M Mpahlwa: United Nations Industrial Development Organisation

28 November 2006

Your Excellencies, ambassadors and heads of United Nations (UN) funds,
programmes and agencies,
Representatives of donor agencies and non-governmental organisations
(NGOs),
Representatives of small and medium enterprises (SMEs),
Senior officials,
Other distinguished guests and friends,

I am delighted to participate in this very important occasion celebrating
the 40th anniversary of the UNIDO. It is appropriate that these celebrations
are taking place not just at the UNIDO headquarters in Vienna, but also in
centres around the world. We are particularly pleased that stakeholders within
the Southern African Development Community (SADC) region are among those
invited to celebrate such a milestone event.

The Department of Trade and Industry (the dti) is strongly of the view that
UNIDO's mandate and its activities remain extremely relevant in assisting
sub-Saharan Africa confront one of the major challenges facing it. I refer to
the challenge of transforming our economies from producers and exporters merely
of primary products into producers and exporters of a broader range of value
added products. Only by strengthening the too often weak productive capacities
of African industrial sectors, can our continent hope to move from the
periphery to the mainstream of global development. Without at least beginning
to affect such a shift, Africa will not have a sustainable basis to attain its
Millennium Development Goals (MDGs).

In seeking to fulfil its mandate of promoting industrial development and
international industrial co-operation, UNIDO has developed various service
modules, which we believe can play a useful catalytic role in supporting
efforts to strengthen industrial capacity.

The fact that UNIDO has committed itself to making sub-Saharan Africa its
focus area over the next 10 to 15 years augurs well for industrial development
strategies within the region.

Industrial development and increasing participation in international trade
have long been identified as key contributors to sustainable economic growth.
Strengthening industrial supply capacity is, moreover, an essential response to
trade liberalisation. As part of its contribution to assisting in strengthening
the productive capacity of developing countries, UNIDO has amongst its
offerings a service module that deals with issues of industrial competitiveness
and trade. This assists with capacity building in the areas of standards,
metrology, testing, accreditation and quality assurance as well as in respect
of sanitary and phyto-sanitary issues, all of which are aimed at improving
compliance of export products to international market requirements by improving
the quality of production and thereby reducing the potentially negative impact
of technical barriers to trade.

Even though many countries in the SADC region have significant mineral and
agricultural resources, the exploitation of these resources has not translated
into proportionate gains in employment creation or poverty reduction. This is
also linked to the fact that industrial development in sub-Saharan Africa has
lagged behind the rest of the world including that of other more rapidly
growing developing regions.

UNIDO does, of course, recognise the potential benefits of rich agricultural
and mineral resources. However, it cautions against reliance on such resources
in their primary form, stressing instead the greater benefits that can accrue
from strengthening the backward and forward linkages within minerals
beneficiation and agro-industries from raising productivity and increasing the
potential for development of value added sectors. Support and advice is offered
by UNIDO to private sector, traditional agro-industries and State decision
making bodies in various sub sectors through the Agro-Industries Service
Module.

Despite the well meaning interventions to promote resource based industries,
we cannot ignore the reality that the economies that have grown fastest are
those that have diversified and reduced reliance on low value, low technology
products. Growing global income, technological advances and the straddling
across countries of production chains have all contributed to creating a
reality in which it is high technology products that have shown the fastest
growth in manufactured exports, with medium technology products retaining a
high but steady share and low technology and resource based products declining
in world trade overall.

South Africa is in the process of developing a National Industrial Policy
Framework (NIPF) aimed at identifying and unlocking growth and employment
constraints in the economy with a particular emphasis on growing
non-traditional tradable goods and services due to their relative intensity in
low skilled labour and potential for value addition. Such a framework needs to
be complemented by improved financial and technical support for the south-south
trade, and especially for trade with and within sub-Saharan Africa. In this
regard we welcome the south-south co-operation that is being championed by
UNIDO. This, significantly, does not envisage disengagement from north-south
co-operation. It enhances co-operation among countries of the south as a basis
for strengthening capacity to promote more beneficial relations between the
southern countries and the north, and within the global economic system
generally. Although the leaders in this regard are currently located in east
Asia, SADC countries with the assistance of UNIDO need to more aggressively
pursue greater, equitable and mutually beneficial co-operation with leading
countries of the south such as India, Brazil and of course China.

