by the private and the public sector has started affecting the infrastructure that forms the backbone of the country’s economic activity. Dramatic deterioration is being recorded in road, rail, ports and water infrastructure, although the sector that attracted the greatest attention over the past decade was electricity generation.

While the total amount of electricity produced per year increased by 49% in the first age, it dropped by almost 18% in the second age. As a result, Eskom, the state-owned power company, started introducing rolling blackouts known as “load-shedding” in 2007. This escalated up to 2023, but since the beginning of 2024 the situation has stabilised and the country has been load-shedding free – an unusual feeling for many South Africans, who hope that it will last.

With that, let me turn to South Africa’s future prospects – the third age.

As you’ve seen, South Africa’s first age, from 1994 to 2007, was marked by positive economic growth, job creation and an improvement in many social indicators. The second age, from 2008 to the present, saw low growth, little job creation and a worsening of many social indicators.

What will the third age bring? That really depends on the question of economic growth. If higher rates of growth are achieved, a bright future lies ahead for the country. If not, South Africa’s people will continue to become poorer. It is as simple as that.

A lack of sufficient growth will also make it harder to preserve South Africa’s democracy and fulfil Nelson Mandela’s vision, as desperate voters are more easily enticed by reckless political promises.

Will South Africa get the growth it needs?

The 2024 election brought about an important political change in South Africa. The African National Congress had won outright majorities in all the elections since 1994, enjoying comfortable support levels as high as 69.7% in the 2004 election. By 2019, that had declined to 57%; but in 2024, it dropped to 40%.

Rather than forming a minority government, the ANC opted for a grand coalition. This coalition, referred to as the Government of National Unity or GNU, currently comprises no fewer than ten parties, including the former official opposition, the Democratic Alliance, which obtained 22% of the vote in the 2024 election. The GNU parties jointly control 287 of the 400 seats in the National Assembly.

The notable exclusions from the GNU were the revolutionary populist parties: the Marxist Economic Freedom Fighters or EFF, and Jacob Zuma’s incursionist party, uMkhonto weSizwe or MK.

The ANC’s choice of partners signalled a move towards pragmatism instead of revolution. It is a move that enjoys high levels of support among the populace, with our most recent polling showing 63% of respondents preferring the GNU constellation over the previous ANC-only government. Participants also preferred the pragmatic ANC-DA coalition over a hypothetical ANC-EFF or ANC-MK coalition by a two-to-one margin (52% to 27%).

Most respondents in our surveys favour pro-growth policies over redistributive policies. So the new government has public support on its side and all the elements are in place for a positive outcome.

However, with the first 100 days of the new administration having passed, we are concerned about a lack of urgency on the part of the GNU in pursuing economic growth. Leading officials from the president to the finance minister and the leader of the Democratic Alliance, who is now the minister for agriculture, have all emphasised the need for economic growth in speeches and statements.

But so far, concrete action has been lacking. Our concern is that the pragmatic constellation of South Africa’s politics will not be sustained in the absence of tangible improvements in the living conditions of ordinary South Africans, which require economic growth to be brought about. If the GNU fails in this task, then the revolutionary, anti-constitutional parties will have a chance to discredit the experiment in pragmatism and offer themselves as an alternative.

If this happens, it will also strengthen South Africa’s ties with closed, authoritarian societies such as Iran, China, and Russia – a prospect that is not in the US interest because of the strategic foothold it will grant these powers on the African continent.

South Africa occupies a key position on the maritime route linking the Indian Ocean to the southern Atlantic, a fact of which China and Russia are very much aware. It is also Africa’s economic superpower and whether democracy succeeds or fails there will have a strong signalling effect to other African countries and the rest of the world.

So the stakes are high. The Institute is at the frontline of this battle over the future of South Africa and is working – as it has for the past 95 years – to identify and promote the ideas that will make the country free and prosperous, as Nelson Mandela had intended.

We will give everything we have to achieve this ideal. If you believe, like we do, that Mandela's dream deserves a champion, I ask that you support us as that champion. Our history, commitment, work, and insights speak for themselves − but they cannot always pay for themselves. America's claim to exceptionalism, whatever criticism might be aimed at you, is that this is a nation founded on the idea of liberty.

The idea of liberty − that is what Mandela's vision comes down to. It needs people willing to speak up, stand up, and step up with solutions that address the core of what South Africa can be. If you believe, like I believe, that a nation's character flows from the ideas within it, strengthen us as we work every day to make manifest the idea of Mandela's vision for my country.