T Mbeki: Chambers of Commerce and Industry South Africa AGM

10 May 2006

The President of CHAMSA, Patrice Motsepe
The CEO of CHAMSA, Sipho Mseleku
CHAMSA office bearers,
Distinguished guests,
Ladies and gentlemen

It is indeed an honour and privilege for me to be here tonight among so many
of our compatriots, representatives from government, labour and the business
community and be honoured in such a gracious manner with this very special
CHAMSA Presidential award.

I accept the Presidential Award on behalf of government and the people of
South Africa and in a spirit of partnership between government and business. We
are indeed very happy that CHAMSA has continued to grow in strength since the
Afrikaanse HandelsInstituut (AHI), Foundation of African Business &
Consumer Services (FABCOS), National African Federated Chamber of Commerce
(NAFCOC) and South African Chamber of Business (SACOB) came together in October
2003 to take the cause of business development forward by establishing a united
chamber movement.

Earlier this year, in the State of the Nation Address, we said that we have
entered the Age of Hope and that our people are highly optimistic about their
own future and that of our country.

As we said then, according to a survey conducted by Gallup International,
65% of our people believe that the country is going in the right direction, 84%
think that our country holds out a happy future for all racial groups, while
71% believe that government is performing well.

With regard to the economy, the Business Owners Survey said that 80% of
South Africa’s business owners are optimistic about 2006, making them the third
most optimistic internationally. Further, other business and consumer
confidence indices also indicate that confidence in the economy is at an all
time high.

Nevertheless, South Africa is still characterised by the divide between the
First Economy and the Second Economy operating side by side. As we know, that
Second Economy is defined by underdevelopment and lack of access to finance and
other necessary resources. This means that this Economy is incapable of
self-generated growth and development. And yet a large number of our population
operate within this Second Economy, involving the poorest of our rural and
urban populations.

At the same time, as businesspeople, you know that there are multiple
forward and backward links between the formal and informal economic activities.
Research on informal clothing manufacturing, for instance, demonstrates that
manufacturers who operate in the formal economy source some of their inputs
from the informal sector, and of course, sell the completed garments in formal
retail stores.

In addition, most street traders source their goods in formal shops. And
there is substantial evidence of a growing process of previously formal work
being carried out in the informal economy. This includes such sectors as retail
manufacturing (involving food, clothing, metal fabrication and engineering),
catering and accommodation, construction, transport and even mining.

It may well be that these links between the formal and informal economies,
between the First and Second economies, are mutually beneficial and may be
saving costs, particularly for those operating in the formal sector.

However, this situation offers us some important opportunities and
challenges such that, rather than viewing the divide between the two economies
as some unbridgeable Chinese Wall, we should consciously work to formalise the
linkages that already exist and use them as a basis to incorporate the informal
sector into the entire formal economy, to raise the standard of living of those
currently caught within the informal sector.

It was for this reason that our Deputy President, Phumzile Mlambo-Ngcuka,
called on those operating in the First Economy to join in the effort
spearheaded by the Accelerated and Shared Growth Initiative for South
Africa(AsgiSA), which among other things, should help us to bridge the gap
between the First and the Second economies.

Since we launched AsgiSA, government has been hard at work to elaborate the
specific interventions that will drive the imperatives of this initiative, one
of whose ultimate outcomes must be to help halve unemployment and poverty by
2014.

I wish to reiterate the appreciation of government for the participation of
the private sector, the trade union movement, women, youth and civil society in
the formulation of AsgiSA. Indeed all our people must own this initiative and
be the long-term beneficiaries of accelerated and shared economic growth,
enterprise and skills development.

Chairperson,
We have said that we have entered the Age of Hope because of the many advances
we have made in a relatively short space of time, as well as the many and good
prospects and opportunities that have been made possible by the foundations for
accelerated progress, which we have laid during the last 12 years of
democracy.

The economy is performing well, with the promise of even higher levels of
growth. Yet, we know that both unemployment and poverty are still at
unacceptable levels. We also know that the benefits of our economic growth are
not shared equitably among the citizens of our country.

Clearly, one of the most critical constraints to a speedy and visible dent
on unemployment is the matter of skills. Accordingly, an important part of
AsgiSA is the Joint Initiative on Priority Skills Acquisition (JIPSA).

All of us will agree that if we fail in our efforts at human resource and
skills development, AsgiSA will fail. As the Deputy President said the launch
of JIPSA, “nothing short of a skills revolution by a nation united will
extricate us from the crisis we face”.

In this regard, government has mobilised all the departments as well as the
state-owned enterprises to focus on the central task of skills development. It
is very important that sectors of our society, including the private sector,
universities, the Further Education and Training (FET) Colleges and our
schools, should also direct their energies and resources towards this challenge
of skills development so that the common drive helps our country to realise its
potential for the creation of a society that is fully developed and
prosperous.

