On behalf of the KwaZulu-Natal government, we wish to express our sincere delight for being here this morning to celebrate yet another practical expression of the mutually beneficial friendship that the people of South Africa and the people of Denmark have moulded over the years in the form of a multi million rand investment which we have no doubt that it will change the lives of our people for the better.
Programme Director, the people of South Africa and the Danish people have always enjoyed a special bond.
Even during the darkest days of apartheid rule, when many countries were reluctant to nail their colours to the mast by openly supporting our cause, it was the people of Denmark who helped to put pressure on the apartheid regime.
Not only did they condemn the apartheid regime but they also channelled financial resources into our country to help us wage a relentless war against the iniquitous system of apartheid.
For this, programme director, we owe the people of Denmark a huge debt of gratitude. It is therefore pleasing that today we are here to celebrate an investment which is a joint venture between a South African company and a Denmark company.
This shows in practical terms, Programme Director, that even during the post-apartheid epoch, the Danish people are continuing to play a critical role in our reconstruction and development project. The reality is that while South Africa is today a free country, it will still take a long time before all of our people are able to enjoy economic freedom. So deep did the effects of apartheid run in fostering inequality and skewed growth.
As all of us know, our country and indeed the whole world have emerged out of the biggest economic recession of our time, which did not only decimate the biggest economies in the world but wrecked havoc across the global economic landscape.
Like many other countries, South Africa is still today licking its economic wounds as a result of the global economic meltdown. Apart from the many companies which were forced to close shop, our country lost about 1 million jobs over the past two years. This slowdown in economic activity in our country has not only had an adverse effect in our economy but had a direct impact in the lives of our people.
In the fourth quarter of 2009, the unemployment rate stood at 19.2%. This grew to 19.3% in the first quarter of 2010 and in the second quarter the figure stood at 20, 8%. Accordingly, the number of officially unemployed persons increased from 580 000 in the first quarter of 2010 to 622 000 during the second quarter. Worryingly, the number of discouraged work seekers rose from 484 000 in the first quarter to 487 000 in the second quarter. Yesterday, in its quarterly employment statistics, Statistics South Africa, held that in the manufacturing industry there was 17 000 decrease in terms of people employed for the quarter ended in June 2010. This indeed is very worrying for us as government.
It is in this context that the investment of the Fibertex should be looked at. This investment by Fibertex will go a long way towards creating jobs in our province and this will have a domino effect in terms of boosting the economy of South Africa. Critically, this move by Fibertex will help resuscitate the manufacturing sector which has shown negative growth in the last quarter.
Programme director, one of the legacies of the global economic meltdown is that it has change the global economic order as we know it. As we speak today, China has become the second most powerful economy in the world after it replaced Japan. This has led to many economic observers remarking that the era of Washington Consensus is over and we now have the Beijing Consensus. But more importantly, this has presented many challenges for emerging economies such as us who are now fishing from a increasingly shrinking economic pond owing to the decline of the global economic activity in the world.
Because of the slowdown in the economic activity in the developed economies, investors the world over have been forced to look towards the emerging markets such as South Africa, where the yields from investments are high. This investment by the Fibertex is therefore an expression of confidence in our economy and in its future. Critically, it is a sound business move for it has become clear that the continent of Africa is the next point of growth in the world where investments still yield good returns.
Since the dawn of democracy our government has worked very hard to create an environment that is favourable to investors. We have done this understanding that all investors look for destinations where they know that they will get better returns from their investment. Closer to home in our province, we have taken practical steps to ensure that our province becomes an investment of choice.
As you are all aware, KwaZulu-Natal has ceased to be the dark sheep of South Africa’s provinces. Over the past six years we have moved with speed to harness our comparative advantages and ensure that these yield visible rewards for our economy.
We have, among other things, invested heavily in the logistics, infrastructure and transport sectors in order to utilise our geographical location to our advantage. Our ultimate objective is to be the logistics hub of the Southern African Development Community (SADC) and the gateway to the rest of the African continent and the world.
As we speak our province is currently the second biggest economy after Gauteng in South Africa. We believe that our strategic location of being the only province in the country we two of the countries biggest ports, coupled with the Dube Trade Port which boasts the new King Shaka International Airport and has, among other things, a dedicated cargo handling facility, puts us in good stead to be the biggest economy in the near future in the country. We see KwaZulu-Natal as the biggest hot spot for investment owing to the fact that we are the most diversified economy in the whole country.
With regional integration dominating the multilateral fora agenda and the world fast becoming a global village, we believe that it is only those economies that see beyond their borders who will be competitive, in the first instance, and be prosperous going forward. As colleagues are aware SADC has, among other things, declared that by year 2015 we would have a common market and that by year 2018 we would have a single currency for all fourteen member states. The key imperative in this regard, is the integration of economies of the region for sustainable development. In this regard, we aim to utilise our stature in the multilateral fora to be the de facto pioneer in this regard.
We are pleased to note that Fibertex has started to supply fabric used in the automotive components industry and that there you have already understood that our province is the gateway to the rest of the SADC region. Pointedly, we want to commend your stance on having your regional offices where you actually do business. We believe that this not only makes business sense but makes it easier for us to interact and, importantly, assist one another in dealing with challenges that may need provincial or local government intervention.
As alluded to earlier, our province made history in May this year when we opened the first green field airport in decades, the King Shaka Airport, which is part of the Dube Trade Port, which also boasts a cyber port, a dedicated cargo terminal and an agri-zone. The total investment so far into the Dube Trade Port, including the King Shaka International Airport, is more than R8 billion. This is an expression of our government’s belief in the ability of our province to be a world player, particularly in the logistics arena.
But more importantly this facility, we believe is not only an asset for the province but we go a long way to ensure that KwaZulu-Natal plays a critical role in the SADC economy. As the province of KwaZulu-Natal and the country we have over the past few years made a sustained focus on removing bottlenecks and to ensure efficiencies in order to ensure that our province becomes the investment destination of choice. Among others, we have invested billions of rands to widen the harbour in order to ensure that we improve our imports and exports.
The fact that Fibertex is located just a stone’s throw away from the harbour and the Dube Trade Port is not only a boon for Fibertex but proves that KwaZulu-Natal is place to do business. In conclusion, we want to thank Fibertex for investing in our province. We have no doubt that your investment will pave a way for many companies from Denmark to invest in our province, understanding that the investment will also go a long way towards assisting our country to build an economy that will be resilient and that will be able to help us respond to the social economic challenges facing our country.
I thank you.
