by the future government. recently, prof sampie terreblanche, of the university of stellenbosch has said in a book entitled : a history of lnequality in south africa, 1652 - 2002, that “ in 1993 the corporate sector and some anc leaders reached a hugely important elite compromise. this happened before the transitional executive council ( tec ) accepted a secret $ 850 million loan from the imf to help tide the country over balance of payments difficulties in november 1993 ” ( p96 ). he continues to say that “ before the tec signed the loan agreement, the corporate sector and the np government on the one hand and anc leaders on the other signed a secret protocol on economic policy … ( they ) agreed with the imf, the tec committed itself to a neo - liberal, export - oriented economic policy and a ‘ redistribution through growth ’ strategy ”. i was one of the people involved and i can say with confidence that prof sampie terreblanche is totally and completely wrong. there was no secret meeting of the corporate sector and the core leaders of the anc that i am aware of to agree on a secret document. this was a tec matter handled through the sub - council on finance. naturally, the delegates to the subcouncil consulted their principals. but i emphasize that any careful reading of the statement will find no contradiction with ready to govern. but that is a matter for political economists to sort out in due course. it is fair to say that the balance of payments constraint that we grappled with at the tec was only the tip of a large iceberg. here are some of the indicators of an economic crisis that we went through. the pre - 1994 period is contrasted below with what has happened in ten years. firstly, in 1985, on the back of the sanctions campaign, the government of the day declared a partial debt standstill. the affected debt was $ 13, 6 billion and the total debt was $ 23, 7 billion. from 1985 to 1993, the net financial outflow adapted from the chapter appearing under my name in a book by the world economic forum entitled south africa : the miracle continues. june 2004. from south africa was some r45 billion or 11 per cent of gross domestic fixed investment. that forced the authorities at the time to implement stringent policies to generate current account surpluses. the cost to the economy was immense. in august 2001 the final repayment was made. the

international capital markets were opened to south africa effectively in 1995 when the first post - apartheid sovereign bond issues of $ 750 million was launched. secondly, the trade regime at the beginning of the 1990s was characterised by three interrelated strategies, namely the promotion of domestic industries through import substitution, the development of specific industries to attain self - sufficiency and the promotion of mineral beneficiation. south africa ’ s industries therefore became heavily protected by formulae, specific and ad valorem duties and surcharges. high tariff levels were complemented by quotas that limited the quantity of imports. the tariff structure was extremely complicated. overall the strategies pursued by the authorities resulted in a complex discretionary regime fraught with corruption and bureaucratic mismanagement. as a result changes to the tariff regime became a fundamental imperative for the new government in 1994. the number of tariff categories was reduced from over 100 to only six and the average weighted import duties on manufactured goods to the total value of manufacturing imports decreased from 14, 0 per cent in 1994 to 4, 7 per cent in 2002. several free trade agreements were also signed to dismantle trade barriers and to gain increased market access. the process continues today and many global trade doors have been opened. in addition to these, measures were undertaken to promote competition, industrial policy was adjusted to enhance the competitiveness of manufacturing enterprises in export markets. in particular more emphasis was placed on supply - side measures, rather than demand - side measures such as expensive export support programmes. these measures included investment incentives for large investments of a strategic nature and for small and medium enterprise development ; training grants to firms investing in the promotion of skills ; the development of industrial development zones ; improved access to finance ; and support for investments in economic infrastructure. a new competition act was passed in parliament in 1998 to, among other things, create a greater spread of ownership in enterprises, to expand opportunities for south african participation in world markets and to provide consumers with competitive prices and product choices. thirdly, at the beginning of the 1990s an unsustainable fiscal situation had started to develop, and the deficit before borrowing and debt repayment of the government reached 7, 3 per cent of gross domestic product in the fiscal year 1992 / 93. the internationally acceptable rule of thumb is that the fiscal deficit should ideally not be more that 3 % of the gdp. government expenditure continued to rise relative to domestic production, the tax burden increased, the public sector made increasing demands on the domestic capital