Z Mkhize: Local Economic Development Conference

29 November 2007

"Collaborative Local Economic Development Implementation for Sustainable
Economic Development"

Master of ceremonies
MEC for Local Government, Honourable MEC Mr Mike Mabuyakhulu
Mayors and councillors present
European Union Ambassador
HOD for Economic Development, Ms Carol Coetzee
HOD for Local Government, Ms Gabi Gumbi-Masilela
General Manager for Local Economic Development Mr Ranveer Persad
Municipal managers and representatives from government departments
Representatives from chambers and the entire business community
Ladies and gentlemen

Good morning. It is a pleasure to be here to officially open the Local
Economic Development (LED) conference for 2007. I want to say how optimistic I
am about the future of this province. This optimism has been sparked by the
sizeable number of stakeholders who are present today. This is a clear
indication that stakeholders involved in local economic development are
increasingly taking the issue of economic development more seriously.

This year's conference presents a wonderful opportunity to look at the type
of leadership we need to ensure the "Collaborative LED Implementation for
Sustainable Economic Development" in 2008.

Leadership for sustainable economic development

As the international community argues about the type of leadership needed to
deal with socio-economic challenges facing developing countries, I am always
reminded of what an internationally acclaimed author Marianne Williamson said
in one of her books:

"Our deepest fear is not that we are inadequate. Our deepest fear is that we
are powerful beyond measure. It is our light, not our darkness, that most
frightens us. We ask ourselves, who am I to be brilliant, gorgeous, talented,
and fabulous? Actually, who are you not to be? Your playing small does not
serve the world. There is nothing enlightened about shrinking so that other
people will not feel insecure around you. We are all meant to shine, as
children do. And as we let our own light shine, we unconsciously give other
people permission to do the same. As we are liberated from our own fear, our
presence automatically liberates others."

What does this mean: It means that all of us here have the opportunity to
shape the future of this province. Today's South Africa is characterised by the
unique aspirations of the newly found rainbow nation. The rainbow nation
demands a new model of leadership.

South Africa's transaction to democracy has given its citizens the power to
influence and direct the direction of this country. This signals the need for a
new approach: an approach which requires today's leaders to define development
priorities, plan for the attainment and collaborate in their implementation.
Therefore, in the next few months if you ask anybody in KwaZulu-Natal how they
would like to make a difference in the provincial economy, we want to hear only
four words: "collaboration", "good governance", "employment", and "growth". The
push for this unprecedented level of social and economic transformation is a
struggle on its own. It is therefore proper and fitting that on an occasion
like this we remind each other that the struggle is not over yet. It is also
critical important to remember that there are those who made an exceptional
contribution towards the liberation of this country, paving the way for a
stable political and economic environment. We are gratefully that their efforts
were not in vain but the greatest responsibility is ensuring that future
generations reap the fruit of their selfless contribution.

KwaZulu-Natal boats the busiest port and largest deepwater port on the
African continent and in the world over in terms of cargo volumes. In addition
this province has:

* a transport infrastructure which provides an easy link to Mozambique, East
Africa, Asia and Europe
* bioclimatic profile suitable for lucrative agricultural production
* largest sand mining and mineral processing operation in the Southern
hemisphere
* the world largest smelter
* vast prime industrial land along the coast and further inland
* good size of Business Outsourcing Processing market with the fastest growing
call centres in Africa. In fact, figures on installed base show that South
Africa boasts call centres more than two times of Ireland. Leading
multinational corporations such as Barclays and Lufthansa have established
centres in the country.

These features provide an excellent vehicle to develop a new cadre of
entrepreneurs who will ensure that future generations benefit from the
province's robust infrastructure and stable business environment created by
this democratic government. I believe that this year's conference will assist
in developing a strategy to guide the way forward.

There is no cap at all on the point where we should stop our struggle. As we
begin this conference my message to you is very simple: struggles are led by
great leaders. The primary responsibility of these leaders is to make a
positive impact in their communities. What distinguishes these leaders from
others is that they have a sense of urgency. Transparency and Quality economic
governance approaches are infused into their operations. These are the two
pillars of a healthy business environment.

Globalisation and development

The new modes of economic production are increasingly dependent on knowledge
and information technology. Knowledge and 'informationalism' has become central
to globalisation, and to development. The sources of productivity and
competitiveness are increasingly dependent on knowledge and information being
applied to productivity. The increasing generation and accessing of knowledge
has led to what is often referred to as the 'knowledge society' in globalised
world.

I would like to draw your attention to the report released by the World Bank
in December last year on how globalisation will shape the global economy over
the next 25 years. The report predicts that the global economy could expand
from $35 trillion in 2005 to $72 trillion in 2030. While this outcome
represents only a slight acceleration of global growth compared to the past 25
years, it is driven more than ever before by strong performance in developing
countries.

Yes indeed, South Africa's economic performance is encouraging. It is worthy
noting that:

South Africa's unadjusted real Gross Domestic Product (DGP) at market prices
for the first quarter of 2007 increased by 5,4% compared with the first quarter
of 2006.

The corresponding increase for the respective quarters of 2006 were 4,6%,
4,4%, 4,7% and 6,2%, yielding an annual growth rate of five percent in real GDP
at market prices.

Record expansion in construction activity helped South Africa's (GDP) grow
by 4,7% in the first quarter of 2007, making it 34 consecutive quarters of
economic growth since 1998, the longest upswing in the country's history.

