Remarks by Ambassador Patrick H. Gaspard (As Delivered)
University of South Africa
Pretoria, South Africa
Professor, thank you so very much for that warm and kind introduction. Vice Chancellor, thank you so much for your very important words. I’d like to commend the work that you’re doing each and every single day to lift up electoral reforms and democracy here in Africa – democracy is certainly on the march on this continent and it’s due in no small part to the important contribution that UNISA makes.
And professor, I was completely unaware of our sporting past, and unaware of the incident around the war with Mexico, though regrettably I’ve been too acutely aware of a darker bit of transaction between the United States and South Africa.
At some point I was privileged to come across some documents that memorialize an exchange that took place between officials here in Pretoria and officials in the state of Mississippi during the height of segregation in Mississippi and at a time when officials here were working on perfecting the scourge of apartheid. There was an exchange around the implementation of race-based codes, and I have to tell you, given that history I was terribly proud decades later, in the late Eighties to be part of a generation of Americans that put our shoulders to the wheel to try to bring down apartheid and to later come here two decades ago to participate in exchanges to support this nascent democracy. So an interesting history, a colorful history, sometimes a tortured one but one that we learn from together and move forward together in unison.
So thank you to IDG, thank you to UNISA for letting me come here today to talk about the nature of the bilateral relationship between South Africa and the United States. And I’d like to, in addition to acknowledging the University, also I’d like to acknowledge some of my colleagues in the diplomatic corps who were kind enough to come here this morning.
Since this institution is a pioneer in distance learning it seems altogether appropriate that I would have this conversation from your grounds after only being in the country for a mere five months. While I’ve traversed much of South Africa from Polokwane to the Cape of Good Hope, there is still so much more to see and grasp and it will be entirely impossible to cover the extent of it in the terms of my service. I will have to trust in some intimate observations made at close range and some that are made at a hazy distance – and I will also have to depend on the corrections of some of my friends who are here today. It’s truly distance learning at its best.
And let me hasten on the onset to add two terribly important flags in advance of all else that follows in this dialogue today. I would like to immediately side with those who might argue that the totality of my knowledge about the country after a mere five months can fit into a thimble. And I will offer that all of my insights are filtered through an American interest. I’ve already learned that in politics one should always try to establish a predicate and get out ahead of your critics. So let’s put both those things on the table about my knowledge and the prism of my interest.
That being laid bare, even water from a thimble can contribute to irrigation in the field of ideas, and increasingly Americans recognize interdependence and mutual opportunity that is a growing feature of this bilateral relationship.
I am an American, but I too am an African. And today it feels quite good to be an American in Africa.
As I considered these remarks and my principle focus on our common challenges and opportunities, I was reminded again how much we share, particularly in strong democratic ideals and institutions. Both of our Presidents delivered their State of the Nation addresses within weeks of one another. Both Presidents identified three key areas crucial to the success of our republics: health, education and jobs. The last of these will comprise our central engagement this morning
Fundamentally, jobs, trade and economic policy are drivers of these other metrics and will be the prism through which leaders on both sides of the Atlantic will assess the success of the relationship between the United States and South Africa in the first half of this century. Presidents Obama and Zuma also both dwelled on the crisis in economic inequality and the emergency obligation of both of our societies to close that deepening divide.
As a subdivision of the economic discussion, the state of labor relations is a key determinant and one that I believe I’m modestly credentialed to be able to speak to with some passing credibility. I dedicated the bulk of my mature activism to the goal of improving the lives of workers both on the shop floor and in their communities. I’ve been on the frontlines of demonstrations that have devolved into near riots, strikes that have been protracted and that have exacted a toll from workers and employers alike. I have counted up the cost.
I have counted up the cost.
I know something of the difference between tactical tools in a labor dispute and a shared economic strategy that benefits both industry and the workforce. I’ll offer up my American experiences with humility and with the full appreciation of a different landscape and context here in South Africa as this modern democracy and economy rounds out its twentieth anniversary.
But, first some brief and somewhat celebratory markers on our partnership on health and on education. You might have heard a little bit of news and debate in the last few years in the United States over something called the Affordable Health Care Act, better known as “Obamacare.” I attribute the gray hairs sneaking in around my temples to the modest role that I played in the passage of that landmark legislation.
