P Mlambo-Ngcuka: World Jewellery Confederation (CIBJO) Congress

12 March 2007

Deputy Minister of Trade and Industry, Dr Rob Davies
Under-Secretary of State, Ministry of International Trade of Italy, Mr Mauro
Agostini
Dr Hanifa Mezoui of the Department of Economic and Social Affairs, United
Nations
Captains of industry in South Africa and internationally
Chairman of Jewellery Council of South Africa, Mr. Abbey Chikane,
Distinguished guests,
Ladies and gentlemen

Introduction

It is a pleasure to deliver this address at this 81st International
Jewellery Congress. We take pride in the fact that this is the first time that
South Africa is hosting the event. We trust that you will experience the
friendly and warm atmosphere that our country and its people have to offer.

The congress is an important occasion for the jewellery community of South
Africa, the continent and the world. We are hosting Platinum Group Metals
(PGMs), chrome, vanadium, manganese and alumina-silicates. These natural
resources combined with valuable human resources provide South Africa with the
potential to grow rapidly and emerge as a leading player in the global
economy.

Although mineral resources have contributed significantly to the country's
overall economy, mainly through the export of minerals, we have not enjoyed the
full benefits of our mineral economy and on sustainable economic growth and
development in South Africa. This is largely due to the insufficient value
addition of mineral resources as a result of an underdeveloped minerals
processing industry.

For this reason, the government has put in place measures to increase our
capacity to produce processed mineral products and value added minerals with
the added benefits that comes with it. A policy that accepts that the world of
mineral beneficiation, be it for jewellery and all other purpose, the
competition is tough and we have to make choices and create an enabling
environment. We also have to see opportunities and seize them. With our growing
construction inputs, there is an opportunity for growing the capital goods
sector.

1. Accelerated and Shared Growth Initiative (AsgiSA)
Furthermore, our vision is to develop an inclusive economy, by ensuring that
while we have a growing economy we also work much harder to address the
inequalities in our society through shared growth

The South African Government through its Accelerated and Shared Growth
Initiative aims to reduce poverty and unemployment by half in 2014. We have
more than 10 million young unskilled people with 12 years and less of schooling
to focus on in the short term. If our democracy is to work it is with them, in
the first place, with whom the growth must be shared. They are in the main aged
between 20 and 35 years and most have never had a job. They are able bodied and
trainable. They need government and private sector to partner and to intervene
decisively for them to enter the labour market.

We need to enter the labour market to serve this large pool of our poor
young citizens on whom the future of this country depends, to accelerate the
growth of the economy at over six percent of the Gross Domestic Product (GDP)
that will enable jobs to be created for that purpose. We have adopted AsgiSA,
which targets minimum 6% of GDP growth per annum by 2010.

In AsgiSA, we have isolated constrains to the shared growth. They
include:

1. Volatility of currency. We favour a competitive, stable currency without
too much interference we seek to reduce the volatility of the currency, and to
ensure that fiscal and monetary policy work together to produce an exchange
rate that is good for exports.

A competitive exchange rate will be good for our jewellery to export and to
attract greater numbers of tourists - thousands who can also buy jewellery in
South Africa.

2. Shortage of suitably skilled labour
The shortage is experienced by many of our industries. The jewellery industry
in South Africa also suffers from skills shortages. The country has a surplus
of a trainable pool of young people, and wants to enter the formal economy and
be in this industry. Skills shortage is the biggest problem constraining
growth. We have many vacancies in the economy and in government that we cannot
fill because of the lack of skills and yet we have much unemployment.

We need solutions to fast-track skills acquisition by those with some post
secondary education and to improve public education access and through-put for
those in schools.

We are always seeking opportunities to place young people for internships in
all sectors and some of you could hopefully consider taking in our
youngsters.

3. Increasing manufacturing
Amongst our identified binding constraints is also a low volume of manufactured
export. Jewellery in South Africa is going to go some way in addressing this
binding constraint.

South Africa is still one of the largest exporters of gold and most of which
goes to jewellery, a significant diamond producer and is the largest producer
of platinum, providing 75% of the world demand, yet our jewellery industry has
less than 1% of the world market. We can do much better than this.

The jewellery industry, as a downstream industry, is ideally placed to
contribute to job creation and economic growth. The industry is in large parts
labour intensive and could be a contributor to social and economic development.
We recognise direct jobs are not in millions but we welcome the thousands and
the indirect jobs. We thank you all for working with us in making these
changes.

4. Infrastructure
Infrastructure is yet another binding constraint and challenge that is the
social, economic and industrial infrastructure. Our growing economy, which has
performed at modest 3% for a decade from negative growth before our democracy,
is now at 5% of GDP and that has made lots of demands on our infrastructure,
Information and Communications Technology (ICT), roads, rail, ports, harbours,
airports, and more. All of which need skills.

5. Small, Medium and Micro Enterprise (SMME) developments
Even though our largest manufacturers are responsible for the vast majority of
export and consumption of precious metals in the country, the Jewellery
Industry in South Africa comprises largely of small, medium and micro
enterprises. When looking at this sector in terms of contribution to GDP and
employment parity, it is under performing. The support for SMME is inadequate
from both government and big business. But we now have plans that I am sure
that other ministers will share.

Through AsgiSA, government and private sector is looking at various
programmes to encourage SMME development and growth.

6. Efficiency and capacity of the State
In AsgiSA, we also refer to the importance of efficiency, and capacity of the
state. In the case of Jewellery industry an efficient state must, amongst
others, make sure there are no blood diamonds that together we root out corrupt
elements in government and in the industry for the good of all of us.

7. Sector development
In accelerated shared growth we also have identified and key sectors for
growth, which we must support, they include Business Process Outsourcing (BPO)
and ICT bio-fuels, tourism, mineral processing, forestry, the creative
industries and more of these will be prioritised in our unfolding industrial
strategy.

This strategy will not only grow our first economy but they can bridge the
gap between the first and second economy. That is those who are in the
mainstream and those in the fringes of society. The 10 million and more people
in South Africa economic margins must access quality, public education, which
must equip them for a brighter future hence the significant increase on the
education budget.

Assisting young people to enter the labour market so that we decrease the
number of young people who reach 35 years without ever getting a job. This
industry can do its bit. Government needs to work with all other sectors to
make it easy to do business in South Africa without abandoning our obligations
to the poor.

We consider the jewellery industry an important industry and we want to see
it grow from strength to strength. I wish you well in your deliberations.

I thank you.

Issued by: The Presidency
12 March 2006
Source: The Presidency (http://www.thepresidency.gov.za)