This is the first report on progress of the implementation of the Programme of Action under the newly reconfigured economic cluster Economic Sector and Employment Cluster.
The cluster constitute of the following Departments: Rural Development and Land Reform (Chair); Science and Technology (Deputy Chair); Agriculture, Forestry and Fisheries; Communications; Economic Development; Finance; Higher Education and Training; Labour; Mineral Resources; Public Enterprises; Rural Development and Land Reform; Science and Technology; Tourism and Trade and Industry
Progress report for the priority programmes of the cluster focuses on the following milestones:
* minimising the impact of the economic downturn on the country’s productive capacity as well as jobs
* Identifying opportunities for new areas of growth
* Economic participation and laying the basis to up-scale interventions to set the economy on a development path in order to deliver decent work and sustainable livelihood.
Speeding-up growth and transforming the economy to create decent work and sustainable livelihoods
Out of the twelve areas of the joint framework agreement for South Africa’s response to the international economic crisis, six have been concluded. These include:
* A national jobs fund of R2.4 billion to finance a training scheme for layoffs has been established
* South African Revenue Service (SARS) capacity has been strengthened to address high levels of illegal imports and customs fraud that results in thousands of job losses
* Support for distressed companies in the automotive sector, clothing and textiles sector; increased incentives for the manufacture of capital equipment, transport equipment and fabricated metal products linked to South Africa’s infrastructure development programme
* The Industrial Development Corporation has availed R6.1 billion over the next two years to support firms in distress due to the crisis. R993 million was approved for 15 companies an increase from R485 million for 14 companies during 2008/09
* The Competition Commission has stepped up investigations into and prosecution of firms in the food supply chain with Sasol, Tiger Brands, Foodcorp and Lancewood as examples
* The National Debt Mediation Association, initiated by business continues to assist indebted consumers.
Beyond these six areas identified for immediate intervention and implementation, we have begun to identify policy options to unblock the structural constraints that impact on the country’s ability to grow an economy that can create more jobs.
A three-year Industrial Policy Action Plan (IPAP) is being developed in consultations with cluster departments. The new IPAP expands the first plan with more focus on scaling up the industrial policy interventions to alter the structure of the economy that supports decent work and sustainable livelihood. Furthermore, the Automotive Production Development Programme (APDP) is facilitating the growth and development of domestic components including vehicle manufacturing.
The Automotive Investment Scheme (AIS), guidelines on the grant to both Original Equipment Manufacturers and component manufacturers is out for public comment. The scheme is meant to deepen the domestic automotive manufacturing industry. Work is also ongoing to explore opportunities in the medium and heavy commercial vehicle value chain.
The competitiveness programme for the clothing and textile sector was launched in April 2009. The architecture of a production incentive scheme aimed at preserving production capabilities and employment within the sector is nearing completion.
On the pharmaceuticals sector, we have received expressions of interest in the production of Active Pharmaceutical Ingredient (API) for the manufacture of ARV from potential foreign and domestic investors.
A presentation was made to the Ministers of Trade and Industry, Health and Science and Technology and high-level technical discussions with investors and the Industrial Development Cooperation is in progress.
On crosscutting industrial policy interventions, work is being undertaken to leverage procurement, trade policy, competition policy, research and development to support industrialisation. A draft trade policy was developed in partnership with key stakeholders including business and labour. The International Trade Administration Commission (ITAC) including on inputs industries is reviewing tariffs on a case by case to reduce input costs and to provide relief in the clothing sector.
Research and development work is underway to support technology development and the effective commercialisation of technological innovations. We have established Centres of Competence in areas of titanium; downstream fluorochemicals; battery technology; alternative energy; information security; medical devices as well as bio-composites. Out of the seven dishes Karoo Array Telescope (KAT), two have been fully assembled and work on the remaining five dishes is on track.
A joint Department of Trade Industry (dti)/Department of Public Enterprise (dpe) task team was established to enhance the competitive supplier development for the infrastructure build programme to support local procurement.
National Treasury is reviewing preferential procurement regulations to align with Broad-Based Black Economic Empowerment (B-BBEE) and local procurement.
A business plan is being finalised on the roll-out of Khula direct model to maximise the impact of small, medium and micro enterprises (SMMEs). A call centre to promote the 30 days payment of SMMEs was established in September at the Small Enterprise Development Agency (SEDA) offices.
Sustainable resource management and use
South Africa’s position papers for the post 2012 negotiations will feed into the Ad hoc Working Group under the Kyoto Protocol and the Ad hoc Working Group on Long-term Cooperative Action in preparation for negotiations at Copenhagen in December 2009; these are being consulted with stakeholders.
A task team was established to develop the green jobs proposals and coordinate various government initiatives. Proposals are being developed for the domestic manufacture of solar water heating geysers.
Comprehensive rural development strategy linked to land and agrarian reform and food security
Our priority is still on the expansion of employment opportunities beyond urban areas by fully exploiting comparative advantages of rural areas. This includes increasing agricultural activities and support, development of light manufacturing industries to increase value-add by rural economies and promotion of tourism related activities that will utilise indigenous cultural activities and knowledge.
The development of the Comprehensive Rural Development Programme (CRDP) is anchored on a three-pronged strategy: Agrarian transformation (increasing all types of agricultural production), rural development (improving economic rural infrastructure) and land reform (restitution, redistribution, land tenure and post-settlement), the CRDP undertakes rural development in three phases.
The first phase focuses on breaking the back of hunger at household level to meet basic human needs; the second is the entrepreneurial development stage, characterised by relatively larger-scale infrastructure development and whilst the third phase is characterised by the emergence of small, micro and medium enterprises and village markets.
The recent launch of the Muyexe in Limpopo on 17 August 2009, followed by the CRDP currently being piloted in all provinces is already contributing to the creation of work in the rural areas.
In conclusion the cluster will continue to meet its milestones albeit slower than expected due to the global economic challenges.
Issued by: Departments Rural Development and Land Reform
10 November 2009
