In a major adjustment to the economic policy of the ruling African National Congress, President Thabo Mbeki admitted in an interview yesterday that labour laws initiated by his predecessor and mentor, Mr Nelson Mandela, had imposed "unreasonable burdens" on small businesses.
By implication, they had impeded the vital task of job creation, he said. His admission came during an interview with the Sunday Times, South Africa's largest weekly, after he had delivered his state-of-the-nation address to mark the reopening of parliament on Friday.
"The burdens placed on small businessmen to comply with some of these provisions [in the labour laws] are quite unreasonable," Mr Mbeki told the Sunday Times. "Some people might have all their revenue swallowed up by hiring a lawyer. . . Yet if they don't [comply] they will be in violation of the law".
President Mbeki set the scene during his speech for a major advance of his quest to free the South African economy from the constraints prescribed by the socialist ideology once espoused by the ruling ANC and from the financial controls introduced by the previous white government.
Apart from pending amendments to labour laws, President Mbeki announced initiatives to boost South Africa's attractiveness to foreign investors and foreshadowed moves to further loosen the stringent foreign exchange controls introduced by the former president, Mr P.W. Botha, in a desperate bid to prolong white hegemony.
In a gesture which would have been unthinkable only a few years ago, Mr Mbeki, a former member of the central committee of the South African Communist Party, approvingly quoted Mr Julian Ogilvie Thompson, an archetypal capitalist and chairman of South Africa's largest corporation, Anglo American.
Mr Ogilvie Thompson predicted last November that foreign investors would "increasingly share our assessment that South Africa is one of the most attractive emerging markets".
Mr Mbeki went on to announce the formation of an International Investment Council, whose members had agreed to serve as an indication of their "firm and unwavering" confidence in the South African economy. Financial luminaries on it included Mr George Soros, chairman of the Soros Fund Management, Mr Tony O'Reilly of Independent Newspapers of Ireland and Mr Jurgen Schrempp of Daimler-Chrysler.
On foreign exchange control, Mr Mbeki recalled that ANC policy had long aimed at working "continuously towards the removal of foreign exchange controls inherited from the apartheid regime". The ANC had, accordingly, "removed all foreign exchange controls with regard to foreigners".
The remaining controls, related only to South Africans, would be addressed by the Finance Minister, Mr Trevor Manuel, when he delivered his budget to parliament in less than three weeks.
Mr Mbeki took a strong line against undisciplined shop stewards, singling out those at a major motor-manufacturing plant in the Eastern Cape who led workers on an unlawful strike against the national leadership of the National Union of Metalworkers of South Africa.
Mr Mbeki predicted a major surge in South Africa's growth rate in 2000 and 2001.