Stats South Africa reported on Tuesday this week that the country's economic
growth has increased to 4,7 percent in the third quarter of this year, up from
a revised figure of 4,4 percent in the second quarter.

The annualised quarter-on-quarter growth in real gross domestic product
(GDP) has increased to 4,7 percent in the third quarter of 2007, up from the
revised figures of 4,4 percent in the second quarter and five percent in the
first quarter.

The World Bank Report further notes: Broad-based growth in developing
countries sustained over the period would significantly affect global poverty.
According to the report the number of people living on less than $1 a day could
be cut in half, from 1,1 billion now to 550 million in 2030. However, some
regions, notably Africa, are at risk of being left behind. Moreover, income
inequality could widen within many countries, compounding current concerns over
inequality between countries.

It is for this reason that provincial government is employing every method
to accelerate and sustain economic growth. That is the only way we can make
substantial progress towards reducing poverty.

Gijima, to accelerate and sustain the local economic development

The Gijima KwaZulu-Natal Local Economic Development Support Programme,
embodying our partnership with the European Union, has made significant
progress towards stimulating economic development. Since the last LED
Conference, almost all of the grants funds available (i.e. R162 million) have
been committed to 197 projects. The Local Competitiveness Fund is fully
subscribed while there is R11 million that remains in the Business Enabling
Fund. This will be absorbed in a final call for proposals next year – should
the EU agree.

The programme has leveraged over R80 million in co-funding from the private
and public sectors. The excellent partnership we have had with all our
stakeholders, especially the commercial banks, district municipalities and the
business sector has enabled the leveraging of co-funding.

With regard to the Local Competitiveness Fund Implementation more than 3 000
sustainable jobs and 7 000 temporary jobs will be created directly, excluding
any multipliers.

The programme has enabled the development of a pipeline of LED projects
through the use of the grant instruments. The emphasis in the Business Enabling
Fund and Local Competitiveness Fund has enabled many different groups to engage
in detailed planning for their projects. It is expected that many of these
projects will be seeking implementation funding or finance in the open market
place.

We are currently examining the future of Gijima KwaZulu-Natal in terms of
its continuation and sustainability after the European Unions funds have been
exhausted. Proposals on the modalities regarding its future form and resources
required are currently being prepared. It is expected that a revised programme
will be ready for implementation in the 2009/10 financial year.

Skills revolution to grow the economy and enhance service delivery

Underlying the growth that I have referred to earlier on will be our ability
as the province to create skills necessary to manage sectors that will create
growth. We need a strong partnership with tertiary institutions to ensure that
skills are produced for the economy to grow and that service delivery at local
level is improved.

Much has been said this year about skills shortage but all what I want to
say today is that an educated populace provides a broader base from which to
recruit employees. Local government is at the forefront of service delivery
therefore you have to define for yourselves how you will contribute to the
attainment of a skilled workforce.

The KwaZulu-Natal Local Government Association Youth Project, collaboration
between the University of KwaZulu-Natal and the local-government sphere is a
classic example. This collaboration brings direct and indirect benefits to the
university, students, local government and the community.

This project was designed to enable students to critically engage in focus
areas in communities to allow local government to address problems of
historical service backlogs. It provides students with an opportunity to
develop expertise and technical knowledge on how to ensure the provision of
basic services to the community.

Students are placed in disadvantaged communities of selected district and
local municipalities and tasked to research and develop ideal strategies to
respond to socio-economic challenges in the focal areas provision of quality
healthcare, provision of sanitation, youth development, small business
development and most importantly Black Economic Empowerment. I hope in 2008,
more municipalities will embrace this project.

Conclusion

In year 2000, world political leaders of 191 nations at the United Nations
agreed to a set of targets for the socio-economic development. They set out a
set of indicators to focus their energy and efforts in order to eradicate
poverty by 2015. The Millennium Development Goals (MDGs) are a universally
recognized benchmark for development, and the performance of each country is
measured against a set of eight targets agreed by the world's political leaders
in the Millennium Declaration.

You would acknowledge that about a decade and half ago, it would be
unimaginable that there would be peace and stability in this province. But
because of political leadership a number of new milestones in the province's
transformation were achieved.

Ladies and Gentlemen, time is ticking.

If ever there were a time for the leadership in KwaZulu-Natal to stand up
and chart the way forward, it is now. We need leaders who are able to galvanise
unprecedented efforts to achieve MDG.

In 2005 the international community said at the current rate the right to
education will not be established in Africa until 2130. The eradication of
hunger and poverty will not be met until 2150.

For the next few years the world will be focusing on KwaZulu-Natal following
the hosting of the preliminary draw for the 2010 Federation International
Football Association (Fifa) World Cup. KwaZulu-Natal did not disappoint and the
international media remarked: "The show had certainly lived up to its promise,
Africa is the theatre and South Africa is the stage".

Going into the future we will be judged on what contribution we are making
towards achieving MDG. Certainly, as leaders, we have no reason to allow a
prolonged vulnerability of the poorest citizens to man-made misfortunes such as
disease and poverty. I ask that you to come up with creative solutions for the
attainment of some MDG:

* eradication of extreme poverty and hunger
* promotion of gender equality and empower women
* combating disease
* ensuring environmental sustainability
* creating a Global Partnership for Development.

Thank you.

Issued by: Department of Finance and Economic Development, KwaZulu-Natal
Provincial Government
29 November 2007
Source: KwaZulu-Natal Provincial Government (http://www.kazulunatal.gov.za)