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It is a great honour to be able to address the Annual General Meeting of so influential an organisation as this. Indeed, as the columnist "Lood" in Beeld has revealed, I myself became aware of this honour only very recently. As you will have noted from your invitations and from other documentation, my colleague Tito Mboweni was to have addressed you today but found, at the last moment, that other commitments made it impossible for him to be here. My presence here this afternoon is accordingly a reflection of my willingness, on the one hand, to rush to the assistance of a Cabinet colleague, and on the other hand to meet once again with my old friends in SIEFSA. Apart from that, any politician would be happy to make use of so prominent a platform so close to the date of an important election.

An Annual General Meeting is the occasion on which organisations take stock of their performance during the preceding year and assess their prospects for the future. I though that I might help you with this process by sharing my views on likely developments in the short and medium term. This I will do within the broader global and national frameworks within which you and your member companies will have to operate during the coming year.

When assessing one's environment it is wise to start with the broadest possible framework. The good news is that things seem to be going fairly well with the universe and with our own galaxy. It is unlikely that there will be any galactic events, barring the odd, unexpected meteor, that will impact materially on the interests of SEIFSA's members for another two thousand million years. As with many other economic analysts and forecasters I am, however, hesitant to stick my neck out too far regarding prospects after that.

I we narrow our focus to our own planet, we will note that there might be some global developments that could affect us all in the coming decades - such as the environmental impact of global warming, the hole in the ozone layer or the destruction of the world's tropical forests. However, most of these developments are unlikely to impact directly on your membership, except perhaps those of you who are involved with the production of products using CFC's (Chlorofluorocarbons).

However, when we start to focus on the global political and economic environment, the picture begins to change markedly. We begin to discern developments and trends that will fundamentally and immediately impact on companies, not only here, but throughout the world. We must remember that nearly all of the main developments in our own history had their origin, not in South Africa, but in great developments on the international stage.

The mercantilism of the seventeenth and eighteenth centuries that opened up our country has its roots in Europe, as did the colonialism and imperialism that dominated our history during the nineteenth century and led to the great crisis of the Anglo-Boer War.

We did not start the First World War - although it led to the death in battle of some 14 000 South Africans, most of whom had never heard of Serajevo or of Archduke Franz Ferdinand of Austria.

The Great Depression began on Wall Street and not on the Johannesburg Stock Exchange - yet it had enormous repercussions for our economy and resulted in the impoverishment of millions of our people.

The same was true of the Second World War, the dissolution of the great European colonial empires, the universal rejection of racism, the advent and passing of the Cold War. All of these global events directly determined the agenda in South Africa and provided the framework within which we as governments, companies and individuals were constrained to move and pursue our destinies.

So it is now and always shall be. Indeed, we can expect that our interaction with, and dependence on, the international community will increase dramatically as the global technological and information village becomes more and more of a reality. Markets now respond to developments anywhere in the world within seconds, compared with the situation in the eighteenth century when it often took months for the burgers of the Cape to receive news of momentous developments in Europe.

As far as the global economic environment is concerned, the news is primarily good:

South Africa is once again a full participant in the global economy. Developments since 2 February 1990 have made its possible for us to break free from the stranglehold of sanctions and isolation. Our relations with the IMF and the World Bank have been fully restored and we have access to financial markets around the world.

It is estimated that during the ten years between 1984 and 1993 South Africa experienced a capital outflow of R50 billion. When the Government of National Unity took over in May 1994 the official reserves were totally depleted and we had to borrow more then R8 billion just to keep going. This situation was one of the main reasons why our economy could grow at an annual rate of only 1% during this period.

Immediately after the inauguration of the new Government there was a dramatic reversal of this situation. In the 12 months ending in June 1995, there was a total net capital inflow of no loess than R18,6 billion, equal to almost a third of the loss that we incurred during the preceding ten years. This, in turn, has greatly improved the prospects for high sustained levels of economic growth.

In addition to this, the prospect for global economic growth of 4,1% during 1996 is better than it has been for almost a decade. This creates considerable opportunities for South African exports of both primary and manufactured products.

Involvement in the global economy will also impose essential discipline on the manner in which we manage our own economy and run our businesses. There is no longer much debate regarding the economic, fiscal and monetary policies that governments must adopt if they wish to retain the essential confidence of the international economic community. From the government side we must maintain fiscal discipline; we must reduce the budget deficit; we must continue the fight against inflation; and we must create the kind of socio-political environment that will ensure peace and stability.

For our private sector it means meeting the challenge of global competition by producing export products that will perform successfully in highly competitive global markets. Increasingly, it will also involve the challenge of competing against thigh quality, low cost imports in our own domestic markets. All this involves an enormous challenge to management and unions to work together to improve productivity and the competitiveness of our products.

