Special Hearings — Business Hearings — 1997-11-13

BONGANI FINCA: My last question, Chairperson, is on the question of border industries.  You have not dealt with this question in your main submission.
 I don't whether it is because DBSA was not directly involved in border industries or whether you do not perhaps see that they linked up any way with the violation of human rights in the way in which they operated?

MR GOLDEN: Thank you, Chair.  Please correct if I'm wrong, but I think projects like the Dimbaza and Fort Jackson projects were indeed border industry type projects which we supported as indicated in the paper.
 I believe we did support particularly in the provision of infra-structure a wide range of border industries.  I would see that as an absolute integral part of the bank's functions in that period.
 As I indicated we also did this in conjunction with the wide variety of other institutions like the IDC which had the industrial function, the SBDC for small enterprises and so on.
 So, I believe there was a set of parastatal institutions which worker together.  I certainly believe, I can speak only for the DBSA, that that was part and parcel of the system and was certainly part and parcel of support for Apartheid and the gross violation of human rights.

BONGANI FINCA: Thank you, Chair.

CHAIRPERSON: Thank you.  Dr Ally?

RUSSELL ALLY: Dr Goldin, you locate the establishment and the origin of the bank in what you call a conjuncture of the total strategy on the one hand and the attempts at reform and that the bank was an integral part of that, particularly its role in the homelands.
 What, from your knowledge of the research you may have done, was the role of the private sector of big corporations in this initiative?  What kind of involvement if any did they have with the Development Bank?

DR GOLDIN: Chair, if I may speak from my more general rather than my DBSA knowledge, I believe that an essential part of the strategy was to try and mobilise resources from wherever they may come to try and save these crumbling economies from total collapse and that that certainly involved co-funding with the private sector.
 Indeed, it's in the articles of agreement of the DBSA that they should seek co-funding from other sources.  I know that the investors in the decentralised or whatever one calls them, industrial occasions, were for the most part private investors.
 We know that the location of much of industry, for example, around the Eastern Cape and other areas is determined by those sort of set of factors which influenced location, not only through the DBSA and (indistinct) institutions, but through tax breaks, repression of trade unions and all the other sets of factors which forced those low weight economies to be attractive for private investment.
 So, I believe the private sector was an integral part of the system and if I may speak in my personal capacity, I certainly believe that it has much to account for in this.

RUSSELL ALLY: Just to continue from again your general knowledge, would you say that the private sector was conscious of some of the political motivations behind these kinds of initiatives or was it because this was a good deal?

DR GOLDIN: Well, good deals and political consciousness, I would have thought goes hand in hand.  It's very difficult to be a good business if you're unaware of the society you're operating in .  So, I think people knew what they were doing.

RUSSELL ALLY: One of the important issues to emerge from these hearing, and I'm sure it's going to be something that will continue for a long time, is obviously the question of reparations, given the injustices and inequities and inequalities of the past.
 Now, ...(tape ends)

RUSSELL ALLY: ... must have gained some insight into the ravishes of the past of what the consequences of the Apartheid system and particularly its economic component, what the consequences of that has been for the vast majority of people.
 Do you perhaps want to make some sort of general comments on the costs for the majority of people and some of the issues that are questions of reparations in order to be - seem to be really addressing these issues as opposed to simply ameliorating some of them?

DR GOLDIN: Thank you, Chair.  As to the costs, I don't believe that we will ever begin to grasp the cost of the system and that's why it is a gross violation of human rights.  The costs particularly to the deaths of people, their family's destruction - of family destruction of life, destruction of opportunity for the people of this country, is unquantifiable.
 One can begin to look at in economic terms, the destruction in terms of the economy, the refocussing of the economy and we live with the legacy of that today which is why we can't grow faster and why we can't do more.
 It's obviously beyond a huge number.  It's what we're all living and grappling with in all of our lives and trying to reconstruct and transform the economy. 
 Not only of course of South Africa, but of the region and the DBSA is now a bank that covers the 14 countries of Sadec and often what we're grappling is South Africa's destructive force in the region.
 As to reparations, we believe that the most we can do or the most focused thing we can do is to ensure that this institution, the DBSA, runs as fast as it can to try and meet the huge back logs which exist in South Africa and in the region for RDP and economic infra-structure.
 We will do all we can without drawing on Government resources which have to be prioritised for other purposes to maximise investment in our mandated area which is infra-structure.
 We believe in doing so and by listening to the needs of the people as to what their priorities are, because we know that not all their priorities will be met.  We will be doing what we can to overcome the legacy of the past.
 Within the organisation a fundamental transformation which we are undertaking, not only through affirmative action, the policies, not only through the anomalies exercised which we've allocated these amounts of money that I've indicated for, but recreating an institution which gives people a learning opportunity.  
 An opportunity to give back to society what society has taken away from people.  I believe that is the form of reparations that we as an institution can take.
 Because we are not taking back and because we are getting no subsidy, because we will be paying taxes and dividends, in a sense what we are doing is transferring the subsidy that was given to the institution in the past, for good use in the future on the strength of our balance sheet.
 That of course in a sense is, one may interpret, as a form of transfer from the Apartheid system to the new system.  I don't know if you'd like to say more than this, but I think the biggest thing we can do is to help change people's lives for the better in everywhere we can.

RUSSELL ALLY: Thank you.  The last question.  The involvement of the private sector presently in the Development Bank;  the same, less, more enthusiastic?  What's your experiences as to its role in the past?