Another key factor that can promote sustained growth is the establishment of
the physical and institutional infrastructure necessary to satisfy the
increasingly stringent environmental requirements necessitated by the threat of
climate change. The cleaner production centres promoted by UNIDO aimed at
encouraging more environmentally friendly production techniques play a crucial
role in this regard. Through this programme UNIDO can assist governments to
create the institutional framework that will enable countries to support a
transition to higher standards of environmental sustainability.

A key stakeholder in any industrial development initiative is, of course,
the private sector. The comprehensive offerings within UNIDO's Private Sector
Development Service Module, promote institutional and regulatory support for
the business community.

UNIDO alliances, clusters and networks can also be leveraged by SMEs to
benefit from the technological and managerial expertise of larger corporations
within UNIDO networks.

Parallel to the development of the National Industrial Policy Framework,
South Africa is also developing a strategy aimed at accelerating a more
regionally diversified industrial development. As a critical part of this, we
need to identify appropriate regional industrial development support measures
that can enhance comparative advantage and growth potential of regions outside
the existing industrial heartlands of South Africa and UNIDO's technical
know-how and experience, which UNIDO expressed willingness to share with us,
will contribute massively in achieving this goal. This will be the subject of
an Africa Productive Capacity Initiative (APCI) Conference from 6 to 8 December
2006. But we also look forward to further consultation with and input from
UNIDO in this regard.

Other practical initiatives, where UNIDO through its sub-regional office has
worked closely with the South African Government include, but are not limited
to the following:

* UNIDO has assisted in defining the potential for developing the forest
industry and downstream processing in the Eastern Cape province. A UNIDO expert
from Vienna visited the Eastern Cape province to assess the needs relating to
the expansion of existing and the creation of new SMEs in the wood industry
sector. A report was submitted that, among other things, identified the need
for a thorough market analysis that would inform the formulation of a project
of assistance.

* UNIDO has supported a review of the Work Place Challenges (WPC) programme
implemented by the National Productivity Institute (NPI). UNIDO participated in
several meetings and has been asked to be part of the Review Committee.

* UNIDO has been asked to facilitate the inception of the newly appointed
Small Business Advisory Council (SBAC).

* UNIDO has assisted in the development of aloe processing in the Dutyini
area in the Eastern Cape province.

* UNIDO has met with the Enterprise and Industry Development Division (EIDD)
of the dti to identify potential areas of assistance and support in line with
the newly formulated National Industrial Policy Framework. A joint workshop has
been scheduled for January 2007 to exchange relevant information in order to
assist in conceptualising the new integrated programme for South Africa. The
integrated programme will ensure the coherence and alignment of UNIDO
activities with the industrial strategy of South Africa.

At the Department of Science and Technology:

* UNIDO has assisted with the organisation of a technology foresight
training workshop and a trends conference based on the UNIDO technology
foresight programme.
* Discussions have been held on the development of activities in energy for
productive uses, energy efficiency in industry and renewable energies as well
as in biotechnology (taking into account the establishment of the third
International Centre for Genetic Engineering and Biotechnology Centre to be
based in Cape Town).

These examples highlight just some of the ways in which UNIDO with its
resources and worldwide experience remains uniquely placed to help and support
developing countries to address challenges of industrial development. We
believe that UNIDO can continue to play an important role in enabling our
region to become a major player in global trade and in the industrial
development arena.

I hardly need to remind UNIDO that life begins at 40! May the next 40 years
of partnership with UNIDO see Africa and the current developing world as a
whole; emerge as significant forces in global industrial development.

Happy birthday UNIDO!

I thank you!

Issued by: Department of Trade and Industry
28 November 2006