The law is about making sure Americans receive the health care that we all deserve, regardless of pre-existing conditions and income. Even in my relatively wealthy country, there are Americans who struggle and grapple with high costs and that level of access each and every day.
South Africans have had to contend with much of these same issues and difficulties, while also addressing the inequities of apartheid and coping with an AIDS pandemic that would stretch the bounds of any healthcare infrastructure.
Since the early days of the crisis, the U.S. through our bipartisan PEPFAR program has invested over $4.7 billion in the last decade, partnering with South Africa to combat HIV and AIDS. And clearly the tide is turning. Under the leadership of Health Minister Motsoaledi, the South African Government has put more individuals on anti-retrovirals/ARVs—2.4 million South Africans—than any other nation, and reduced mother-to-child transmission to 3% when it had formerly been over 30%.
South Africa is the first country in the world taking over the care and treatment programs PEPFAR previously provided. That is an incredibly important point of inflection, one that needs to be noted on the tenth anniversary of PEPFAR and one that really needs to be leaned into and celebrated on both sides of the Atlantic.
I know that those of us gathered here in the largest school in Africa will concur with Minister Trevor Manuel’s claim that “If we change the quality of education, young people will be more employable, they will be skilled to start businesses and that is a starting point for real and meaningful transformation.”
For it’s not simply about access to education – which is obviously important – but that’s really only the very first step. We must ensure that all children have access to quality education. Unfortunately, the United States still struggles with our own obligation and responsibility to invest in the quality and care of students in our school system. America has some of the very best schools in the world, and yet too many children are still receiving substandard educations, dropping out, or achieving top grades and not being able to afford to go to colleges.
When I met with Minister of Basic Education Angie Motshekga last month, we talked about the same struggles here in South Africa and how we can work together to tackle some of these challenges. That’s why the U.S. Agency for International Development supports a public-private partnership with South Africa organizations to develop local solutions to education challenges.
One thing we realized in the United States is that improving educational outcomes in the classroom must start with better trained, more effective, better equipped teachers. So, here in South Africa, USAID is working with partners in government to develop high quality teacher training modules.
This week I also had the privilege of visiting the Ponelopele Oracle Secondary School in Kaalfontein, Midrand. Praise Ndebele, who we all heard about a few weeks ago, a 2013 matric whose marks were the highest in Gauteng, studied at the Oracle School – and his achievement on the matric exam marked the first time since the start of the National Senior Certificate exams that a candidate from a non-fee based school performed at the highest levels in the country, which I think is a pretty spectacular thing, and it was rightly celebrated.
But I am really proud, really quite proud to see how an American company built a beautiful school facility and has continued to engage with staff to support that school through so many creative means – career days, staff development, new and upgraded computer labs, hands-on technology efforts. Every single day for the employees of Oracle, every day for them is a Mandela Day in that school which is on the outskirts on Tembisa Township. It’s a great example of the wonderful work that American companies are doing right here in South Africa – which I will expand upon later in this address.
At the Oracle school I lamented my lack of a descriptive Zulu name, a group of students gave me the designation Ambassador “Siyakubonga” which of course means “we are grateful.” I have much gratitude for the spirit of the young people in that school because they really and truly are the real treasures here in South Africa
Last year, over 1,200 South Africans were enrolled in U.S. universities, and hundreds of U. S. students came here to South Africa to study and the U.S. Government funds a variety of exchanges such as the world renowned Fulbright scholarship program.
We can build on these successes that connect our educational institutions to local businesses and communities to produce graduates with the right skill sets needed to get good jobs here in South Africa and the kind of young people who are entrepreneurial, innovative and who will create hundreds of thousands of jobs in the private sector for their generation.
And that is the perfect segue to our conversation on jobs, trade and the economy.
Jobs. Is that not what we all want? Good jobs, in growing fields, with a solid workforce driving this economy. I’m particularly heartened by the role that American companies have played in the development of South Africa’s economy and the creation of stable, quality, sustainable jobs here in South Africa that pay good wages and provide good benefits.
The American Chamber of Commerce in South Africa surveyed 78 of its biggest firms last year. These 78 firms directly employ nearly 70,000 South Africans, and indirectly employ another 75,000 people throughout the economy. These companies spend over 320 million Rand on training every year, and spent 500 million Rand in 2011 alone on skills development – that is far above and beyond the mandatory 1.5% of their total payroll taxes on training that the government requires of them.
