Gauteng Business Barometer
20 June 2006
Gauteng Business Editor, Ryk van Niekerk,
Representatives of Standard Bank,
Lincoln Mali, Gauteng Provincial Director,
Chief Economist, Goolam Ballim and Roy Ross Director of Distribution and
Wealth,
Tariq Issel from Media 24,
Economist Mike Schussler,
MEC for Finance and Economic Affairs, Paul Mashatile,
Gauteng heads of departments and agencies,
Representatives of Busa, Chamsa and Nafcoc,
Gauteng academics and members of the media,
Distinguished guests,
Ladies and gentlemen;
One of Gauteng's important strengths as the country's economic engine room
lies in its ability to innovate and to apply knowledge to create new products
and services. The Gauteng Business Barometer which we are launching today is
one such home grown innovation. It represents another first for our province as
the country's first provincial business barometer, which reflects a wide range
of economic factors. It will give us an important insight into the workings of
the Gauteng economy and will be of value to both the private and public
sector.
The sustained high levels of economic growth we are seeing in Gauteng today
can in large measure be linked to the policies and strategies that we have
implemented as government. At a political level we have been able to build
confidence through building a strong, stable and competent government which has
upheld the principles of good governance, accountability and transparency. We
have been able to demonstrate our ability to address their socio economic needs
and to make Gauteng an even better place for all. Our track record of
consistent delivery and steady progress in fulfilling our commitments is
unquestionable.
Our sound and often bold economic and social policies have increasingly
attracted the attention of local and international investors, multi national
companies seeking an entry into Africa, professionals and other skilled people,
unemployed people, innovators, entrepreneurs, tourists and others who wish to
be part of Gauteng's economic success story and take advantage of the growing
economic opportunities that it has to offer. These too have contributed
immensely to heightened economic activity in our province.
We have sought to maintain an appropriate balance between addressing the
social needs of our people and attempting to alleviate the suffering caused by
poverty and deprivation and investing in our future by putting in place
measures to stimulate economic growth, job creation and meaningful economic
opportunities for all.
We have avoided a "welfarist approach" which provides for social needs but
neglects to build the productive capacity of the economy and is therefore
unsustainable in the longer term. We have also steered clear of the "trickle
down approach" in which a minimalist state adopts a hands off approach in the
belief that market driven economic growth on its own will automatically improve
the conditions of the country's people.
We have instead positioned ourselves as a developmental state in which the
state actively intervenes to address past imbalances and the unequal
distribution of income and wealth and drive socio economic development.
The foundations of the economic growth which we are seeing today were laid
in the late 1990s. It was then that we began to develop a strategy to stimulate
private investment in the tertiary sector of the economy and create jobs
particularly in areas such as business tourism, logistics infrastructure,
manufacturing and Information Communication Technology (ICT), with a particular
focus on increasing the knowledge intensity of the economy.
Through Blue Intelligence Quotient (IQ), we invested over R2,8 billion in
strategic economic infrastructure projects in Gauteng between 2001 and 2005.
These are by now well known and include a range of what are today successful
projects in business tourism, logistics infrastructure, manufacturing and
ICT.
Our interventions have helped grow the tertiary sector and responded to the
Gauteng economy's inevitable shift away from its historical reliance on the
extraction and export of primary products such as minerals and mining
commodities. According to Statistics South Africa (Stats SA) in the period 1996
to 2004 primary industries as a percentage of gross domestic product dropped
from 4,6 percent to 2,3 percent. Tertiary industries on the other hand
increased from 58,4 percent to 62,3 percent in the same period. Much of this
was attributable to growth in finance, real estate and business services which
increased from 16,1 percent to 21,4 percent.
Despite our successes we are constantly aware of the challenges we continue
to face in our province in addressing unemployment, poverty and
underdevelopment. Given that Gauteng is responsible for over a third of the
country's Gross Development Product (GDP), we have a considerable
responsibility in helping to ensure that we contribute to the achievement of
the country's objectives of halving poverty and unemployment by 2014. Following
our re-election in 2004 we therefore developed a Growth and Development
Strategy (GDS) which would enable us to achieve an eight percent growth rate by
2014 and ensure that the benefits of this growth were shared among a broader
section of the population.
The Gauteng Growth and Development Strategy (GGDS) which is in line with the
national Accelerated and Shared Initiative for South Africa (AsgiSA)
initiative, was adopted in April 2005 after extensive research and consultation
with a range of stakeholders in Gauteng including business and labour. Among
its aims are:
* provision of social and economic infrastructure and services to build
sustainable communities and contribute to halving poverty;
* accelerated labour absorbing economic growth that increases annually and that
will create long term sustainable jobs and contribute to halving
unemployment;
* sustainable socio economic development;
* enhanced government efficiency and co-operative governance;
* deepening participatory democracy, provincial and national unity and
citizenship.
Among the key mechanisms identified to give effect to the strategy were
investment and support in targeted economic growth sectors including:
* smart industries including ICT and pharmaceuticals;
* trade and services including finance and film;
* tourism;
* agriculture including agro-processing and bio-technology;
* manufacturing including steel related industries, automotive parts and
components, beer and malt;
* infrastructure expansion and investment.
In addition the strategy identified support for small, medium and micro
enterprises (SMMEs), broad-based black economic empowerment (BBBEE) and skills
development as central to the achievement of our objectives.
Since the launch of our strategy we have made important progress in
implementing the strategy including:
* the launch of the Gauteng Agricultural Development Strategy (GADS);
* the launch of a BBBEE strategy which will see at least 70 percent of GPG
contracts being awarded to BBBEE companies by 2009;
* the launch of the Gauteng Enterprise Propeller (GEP) to provide financial and
non-financial support for SMMEs;
* the development of a Gauteng Human Resource Development strategy to ensure
that we have the necessary skills to drive economic growth and social
development;
* the adoption of a strategy to stimulate the creative industries sector and
the development of a strategy to make Gauteng a home of competitive sport to
take advantage of these sectors' massive growth potential.
In addition, provincial and local government in Gauteng have agreed on a
strategy to build Gauteng as a globally competitive city region. This makes it
imperative for the three spheres of government and other stakeholders to work
together in a manner that is mutually beneficial that improves the efficiency
and performance of the Gauteng economy and enables the region to compete more
effectively in the international arena. It requires a common approach to
dealing with urgent and complex choices needed to build an economically
efficient and social equitable city region.
Global city regions are becoming increasingly important in the national and
global space economy. We need to move beyond administrative and jurisdictional
demarcations to better understand the functional economic geography of the city
region, including how the different components relate to each other their
comparative and competitive advantages and how people capital flows and
business linkages shape the regional economy.
Our projections are that by 2015 Gauteng will have a population of around
14,6 million making it among the largest metropolitan settlements in the world.
To prevent a situation where population pressure overwhelms our development we
are developing perspectives and strategies which aim to ensure that we are
ahead of these challenges. The global city region perspective is one such
perspective that aims to improve economic efficiency and integrated planning so
that we are able to continue to boost economic growth and economic
opportunities in a manner that is able to address social needs.
Among the priority areas for improved co-ordination, efficiency and planning
include:
* safety and security;
* transport infrastructure and authorities;
* integrated safety and transport system;
* sustainable human settlements;
* regional branding, investment and tourism promotion;
* infrastructure provision and;
* the environment and sustainability.
We are therefore confident that even if there are signs of a slowing down in
our growth rates the overall upward trend in the growth of the Gauteng economy
is here to stay. It is up to all of us, the private and public sector to make
this a reality.
I thank you!
Issued by: Office of the Premier, Gauteng Provincial Government
20 June 2006
