Mangosuthu Buthelezi's Weekly Newsletter to the Nation

I am concerned that as the battle intensifies for the soul of the ruling-party in 2007 we do not lose sight of the one of the two most important battles we are waging as a nation (the other being HIV/Aids): the fight to defeat poverty.

We cannot bury our head in the sand and pretend that the poor, many of whom have seen a material decline in their living standards in absolute terms, do not exist.

They may have disappeared off the radar screen of the metropolitan elite, but the IFP has not forgotten them. One fears that this 'silent majority' is feeling increasingly disenfranchised by the political process and may be one of the reasons why the actual votes cast (not the share of the vote) for the ANC declined sharply between the last two elections.

The IFP must construct a narrative that speaks to the very poor in the rural areas and in urban informal settlements. The very poor feel disconnected from the political, economic and social centres of decision-making.

The challenge for my party is to provide a clear alternative to the ANC which addresses the gut-wrenching poverty which is choking millions of South Africans everyday. The poverty, as well as the ANC, can only be defeated by a meaningful shift in public policy.

This means that we must persuade the electorate that the IFP has a cogent set of policies to accelerate economic growth and address systemic poverty and inequality. Quite frankly, the 1980's language of the centre-right such as "rolling back the state" simply does not resonate with the very poor in South Africa.

In many ways the South African state is weak and ineffective in delivering essential services to the poor. It is for these reasons that the IFP's advocacy of localism is so important. The IFP has still to win the intellectual and political argument that the decentralised state is more effective than the unitary state in delivering essential services. We have not yet won it and there is a powerful case to make.

The often chaotic and inefficient provision of social grants and education services provides a pertinent example.

It is precisely the ineffective state and the hapless civil service that should discourage the government from pursuing its current corporatist and interventionist policies. The ANC government has been hugely overambitious in setting its service delivery targets. The enormous backlogs and recent protest riots testify to this. The bulk of initiative should be borne by the individual.

The state's active role in creating a black oligarchy, primarily through the unashamed economic patronage of Black Economic Empowerment (BEE) deals, has also further eroded poor South African's confidence in the market economy.

It is the emerging black entrepreneurial classes, those at small and medium enterprise level, that have come into being outside the government drive for a black economic empowerment, that have proven to be most viable. Herein, in my opinion, lies a big part of the answer.

And there is no doubt that South Africa's rigid labour market is impeding accelerated economic growth and job creation. South Africa is faced with a crippling skills shortage and one of the lowest rates of foreign direct investment amongst emerging economies.

Foreign direct investment plunged by 31% between 2001 and 2002. And most alarming for South African workers, entrants to the labour market are growing three times faster than the economy is able to create jobs. We are, in many ways, experiencing what some economists have described as "jobless growth".

In this regard, as contentious as this debate is, we must review affirmative action. Whilst I believe that affirmative action as a remedy makes sense, its implementation, as it is now, I am afraid, is not fulfilling its original purpose - that of bringing the previously disadvantaged out of poverty.

In practice, the policy tends to benefit primarily the most fortunate among the preferred group (such as black millionaires), often to the detriment of the least fortunate among the non-preferred groups or even the same group.

Affirmative action has been applied in countries as diverse as Malaysia, the USA, Sri Lanka and India. Some figures - and one must treat figures carefully - illustrate that affirmative action has deepened poverty in the USA for poor blacks whilst increasing wealth for rich blacks.

It might appear that affirmative action has created a new form of socio-economic discrimination in employment and education, where the respective government programmes encourage in favour of middle class members of the majority group over better qualified but working-class members from the same group since such programmes do not, in essence, consider socio-economic class.

And then there are the undesired economic sidekicks. Affirmative action has demonstrably reduced the incentives of both the preferred and non-preferred to perform at their best - the former because doing so is unnecessary and the latter because it can prove futile - thereby resulting in net losses for society as a whole. The widely perceived declining standards in South Africa's civil service are a foretaste of things to be witnessed in the private sector. But let me get back to the basics of this debate.

Jobs, jobs and jobs are, of course, are the quickest way to empowering the marginalised and the poor. Empowerment criteria - such as race, gender and disability - should be "plus" factors, but not the sole considerations, when affirmative action appointments are made or contracts awarded. Affirmative action legislation should incorporate sunset clauses. Wherever possible, affirmative action should be on a non-racial basis.

I hope that in 2007 we must take a hard and dispassionate look at the implementation of both our poverty alleviation and supply-side policies. The time is ripe for a fresh approach.