Mbeki: Bid to bridge divide

2003-08-22 22:08

Cape Town - Bold steps are required to bridge the divide between South Africa's so-called "first world economy" and its "third world economy", President Thabo Mbeki said on Friday.

Writing in the African National Congress' online publication, ANC Today, he said the former - the modern industrial, mining, agricultural, financial, and services sector of the economy - became ever more integrated in the global economy every day.

Many of the major interventions made by government over the years sought to address this first world economy, to ensure it developed in the right direction, at the right pace.

"It is clear that this sector of our economy has responded and continues to respond very well to all these interventions.

"This is very important because it is this sector of our economy that produces the wealth we need to address the many challenges we face as a country," he said.

Central among these, was the urgent challenge of poverty that continued to afflict millions of South Africans.

A stronger first world economy also helped reduce the racial and gender inequalities in standards of living and quality of life, that continued to characterise the country.

Mbeki said it was sometimes argued that higher rates of economic growth - of six percent and above - would, on their own, reduce unemployment.

Trickle-down effect

This was part of a proposition about an automatic so-called trickle-down effect that would allegedly impact on the country's third world economy as a result of a stronger first world economy.

"None of this is true. The reality is that those who would be affected positively, as projected by these theories, would be those who, essentially because of their skills, can be defined as already belonging to the first world economy," he said.

Therefore, the challenge was to devise and implement a strategy to intervene in the third world economy, and not assume that the interventions made regarding the first world economy were necessarily relevant to the former.

"The purpose of our actions to impact on the 'third world economy' must be so to transform this economy so that we end its underdevelopment and marginalisation.

"Thus we will be able to attend to the challenge of poverty eradication in a sustainable manner, while developing the 'third world economy' so that it becomes part of the 'first world economy'."

Resource transfers were needed to enable the third world economy to break out of its underdevelopment.

These resources included education and training, capital for business development and the construction of the necessary social and economic infrastructure, marketing information and appropriate technology, and the ways and means to ensure higher levels of safety and security for both persons and property.

"The nature and scale of the challenge we face requires that we approach this matter boldly, vigorously, and in a sustained manner," Mbeki said.

- SAPA