Increasing exports and attracting investment is critical for job creation. The U. S. economy has added 8 million new jobs since Barack Obama became president. That sounds like a lot, but it is still not quite enough. Job creation, increasing exports and attracting investment are just as important to us as they are to you here in South Africa.
But these are areas where I think South Africa has some unique challenges and I’d love to be able to address some of them here.
First of all—trade. President Obama has made clear that he wants to expand trade on this continent. Africa is a continent poised for sustainable growth well into this century. We believe we can contribute to, as well as benefit from that growth. This is not a point of philanthropy for us but it’s about partnership because results and outcomes are interdependent here for the United States as well.
One key way the United States supports jobs and prosperity here in South Africa is through the African Growth and Opportunity Act, or AGOA. Since 2000, under AGOA, African countries can export duty free to the United States. In 2012, South Africa exported $2.1 billion, more than 20 billion Rand, to the U. S. under AGOA. Many industries, including automobile manufacturers, have told us AGOA was critical to their decisions to invest here in South Africa
And South Africa exports more manufactured products to the United States under AGOA than any other country. In 2012, South Africa’s largest exports to the United States were the 60,000 cars made by companies like BMW and Mercedes, along with $70 million dollars’ worth of South Africa’s wine. Overall, Americans bought $250 million worth of South Africa agricultural products last year, which was an historic high mark for us.
I went out to Port Elizabeth, out on the shop floor for GM and Ford and I had great conversations with South African workers on their break and they seemed to know – you’ll forgive me for saying this – but they seemed to know much more about the benefits of AGOA than many of my interlocutors in the South Africa Government. They understood that their jobs were intricately tied to that policy in the United States, and they also knew that they needed to do all that they could to protect that benefit because it redounded to the benefit of workers in the Eastern Cape.
And because we understand and are committed to the mutual benefit to both of our countries when we trade more, we are trying to give some assistance here. For example, the U.S. recently eased regulations governing the import of citrus from South Africa, and made plans to expand the number of American ports to which South African farmers can ship their crops.
President Obama has made clear that he supports the renewal of AGOA. He made it clear in conversations – in bilateral discussions with President Zuma, he made it clear in a townhall discussion that he held here in Johannesburg as well. That said, when he was here last year he emphasized that although the Administration supports the renewal of AGOA when it comes up in Congress in 2015, he needs to be able to demonstrate that American businesses are not operating at a disadvantage here but that there is a level playing field for trade between the U.S. and South Africa.
So when faced with unnecessary barriers, American businesses and law makers naturally ask why they should continue to give AGOA privileges to South African companies when U.S. products are prevented from accessing this market on equal terms. It is a legitimate question and one that is likely to be brought up when the AGOA debate is joined in earnest in the marbled halls of Capitol Hill.
U.S. business has publicly voiced this concern about trade issues with South Africa to Congress and the Administration. Late last year, a group of 15 major agricultural associations representing 120,000 farmers and 8,000 agribusinesses released a letter protesting discriminatory South Africa barriers against U.S. pork, beef and chicken exports. This ad hoc coalition has members in every single state and its businesses represent virtually all the companies in the U.S. that process corn, and oilseeds, manufacture feed, and build agricultural machinery.
In the introduction today as the Professor went through some of my biography – you realize of course that in my prior life I dabbled in politics just a little bit – you can imagine the political impact in the United States when you have major agribusinesses coming to Capitol Hill, having conversations with their U.S. senators and with their congress-members about the disadvantage they feel they have as a consequence of these tariffs and demanding the question of AGOA be filtered through the prism of those tariffs. It has a real impact, it’s is substantial, and it’s something that should not be quickly dismissed here in South Africa
Just one group of the fifteen that reached out to their senators, the National Chicken Council, represents 200,000 jobs in the United States These are not individuals who are looking for concessions — just fair treatment in this market. There is a lot at stake for both of us. I hope unnecessary and unscientific barriers against U.S. imports will addressed well ahead of the renewal of AGOA debate in Washington, DC.
We have all of us learned that you need to work to preserve good jobs, protect the business environment, and support domestic industry, but not at the expense of competitiveness in trade opportunities today, and the opportunities tomorrow with new products and with increased innovations.