We can also expect that our domestic market will be dramatically affected by the waves of new global technology that will impact on us during the coming years. One has simply to look at the effects of the introduction of cell-phones and personal computers to get some idea of what might lie in store.

All in all, the global environment looks exciting, challenging and positive. What of the more immediate national environment?

Eighteen months after the establishment of the Government of National Unity, I have no hesitation in saying that things are, on the whole, going very well. The situation is certainly much better than anyone would have dared hope during the anxious months preceding our election last year.

We have succeeded to a remarkable extent in normalising our society and in laying the foundation for a vibrant multi-cultural nation, at peace with itself and respected by its neighbours.

We have established for the first time in our history a rechtstaat in South Africa - a society based on law, the constitution, and a justifiable Charter of Human Rights.

The problems that now confront us - such as crime, labour unrest, and delivery of services - are on the whole, the type of problems that confront normal societies throughout the world. They are no longer the insoluble and desperate problems with which we had to contend before 2 February 1990.

Despite the widely publicised tensions between President Mandela and myself- the Government of National Unity is functioning reasonably well.

My Party and I are committed to making a success of the Government of National Unity in the spirit, and within the framework, prescribed by the Constitution. Our role is sometimes difficult and frustrating. However, we have no doubt that our participation in the Government of National Unity has in many cases materially contributed to better government and to the formulation and implementation of more acceptable and more appropriate policies. In particular, we have adopted the right broad economic policies:

We are maintain fiscal discipline, despite the urgent and often deserving pleas for increased expenditure. Our target for the budget deficit for the current financial year of 5.8% is still too high, but is considerably better than the 8.5% registered during the 1992/93 financial year.

The strict policies applied by the Reserve Bank in its relentless fight against inflation are also beginning to bear fruit. At 7.5% it is now at its lowest level for 22 years. However, inflation will not be low enough until it is at least in line with the rates of our main trading partners.

In March 1995 we abolished the financial rand. In June 1995, the Reserve Bank began to reduce its role in the forward foreign exchange market, and with the approval of the Government, began the gradual relaxation of exchange controls applicable to South African investors.

We have accepted the challenge of integrating our economy into the global economy. Our commitments in terms of the trade liberalisation programme concluded in terms of the Uruguay Round will force us to take serious stock of our international competitiveness. This process will inevitably have far reaching implications for SEIFSA, its member companies and our trade unions.

At the same time, our national environment also includes some serious problems:

We have to address the existing conflict and the looming confrontation in KwaZulu-Natal. I am convinced that this problem can be satisfactory resolved through negotiations, good faith and the implementation of existing agreements and the ample provisions in the present Constitution. But this will happen only if a renewed commitment by all relevant political leaders to solve the problem can be achieved. And to achieve such a renewed commitment special initiatives are required. I am critical of the role of the ANC and the IFP at the moment.

We must adopt practical and active measures to combat the unacceptable levels of crime and violence in our society.

We have to cross the perceptual threshold where organised labour and management cease to view one another as class enemies. They must, instead, accept one another as indispensable partners and allies in the life-and-death struggle for success in foreign and domestic markets. And they must accept co-responsibility for solving the problem of unemployment.

We must maintain the integrity and effectiveness of state administration - particularly within some of the provinces. We cannot afford or accept the kind of administrative disintegration in the provinces that we observed in the old dispensation in some of the national states and TBVC countries. At the national level we must stop the alarming loss of experienced and competent officials.

We must defend our constitution and the principles that it contains. We must guard against centrist tendencies that seek to concentrate power in the hands of ideologically driven bureaucrats and politicians in Pretoria and Cape Town - whether their target is the education system, private enterprise, the media or the manner in which local government conducts its business.

However, despite these undoubted problems, the national environment also looks promising and positive. This perception is reflected in the Business Confidence Index, which has now reached its highest level in more than 10 years. Prospects look particularly promising for the manufacturing sector, including many of SEIFSA's members. In the second half of 1994 manufacturing grew at an annualised rate of 9%. In the first half of this year it was a healthy 6%.

Developments in our international and national environments seem to be favourable for the attainment of one of our key national objectives - the realisation of rapid and sustained economic growth. Success with this objective, will greatly facilitate success with our other major national objectives - the improvement of the daily lives of millions of South Africans through the effective implementation of the RDP and the consolidation of a genuine multi-party democracy in South Africa.

Nothing succeeds like success! And if we succeed in South Africa we will be in a good position to help our neighbours in our region and in our continent. By so doing we will be able to make an important contribution to peace, stability and prosperity in the global environment. After that we will see what we can do about the universe!.