Address by the MEC for Economic Development and Tourism Mr Michael Mabuyakhulu on the occasion of the KwaZulu-Natal Chapter of the Productivity Awards held at the Inkosi Albert Luthuli International Convention Centre

Programme Director
The CEO of Productivity SA Mr Coka
The leadership of Productivity SA
Business delegates
Nominees

Ladies and gentlemen; all protocol observed

On behalf of the government of KwaZulu-Natal, we wish to express our pleasure at being part of this very auspicious occasion wherein we have come to honour those who have excelled in various fields of growing our economy thereby contributing to our regional and global competitiveness.

Awards  ceremonies  are,  by  their  very  nature,  filled  with  excitement  for  they  present  an opportunity for those who have excelled in any given field of endeavour to be publicly acknowledged. Critical to this is that this acknowledgement occurs in front of one’s peers and, as a result, propels others who may have had doubts about their capabilities to work even harder to emulate the victors.

In a nutshell, awards ceremonies, remind us, in any sphere of life, that no goal is unattainable. Indeed, therefore, we are honoured as the Department of Economic Development and Tourism to be part of this occasion.

Programme Director, the economic sphere of our lives, whether it is within the family, country, region or even globally, is a sphere that is dynamic. The  ever changing nature of the economic environment  demands  that,  at  all  times,  as  economic  players,  we  need  to  monitor  the environment in which we play; have foresight to deal with challenges while they are still on the horizon and, importantly, work diligently to ensure that we remain at the epicenter of the ever- evolving economic dynamics.

As most of you are aware, the world is increasingly becoming a global village. The interconnectedness of countries, regions and continents presents great opportunities for economic advancement and, increasingly, means that all countries, irrespective of their size, can take advantage of opportunities that our forebears could only have dreamed of.

However, the flip-side of globalisation is that countries can no longer hope for immunity from the ravages of the global economy precisely because of the interconnectedness of the world economies. The 2008 global economic downturn which was, among other things, spawned by reckless lending practices in the United States, did not only affect that country but spilled onto the rest of the world. Two years down the line, the Eurozone is fending off crisis after crisis with established economies like Portugal, Greece and Spain needing to be bailed out or close shop. Indeed, we were also not spared the hardship of the downturn and, among other things, lost about a million jobs during the downturn.

We also meet for these awards as the push for regional integration gains momentum. The issue of the Southern African Development Community (SADC) economic integration is a given with the implementation  still mooted  at year 2015 for single  market  and  year 2018  for a single currency. This integration will give South African businesses and entrepreneurs more than 250 million consumers that they, together with businesses from elsewhere in the region and in the world, must service.

In July this year, South Africa hosted the second COMESA-EAC-SADC Tripartite Summit wherein there was agreement on the need to establish an integrated market of 26 countries with a combined population of nearly 600 million and an estimated total GDP of US$1 trillion. As all of us know, South Africa is now part of the BRIC family, the only economy on the African continent to have that honour. The BRICS development opens up a market of about 3 billion people consumers.

What has this got to do with this evening’s proceedings?

The fact of the matter is that it is only those economies and economic players who are well- prepared for the opportunities we have just highlighted who will benefit from them. To the unprepared economies and businesspersons, the more than 250 million consumers who make up the SADC are nothing more than just an inconsequential big number. To those who are prepared to seize the opportunity presented by regional economic integration, this represents a leverage for economic growth and development.

Our ability to exploit the opportunities provided by the globalizing economy is dependent on how well our entrepreneurs can perform on an international stage. This means that our economy, for it to grow and develop, we must be innovative and creative. We need to come up with new ideas and new products in order to ensure that these opening markets benefit our country’s growth. It is for this reason that as government, we support the initiatives of Productivity SA because they challenge our entrepreneurs and role-players in the economy to constantly strive to be at the cutting edge of new innovations and creations.