Because we see the value of increased trade, the United States is currently moving ahead with new potential agreements with Asia and with Europe – that’s going to have some ripple effects in other parts of the world. The countries we are negotiating with in Asia and the Pacific Rim represent 40 percent of the world’s gross domestic product. This Trans-Pacific Partnership agreement, when signed, will fundamentally alter global trade over the next decades by erasing most trade barriers between North America, parts of South America, and major economies in Asia.
South Africa is working on trade arrangements with the BRICS, and we encourage that approach. If you can win fair market access for your economy, and that accrues to the benefits of workers, that’s a good thing and we want to encourage that. But South Africa must endeavor to keep up with the ever-expanding drop in trade barriers, or else it will face a severe competitive risk.
Trade facilitation will also be vital to South Africa’s economic success. South Africa rates 41 out of 189 nations for ease of doing business but only 106 out of 189 for ease of exporting. Improving this number will strengthen the South African economy as well as enable the economy here to grow by thousands of new jobs.
It has long been understood that investment naturally follows trade. Investors are looking for policies and laws that balance benefits for workers with protections for companies – basic protections for companies. And with investment should, should come job creation that reduces poverty and brings about economic transformation. But the latter does not happen on its own or through the good will of fund managers.
I said that investment should lead to transformation but I will not share a rhetorical home with those who suppose that investment and trade are elixirs in their own right. Our governments must be alert to historic infrastructures that continue to drive disparities despite increases in worker productivity in Ohio or worker productivity in Port Elizabeth. Jobs are critical, but not the whole answer to significant social and economic challenges both our countries continue to face.
President Obama said in his State of the Union address, “After four years of economic growth, corporate profits and stock prices have rarely been higher, and those at the top have never done better. But average wages have barely budged. Inequality has deepened. Upward mobility has stalled. The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by – let alone get ahead. And too many still aren’t working at all.”
This is a problem that, unfortunately, also plagues South Africa. President Zuma in his address elevated acute inequality as a baseline hindrance to a truly equal society. I recently had the honor of meeting the founder of COSATU, Jay Naidoo, who warns that South Africa must urgently deal with the inequality problem before the conflagration of what James Baldwin called “the fire next time.” Following the tragic Marikana incident, Naidoo wrote, “There is a growing ferment in our land. The people in our townships, rural areas and squatter camps are bitter that democracy has not delivered the fruits that they see a tiny elite enjoying. They are angry and restless.”
Addressing South Africa’s critically high unemployment and stubborn inequality has to be something that we all commit to because it has implications far beyond these borders
Now, this is the point in my remarks where I might be expected to conjure up President Mandela’s legacy with the suggestion that this challenge should be met in the spirit of his vision. But you’ll forgive me for saying that I’m already finding that evocation to be an empty signifier divorced from political and social justice context – not unlike the ways in which Dr. King’s legacy has been reduced to a dream without his concomitant call for a peace that only comes from economic freedoms. The Mandela who coupled reconciliation with a muscular demand for national reconstruction and development is the appropriate North Star in this moment.
As promised at the top, I would like to now visit in some detail the current dynamic with organized labor and its impact on job stability. This is a delicate topic and one that I’ve already indicated has a poignant resonance for me.
I want to be clear that I don’t have a position on any individual labor actions ongoing in South Africa, nor insight into any current negotiations. South Africans have the right to strike enshrined in their Constitution, something your trade unions fought incredibly hard for, given the critical role they played in the apartheid struggle at a point when other movement operatives and institution were banned.
But clearly the volatility in the South Africa labor sector has had a serious impact on foreign investment. American companies have told me that high-profile strikes shutting down entire sectors and industries, coupled with the potential for violence makes it very, very difficult for them to convince their international boards to take on the additional risk of investing in South Africa.
Remember the 60,000 cars exported to the United States last year through AGOA? The numbers will be significantly reduced in this cycle after assembly plants were shut down a month and a half due to multiple strikes.
And this will lead to fewer jobs in the long run, not more stability for a very vulnerable workforce.
