Speech by IAN PLENDERLEITH Deputy Governor South African Reserve Bank to the ASSOCIATION OF COLLECTIVE INVESTMENTS CONFERENCE in Cape Town on Tuesday 17 August 2004 It is not very often that a central banker gets to comment on his country’s economy in Latin. As someone whose undergraduate studies were ancient Greek and Latin, I am delighted to seize the chance. The Latin I have in mind is Pliny’s often-quoted phrase, “ex Africa semper aliquid novi” - always something new out of Africa, by which I think Pliny meant that Africa could always be relied on to spring surprises, by astonishing the world with some bizarre new novelty. I want today to suggest some reasons why, if Pliny were with us now looking back on the remarkable progress South Africa has made over the past ten years, he would say the opposite. Much of the effort that has been applied to leading South Africa forward over the past decade has been directed to achieving what might be called “normalisation” - the steady process of building the stable political and social and economic structures that are normal for a modern, well-governed country in the 21st century. This is true of our political system, as was evident to all the world earlier this year as, with pride and style, we celebrated 10 years of democracy and held standard normal democratic elections, which were conducted with exemplary calm and good order. It is true, too, of the immense progress that has been in building a genuinely open multi-racial society and progressively alleviating the legacy of social neglect in areas such as education, health and basic living standards. It is true also, very visibly, in the economic sphere, in the huge strides that have been made in bringing South Africa into the frame as a normal, modern, open, competitive, market-based economy. It is this commitment to normalisation that has won the admiration of the world. I think it would win Pliny’s admiration, too, and that he would see that it is not frivolous novelty, but stable and sensible normality that is South Africa’s great achievement. So I think he would re-write his quotable phrase, to suggest that the key ingredient in the immense progress we have made in the past ten years has been, not “semper aliquid novi”, but “semper aliquid normalis” - always something normal out of South Africa. In the economic sphere, the extent to which the country has been put on the track of normalcy, running as a standard, normal, modern economy, is something of which everyone can be immensely proud. It is a priceless gain, achieved by hard work, dedication and intelligent policy-making. But it is not just something to look back on with satisfaction. It is even more important to look forward, to recognise that the stable framework for a normal, well-run economy that has been achieved to date provides the foundation for improved economic performance in the years ahead. That means the prospect, if we stick to the task, of faster sustainable growth, better public services, higher living standards for all our citizens and growing and competitive businesses that will generate lasting jobs for the future. But we need to recognise, too, that it is only now, after some years of laying the foundations, that we are beginning to see these benefits come through in substantive, concrete form. Sensible policies, aimed at generating benefits that are sustainable over the long term, take time to deliver dividends. But commitment to good government, in the economics sphere as elsewhere, really does produce results, and I want to highlight three areas where I believe we are now seeing the benefits come through strongly. First, South Africa has for ten years steadily pursued a stable, disciplined macroeconomic framework. The rewards for macroeconomic discipline, however, build up over time and it is important to recognise where we are now beginning to see the real benefits come through. On the fiscal side, the National Treasury’s commitment to maintaining budgetary control and strengthening the public finances is now providing the base for signifi