As we are all aware, currently South Africa is among the biggest and the most stable economy in Africa. This is a place we occupy by virtue of our pioneering efforts in various sectors of the economy. The problem with holding pole position is that there are always those who seek to topple you. Therefore, it would be the height of folly, particularly with the socio-economic challenges that the majority of our people still face, for us as entrepreneurs to sit on our laurels and think that the South Africa’s economy will continue to be resilient of its own accord. The long and short of it is that we need more entrepreneurs and innovators to come up with new products and technologies to ensure that we remain competitive.

The concept of productivity, Programme Director, does and should not apply only to the private sector. Since ours is a developmental state, we need a cadre of women and men who are public servants who subscribe to the principle of productivity, innovation and creativity. It is a sad indictment on public servants that the negative connotation of the word “bureaucracy” has become synonymous with the way government goes about its task.

As a matter of interest the negative connotation of bureaucracy is refers to “…an organisation that has a combination of the  following  traits:  inefficient,  slow  moving,  uncreative,  wasting  of  time,  money,  and resources,  making  stupid]  and ineffectual  decisions based on misinformation  passed up through  overly  complex  chains  of  command  and  control,  having  complex  and  overly hierarchical structures, confusing and overly complex rules and procedures that defeat the purpose of the rules.”

Whether correctly or incorrectly certain sections of our administration are perceived as being bureaucratic, in the negative sense of the word, then clearly the state cannot play its role of being an enabler for growth and development. Therefore, it is critical that, in the coming period we work extra hard to ensure that government departments participate in the process leading up to these awards because then we can only improve and be best positioned to carry out our mandate.

Programme Director, as we meet here this evening, we meet against the backdrop of the release of employment figures which do not paint a beautiful picture about our country in general and province in particular. The latest Labour Force Survey statistics for the second quarter showed that unemployment in the province had slightly increased by 18 000. Encouragingly, the number of  people  who  are  employed  in  the  province  increased  from  2,4  million  to  2,5  million. However, what little gains we have made on the employment front is off set by the unpalatable showing on the unemployment side.

This means according to the strict definition of unemployment in the province of KwaZulu-Natal we have at  least  638 000 people who are unemployed. This  picture of the  unemployment situation in the province becomes even gloomier if one looks at the fact that discouraged work seekers increased from 592 000 to 604 000. We also meet against the backdrop of reports that the economy has registered a measly growth rate of 1,3% in the second quarter.

The challenge of growing the economy can only be addressed through all the social partners working together to address our common ills. The government, the business sector; organised labour and civic organisations all need to play their role in addressing the problem of unemployment. However, it is a universally-accepted fact that creates employment opportunities while the state creates enabling conditions for this to happen.

Our participation in regional economic blocs; legislation that aims to create a conducive environment for growth and programmes and strategies to uplift the economy including various empowerment funds as well as policies all attest to a government that is committed to growing the economy. The private sector, we believe, needs to come to the party and understand that the success of an individual business concern contributes to the growth of our economy.

Programme Director, one of the lessons we have learned from the recent global recession is that we need to be innovative and productive in order to hold our own in the global economic village. It is because of this reason that our government has recently passed an investment strategy which is aimed at attracting, promoting and facilitating investment of R33 billion into the province of KwaZulu-Natal by 2016.

Achieving institutional coordination Dynamic Investment promotion focus Packaging Information and Research Addressing the Fundamentals
Skills and Resource Requirements.

The reality is that this strategy will not yield the desired results if it is not supported by a strong commitment  to boosting  productivity.  No investor  worth  her or his  money  will invest  in a province or a country which is not productive. Upping the stakes in productivity is not a public and private sector challenge but it is a societal challenge.

These awards, therefore, should encourage all of us to work even harder and be more innovative and creative in how we approach our respective mandates. As we all know, Japan has been the second biggest economy to the US for a number of years. However, this has today changed with China occupying the second berth and threatening to unseat the US in the not-so-distant future. The lesson for us as South Africans is that we need to invest in innovation, creativity and new technologies in order to remain a leading economy in Africa and a competitive one globally but it all starts with individual businesses being creative and innovative and pushing the boundaries.

May these awards enthuse all of us to go beyond what we think we are capable of in ensuring the global competitiveness of our country and addressing the challenges that still afflict our society. The stage is set for us to chart a new way forward for our country. We dare not disappoint.

I thank you.