There are plenty of examples of this already. Although Toyota recently announced that it will start building the new Corolla model in Durban, other manufacturers are deciding against investing in this country. The CEO of Japanese car company Datsun recently said, “We know that every three years there are negotiations … in the motor industry. But it was the duration and strength of the strike that was cause for profound concern.” And reports are now that Datsun has decided to locate its new factory in India, rather than here in South Africa
This news comes three months after BMW, which is already here making cars, publicly announced it was shelving plans to add a new vehicle line to its South African operations. This car would have been a global export product and would have added thousands of jobs up and down the supply manufacturing chain in this country.
I will favorably stack my fierce advocacy for the collective voice of workers against anybody in the world. But what I have learned from my experiences in the U.S. is that workers, and the businesses that employ them, need each other more than ever at any comparable point in history. Technology and globalization are changing the nature of competition and work far faster than any ideological battles in government or debates on the shop floor. Manufacturing has a mobility that was just undreamt of in the last century.
But the nature of what workers ultimately need has never and will never change. As the great freedom fighter Amilcar Cabral declared: “Always bear in mind that the people are not fighting for ideas, for things in anyone’s head. They are fighting to win material benefits, to live better and in peace, to see their lives go forward, to guarantee the future of their children…”
Workers and business owners have a shared investment in this collective future. Both sides need to take a long-term view of how they both can prosper, rather than securing a demand or winning a short-term concession. Everyone’s goal should be an economically strong and sustainable industry that employs the largest number of South African workers with strongest possible benefits and wages. President Zuma, in his national address, spoke to this compact, and he spoke to it in a way that would suggest that he sees government’s obligation in this moment as well.
The challenges of the torturous history of economic dislocations demands that we all embrace the goal of closing that chasm – workers, unions, employers, investors, governments, faith-based organizations, all of our communities. As a unionist, I knew that in my world there were lots of tactics to employ to enhance real worker leverage – political lobbying, demonstrations, public solidarity campaigns, capitol and economic pressures to move international boards and to command the attention of those corporate bodies and of course, last but not least, strikes. How and when we engaged these tools always needed to be strategic and true to the ultimate goal of changing the lives of workers for the long term.
I can recall working with the lowest wage earners in New York’s healthcare industry – mostly women of color who toiled in the healthcare sector but didn’t have means to provide healthcare for their own families. I remember being on the frontlines with those workers. Well, those women who I worked with won change when they shamed their employers with a march right down historic, legendary 5th Avenue in New York City, a march the was led by the most powerful Catholic cardinal in the United States. These workers didn’t strike but instead used the power of community support and moral suasion to win economic transformation for their industry and for their families.
I can also recall an instance where I was managing a strike of low wage workers and a certain young senator from Illinois who was just beginning to make his national mark closed ranks with those workers and publicly embarrassed the employer back to the negotiating table. And I can also recall being an organizer on a transport workers strike that crippled a city, cost businesses billions of dollars and ultimately hurt the checkbooks of the striking workers themselves.
Leaning into the example of U.S. history, it wasn’t until Franklin Roosevelt that we created a solid framework for collective bargaining in the States; workers gained voice and had a structure to support them in the exercise of their rights. Because labor law was enforced employers understood that they had a social contract with their work force and we all benefitted. It lifted up all boats. The bottom and top 20% shared equally in the prosperity of our economy creating the largest middle class the world has ever known. That’s why the American Century was possible.
While U.S. unions focused on collective bargaining, unions in Germany also wanted co-determination in the workplace – being at a table to make the business enterprise the best that it could possibly be because workers would share in that growing productivity and prosperity.
Our early history had all workers gaining through the political power of unions. Ending child labor, winning 40 hour work weeks, weekends off, Social Security benefits, Medicare and civil rights as well. Through union political voice we lifted the floor.
But – and I want to put a fine point of emphasis on this next bit of business – but when we were only focused on our members and reverted to primarily using disruptive tactics we lost the support of the public, transparency with employers deteriorated and we lost the enforcement arm of our government. We learned that lesson late but where we did learn it has made a real difference in sustaining a struggling movement in the United States
South African laborists seemed to absorb these lessons from the U.S. and Germany early on judging by tools devised in the your very first democratic administration – The Labor Relations Act and the Companies Act both allow for formal labor participation in company management. But resistance to this participation means that the measure has actually atrophied.