Undoubtedly, the private sector has an immediate interest in these efforts
because it makes business sense to have a large pool of skilled workers. Our
success in this regard will also assist to meet the objectives of our Broad
Based Black Economic Empowerment (BBEE) and help ensure that we raise the
incomes and standard of living of our working people.

Organised labour also has an important role to play in this regard. We must
therefore salute the trade union movement for its readiness to work together
with government and business to secure training for quality jobs as well as
enhance productivity, given the challenge we face constantly to increase our
international competitiveness.

In addition, as we know CHAMSA’s mandate includes active intervention for
and on behalf of micro and start-up businesses to become a contributing force
in our economy, particularly those located in the rural areas and townships,
primarily in the Second Economy.

Clearly, this kind of active intervention for such enterprises will make an
important contribution to the facilitation of the elevation of the Second into
the First Economy.

Today, most of our economic activity is concentrated in a few metropolitan
areas while the rest of the country lacks the necessary levels of such economic
activity. This means, among other things, that access to markets and business
opportunities are limited in the rural areas, townships and small towns.

One of the negative consequences of this situation is a lack of an
entrepreneurial culture in many communities due to exclusion and the historical
imbalances that continue to characterise our society.

We also experience a real lack of information and business support for most
of these communities, due to the centralisation of such support to urban
centres.

As we all know, the result of all this is that many of the rural and
township communities live in typical subsistence economies. This signifies the
reality of an acute shortage of the required capacities to achieve development
especially entrepreneurial, technical, managerial and supervisory, as well as
business leadership skills.

I must therefore express government’s appreciation for the close
collaboration between CHAMSA, the Department of Trade and Industry and its
Small Enterprise Development Agency (SEDA), to further the objectives of Small,
Medium and Micro Enterprises (SMME) establishment and development.

Chairperson,
One of the mandates of CHAMSA is to advance economic transformation and promote
business networking and co-operation among all business communities in South
Africa, Africa and abroad on behalf of the chamber movement as a whole and in
particular its constituent members, the AHI, FABCOS, NAFCOS and SACOB.

The major stakeholders in the economy have indeed expressed their desire and
vested interest in the success of CHAMSA in fulfilling its mandate of becoming
the representative voice of business chambers in South Africa. Our government
is equally anxious to see CHAMSA succeed in this regard.

Further, we all encouraged by the role that CHAMSA is playing in forging and
strengthening links with similar sister bodies in many countries in our region
and continent, as well as the rest of the world.

We are also very happy that CHAMSA represents the South African business
community in regional and bilateral business bodies and plays a leading role as
the national chamber, acting on behalf of South African business in
multilateral forums.

In this context, I must say that Africa’s Renaissance cannot be realised
without the full and active participation of our business community. As we have
said in the past, given the relative strength of the South African business
sector, it is expected that we should play an important role in helping the
regeneration, development and growth of business on our continent.

I am aware that there are a number of South African businesses that have
taken the initiative to invest and operate in different countries of our
continent. Most of these companies report positive returns from their
investments.

In this regard, we are very happy and encouraged that CHAMSA is hosting the
Permanent Secretariat of the Association of Southern African Development
Community (SADC) Chambers of Commerce and Industry (SSCCI), which plays a
central role in facilitating the work and programmes of chambers in our region
to assist businesses and government in our region in our joint efforts to
expand our individual as well as the regional accompanies.

Many South Africans are aware of the work that our government is doing in
the Democratic Republic of Congo (DRC) to assist that sister country to achieve
democracy and a stable peace. However, few of our companies know about the
equally important role played by CHAMSA in establishing the SA/DRC Business
Council here in South Africa and subsequently in the DRC, during the course of
2005.

This you have done, conscious of the fact that it will be difficult for the
South Africa economy to develop and grow in the midst of regional economies
that are stagnant and declining. We therefore thank you for the work that
CHAMSA is doing to address the important issue of balanced regional
development.

Chairperson, all of us agree that a broad base, multi-sectoral and
integrated economic development drive is required to address the mass of
business expectations in our economy. Many of us believe that CHAMSA is ideally
positioned to play an important role in this regard.

In developing a strong, prosperous and job creating economy, CHAMSA in
collaboration with its sister organisation BUSA, are strong partners of
government and business, but also the international business community seeking
access to the opportunities our country provides. Clearly, any victories scored
by CHAMSA would therefore be victories that also accrue to all the people of
this country.

I therefore wish CHAMSA success in its future work. We trust that its
partnership with government and other stakeholders will continue to strengthen
in the years ahead. Once more I would like to thank you most sincerely for the
Presidential Award and wish you a successful annual general meeting.

Thank you.

Issued by: The Presidency
10 May 2006
Source: SAPA