The Chairperson
Deputy Speaker
Honorable MPs
MECs
Mayors
Councillors
Distinguished Guests
Ladies and Gentlemen
The international economy is at its lowest ebb. It is not the best of economic times that we currently work and live under. The economy continues to shed jobs. More and more people are thrown into the clutches of debt traps and grinding poverty.
In South Africa the multiplicity of challenges continues to place impediments on our growth path. The nexus of unemployment, poverty and inequality remain the greatest threat to achieving desired economic growth. The situation has not been made any better by the recent wild cat strikes in our mines which unfortunately led to the loss of lives. These strikes are an expression of a deep-seated disgruntlement and also a reminder of an urgency with which we have to attend to the issues of economic transformation and development in this country.
However, we have steered the economy such that the country and its citizens have been effectively cushioned against the devastating effects of the global meltdown. This was and still is made possible by the strict fiscal regime and policies that we implemented. The budget deficit was reduced and the economy achieved a steady growth between 1994 and 2009. We are certain that the policies we pursue place us in a better position to further steer our economy on a new growth and development trajectory.
But the reality that we still have to contend with is the intricate relationship between race, class and wealth. This complex reality is historical and political in our country. Discrimination and brutal apartheid policies exalted falsely the racial virtues of the white while debasing and discrediting those of the black majority resulting in a creation of a class stratum that had an exclusive access to economic benefits and wealth creation.
As a result, the new democratic government has had to introduce policies that will help to propel the nation to new economic heights while working towards the reduction of the prevailing wealth and inequality gap amongst our people. In pursuit of this end, we have had to implement various mechanisms and policies. In the main our interventions were largely shaped by a rigorous pursuit of macro-economic policies which helped to stabilise the economy that was profusely bleeding, due to economic ineptness of the apartheid regime.
In our zeal to balance the economic benefit scale, we advanced, within the macro-economic framework, Preferential Procurement and Black Economic Policies. These policies as transformation tools have plausible merits but made to look like ill-conceived and ineffective mechanisms by implementing agents. To a large degree the public perception is that these policies have been only successful in as far as creating a new enclave of Black millionaires while the majority remains stuck in the doldrums of poverty and hunger. True or false these perceptions may be but they speak volume about a need to review our economic approaches and policies such that they begin to empower and benefit all our people regardless. We need to turn the economic tide so that the communities we serve can enjoy sustainable development and economic growth.
Inspite of the perceptions and some shortcomings, we have been able to implement programmes and policies that create economic opportunities for our communities. Through the EPWPs we have been able to create job opportunities and grow local economies that benefited communities in which these programmes were implemented. In many of our communities we have encouraged and supported the establishment of cooperatives across the economic sectors. These have been effective in empowering the locals and thus improving their social conditions.
Today, according to Stats SA Census Report, about 85 % of our people have electricity in their houses and 46.3% and 77.6% have piped water and formal dwellings. This report highlights the commitment of South Africa to implement policies that amongst others create economic opportunities and result in the improvement of conditions. These are facts that points to the fact that if we focus our energies as the nation much can be achieved for the benefit of our people.
In response to the high level of unemployment and poverty, the South African government developed the New National Growth Path which aims at creating about 5 million jobs by 2020. The New National Growth Path posits that in order to create about 5million jobs, the country needs an economic growth of about 7 percent. This by any means can be achieved if we collectively pursue strategies and interventions that are sound and implementable.
However, while we implement policies aimed at changing the status qou, it has become clear that our economic growth is by and large dependent on the investment in infrastructure projects and the revival of manufacturing sector.
As late as the 1990’s, South Africa has been de-industrialising compared to other emerging economies such as Malaysia, Brazil, Mexico, China and India. As a consequence of this, the country lost its critical capacity to manufacture and compete at a global level. The erosion of our competitive advantage on critical sectors of the economy such as Machinery and Equipment, Clothing and Textile sector amongst others has stifled growth and development.
Through the introduction of the New Growth Path and the development of the Local Procurement Accord, South Africa intends to reduce imports and encourage the use of the local content to ensure that jobs are being created and poverty and unemployment reduced. The Local Procurement Accord sets an inspirational target of 75 percent local procurement and identifies a number of immediate steps that will be taken by the social partners towards achieving the goals as part of the efforts to increase jobs and deepen industrialisation. The adoption of the Local Procurement Accord was applauded and regarded as a boost for the local industry and the creation of jobs.
In a nutshell, the new economic growth trajectory that the country requires will be realised if sound policies are implemented religiously by those responsible and communities are placed at the centre of such programmes. As a country, we have beautiful policies that demands for urgent operationalisation in order to bring and benefit everyone from the mainstream economy.
Dankie. Ngiyabonga