South Africa also has a strong framework for real labor mediation. The impartial Commission for Conciliation, Mediation and Arbitration (CCMA) is positioned to help assure effective negotiation and reconciliation happen when disputes occur. But it can only provide a platform and mediate between parties. It cannot force the parties to settle. Its results are only as good as the input provided by both entities.
Here and in my home the active question is how do workers demand a share of their hard work in a way that maximizes economic potential. The model cannot continue to be that one waits until after a strike is initiated in order to enter into real substantial negotiations. And beyond retail wages, how do we change the framework for economic sharing in a substantive way that addresses structural inequalities?
The current shape of the conflicts can be a vicious cycle. Workers are exploited, they disrupt the enterprise making the employer lose money, foreign investors go elsewhere, workers fall further into debt and no one speaks for the scores of long-term unemployed who have never had the benefit of a union.
Strike action is an important tool but cannot be the first tool of the labor movement because of its profound impact, both in human and in economic terms. I have to tell you, as somebody who has had to look into the eyes of, and the soul of workers the night before they took a strike vote, somebody who had to convince them that that was the last best tool available to them, I had to always be clear that every other means had been exhausted because I knew that I was part of creating a real disruption in the lives of those workers, ultimately in the industry that they needed for their long-term well-being. I knew that it had implications beyond that one individual action, so I was always clear and always had the conviction that if I was joining with workers and casting that kind of a vote, and taking that action that every other tool in my tool-kit had already been exhausted.
So, one final chapter, adding to the volatility in the labor sector is the regulatory uncertainty that exists as well. Some of South Africa’s schemes to create and implement industrial policies have also created high levels of policy uncertainty for local and for foreign investors.
Among the key concerns of investors are evolving localization and other performance requirements, tighter labor markets, and the prospect of weaker property rights as well. Legislation to implement these changes, some of which are still in draft form, often lack regulatory certainty.
Specifically, for example, taken together, the Investment Promotion and Protection Investment Act, the draft Mineral and Resources Development Act, and the Private Security Industry Regulatory Authority Act amendments represent a potential weakening of the investment climate.
I urge the government to take a very, very close, comprehensive look at the combined effect these bills will have on that climate and I ask if that is truly the best way to create a more broadly shared prosperity here in all of the provinces.
So that’s it. My thimble runneth over. Thank you for your indulgences as I’ve shared these observations perhaps not with much wisdom, but certainty with the sincerity and candor that I believe is befitting of our friendship and this bilateral relationship.
We really and truly, as President Obama said when he was here, we really do stand shoulder to shoulder with one another, not only in our challenges but in our aspirations as well for the future of our children. Your remarkable Constitution spells out in beautiful detail exactly the type of society you expect to have as our constitution did as well over 230 years ago. But as you know we’ve had to work incredibly hard to continue to perfect our union. We are equally proud of the strides that we have made. As both of our presidents said this month, we owe it to our people to live up to the shared ideals of equality, prosperity, and human dignity for all.
And as I noted at the top of my speech, I approach this with true humility, a lack of arrogance and an appreciation that this democracy truly is only in its 20th year. God only knows where the United States of America was 20 years in – when most of our citizens still did not have access to the franchise, could not be land-owners, and were not in any meaningful way engaged in the project of democracy.
I’m such a little bit of a geek that a couple of weeks ago I was rifling through the internet looking for one of my favorite political documents, the farewell address by George Washington on the occasion of his leaving office and turning down the opportunity to run for a third term in the United States. And what struck me is that the farewell address was issued to the U.S. in 1796, only 20 years after the birth of our democracy. And in that note Washington goes on and on about the ways in which he’s worried that Americans really don’t have a national identity, cling more to their regionalism, to their state-ism, to their tribalism than they do to national purpose. He’s worried about speculation in the economy and the weak U.S. Dollar and our inter-dependence with Europe. And as I read through that I recognized the deep similarities that exist with South Africa only 20 years in. It heartened me, gave me a tremendous amount of optimism for how great this country will be in this next century.
So with that I’ll close and I’ll thank all of you for making me feel right welcome at home in South Africa because– as someone who worked in politics and labor– I arrived to national strikes and a really dynamic upcoming election. So thank you for making me feel at home.
So I’ll close there. I know, as I suspect that there are some eager students here who might have a couple of tough questions that they want to litigate with me and I welcome those at this time.