Programme director
Representatives from the Department of Trade and Industry
Representatives from the Industrial Development Corporation;
Representatives Industrial Development Corporation
Representatives from the Clothing Industry
Dignitaries
Ladies and gentlemen
All protocol observed.
It gives us immense pleasure to be part of this auspicious occasion where we are meeting to reflect on the achievements of the past year and to work together to ensure that the clothing and textile industry continues to play a critical role in the provincial economy.
Programme director, annual general meetings are by their very nature a time for reflection on the year gone by and the time to take stock of the challenges while regrouping to take on the year ahead with renewed zest. But more importantly we meet tonight to celebrate what has over the years proven to be a successful and mature relationship between government and the clothing and textile industry, a true model of the what public-private partnership can achieve.
We also meet at the time when our government has presented our economic compass for economic recovery in the post recession phase, the New Growth Path which is our guiding light for achieving economic prosperity. We also meet at the time when our government has made it clear that this year will be a year of jobs and more jobs. In this regard our government has set aside a R9 billion war chest to deal specifically with the issue of job creation. We have no doubt that this industry has a big role to play in this regard.
We also have no doubt that during this meeting you will find plenty of time to reflect on the challenges facing this industry, especially at this critical time in the evolution of the volatile global economy. As all of us know, the world economic growth is beginning to pick up after suffering its biggest slump in decades owing to the economic meltdown which had a domino effect across the globe. As one of the major industries the world over, the clothing and textile industry was also adversely affected by the economic recession as demand for clothes took a back seat, with many people focusing on buying the basics in order to stay afloat. The fact that the clothing industry is mainly labour intensive and offers entry level jobs for unskilled labour, particularly women, means that the effects on this industry are more far reaching for society than is appreciated.
It is not a secret that the clothing and textile sector had developed rapidly in our country because of import substitution policies and because it was protected. Particularly, with the Multi Fibre Agreement wherein quota market access was offered by developed countries, this sector grew rapidly. With the end of this agreement in 2004, it meant that Asian countries, including China, could export directly meaning greater competitive pressures. According to an article written by Gilberto Biacuana in 2009, “China’s share of South Africa’s total imports of clothing and textiles grew from 16, 1 percent in 1996 to 60,7 percent in 2008”. The article also states that, from 2003 to 2009, about 69 000 jobs had been lost in the clothing and textile sector, marking a drop of 39 percent.
Clearly, the latest figures are much more than this. This has all of us concerned as government, because, over and above the economic impact of job losses in this sector, we also have to live with the social impact of this. Graphically, this means that more resources which could be used to deal with the glaring infrastructure backlog and other spheres of community development must be used to shore up our already overburdened social security net in the form of the provision of various grants.
A number of reasons have been advanced for the situation in which our once vibrant clothing and textile sector finds itself in. One of the major arguments is around the lack of competitiveness of our sector. This lack of competitiveness, the commentators say, stems from, among other things, the cost of labour; lack of requisite skills and technology. It is further argued that labour productivity is hamstrung by so-called rigidities arising from a highly unionised labour force and our local industry’s inability to achieve short turn-round times as our Asian counterparts, for example. There is also the ongoing trade liberalisation debate and how trade liberalisation has rendered us vulnerable to the whims of the market economy.
The correctness of some of these assertions is a moot point and, in part, a microcosm of the broader debates that occur between labour and business involved in this sector. As government, our mandate is to ensure that we help build a South Africa that is characterised by prosperity and equality. We also appreciate that the demise of this sector signals a catastrophe for a government built on the bedrock of equality and ensuring prosperity for all of our people.
While we will continue to engage around the different arguments advanced by different stakeholders within the sector, our main prize is to ensure that we restore this sector to its rightful place and that it contributes to the continued growth and development of our country.
In this regard, therefore, while we will entertain theoretical engagement on the issue, we are driven more by the urgent need to turn the fortunes of this sector around.
In this regard, we want follow the counsel of one of the greatest thinkers, Karl Marx, who said: “The philosophers have only interpreted the world, in various ways; the point, however, is to change it”. Our resolve is to take the situation at hand, as it is, and try to deal with it. In this regard, we do not aim to spend more of our time pointing fingers at this or other individual for the state of this sector but we want to come up with long term solutions that will ensure that, even in the future, we remain competitive and relevant.
The increasing shift of the global economic power to the East, with analysts predicting that in less than two decades the developed world, particularly those from the East will replace the West as the biggest economic block in the world has meant that as the industry players we have to look for new ways of positioning the industry in the ever changing world.
Infact programme director, who can blame some analysts who contend that the only certainly we have in this age of rapid and remarkable change, is change itself. The question that we have been forced to answer is what do we do in order to remain relevant? How can we drawn on our own innovation and competitive and comparative advantage in order to seize opportunities offered by change itself?
Programme director, it is pleasing to note that however daunting the challenges facing this industry, the industry role players particularly the clothing and textile cluster did not wallow in despair but started initiatives to ward off the economic waves which were buffeting the industry.
But in this new global economic order that is emerging, with hyper-competition from the East and less spending power from the West, we have to be innovative and bring our resources together to allow us to do more with less.
It is in this environment that vehicles such as the KwaZulu-Natal Clothing and Textile Cluster, which have already built the bridges between the public and private sectors and between the different linkages in the value chain, are increasingly recognised as being central to our efforts to create the fertile soils from which business can rise. The clothing, textile, footwear and leather sectors, with their rich and colourful history in the province, still have much to contribute and remain a central pillar in our provincial and national economic growth initiatives. As government we want to pledge that we will continue to support this initiative because we believe it plays a critical role in resuscitating this industry which is in distress.
Programme director, we live in exciting and challenging times. The one who is revered as a victor today, is the one who had the foresight to imagine a brighter future for himself or herself yesterday. Likewise, our province and indeed our country, is at a stage where we need to imagine and work for a brighter future. These ups and downs in this sector have starkly illuminated the point that those who will succeed in the future are those who have the capacity to operate in an integrated world. The Southern African Development Community (SADC) has stated that by 2015 we should have a single economy and that by 2018 we should have a single currency.
In the community of nations within this region, ours is the strongest economy. However, there is no guarantee that this will be the case post the SADC economic integration. The question that we should pose to ourselves is where this sector, in particular, and the economy of our province, in general, will be pegged when regional integration occurs?
This is a question that this AGM and many other interactions after this one have to deal with. What we do know is that in order to ensure that we remain leaders of the regional economy, all stakeholders must work together towards this objective.
Those who will emerge as winners in the regional economy, which will ensure prosperity for their respective countries, will be determined by how well they can negotiate points of disagreement for the greater good of their countries. If we have a business sector that puts the accumulation of profits and more profits as the only yardstick for success then we still have a huge problem. If we have a labour movement that chases the highest wages, even at the expense of employing people, then we still have a challenge. If we have a government that cannot appreciate the need for urgency in creating conducive conditions for prosperity, then we are in serious trouble.
For this annual general meetingto be successful, all the stakeholders must come on board and play their part. We do not meet here to argue semantics. We meet here to contribute to the charting of a new way forward for a sector which provides hope for those who are most underprivileged and vulnerable in our society. We have a responsibility to ensure that this faith is not betrayed. This is the task we must fulfil.
I thank you.
Source: KwaZulu-Natal Economic Development and Tourism
