Star-Safmarine Breakfast Club
3 July 2007
Welcome and thank you for the invitation to speak at this breakfast hosted
by the Star and Safmarine. These breakfasts are becoming a well established
institution and offer a platform for providing and exchanging information.
Those capable of these early risings certainly deserve a good meal and some
useful information. I hope I do justice to my injunction.
This morning I would like to focus on the need for all of us, public and
private sector, to develop a growth mentality. But more than this we must
develop a determination to ensure that all of our citizens benefit from the
growth that we generate. This growth mentality is not some reckless activity
but a carefully planned process that will develop our economy, expand all the
necessary capacities for the growth process and take our economy into the ranks
of the world's leading economies. It requires both careful planning and a
boldness of vision. Both of these in turn require a confidence in our ability
to achieve. Such confidence comes from maturity and a resolve not to be
distracted by idle chatter and political sophistry.
We have just come out of an important African National Congress (ANC) Policy
Conference and since the press is redolent with the views of nameless 'National
Executive Council (NEC) members' and experts who were not in the meetings, I
feel entitled to give you a viewpoint and you are welcome to attribute it to
me. For those of us who have attended many previous ANC conferences discussing
policy there was one overriding impression and that was the quality of the
debate and the detailed knowledge the delegates had on what is actually
happening in all parts of our economy and society. This is an inspiring
development as it points to the improving quality of policy making we could
look forward to in the future. It also confirmed that the ANC is indeed still a
liberation movement allowing for a broad church of ideas and beliefs. This
bodes well for our tolerance and diversity, essentials for a stable and
prosperous democracy in the future.
I would urge all of you to access the actual documentation prior to and
after the conference. It is indeed a festival of ideas and trenchant critique
of our progress so far as a democracy. Some of the ideas floated for further
discussion may indeed not be firmly located in the wise or possible. However,
it is regrettable that the press has chosen to elevate the so-called succession
issue above all else. In this misplaced elevation they have missed the two very
important themes that do flow through the documents, and thereby are materially
misinforming their readers.
The first is the preoccupation with ensuring that we address the needs of
the poor and that growth is shared by all not as some ancillary trickle down
but as an integral component of the growth. How do we ensure a growth process,
indeed a growth mentality, whilst at the same time ensuring that we build an
integrated economy that is both competitive and inclusive? This requires a
clear, persistent and determined strategic programme and for this reason the
role of the state is critical. A state that can carry out such a transformatory
and strategic process will have to be predicated on the realities of capacity,
global economic forces and the political will that underpins that state. The
conference debated these requirements and agreed that our formulations were not
precise enough and that more work has to be done, an exciting opportunity for
all thinkers and opinion makers to contribute too.
The second crucial theme relates to that precise issue of the political will
that underpins a postulated developmental State. There is no question that the
ANC is located at the very centre of such political will. Now it is true that
there are elements within the ANC and alliance that are preoccupied with a
narrow question of office. They are a minority, but like any single issue lobby
they are noisy, mainly through the favour they find among many journalists and
purported experts but they are not a very reflective group.
There is no question in my mind that the majority of the delegates and the
purported protagonists themselves are preoccupied with a much more fundamental
issue. This is the retention of the unity, political cohesion and enhanced
inclusivity of the ANC and how the ANC fulfils its leadership role of the
historically crucial Alliance. There is a general concern that the ANC and the
alliance are not as strong as they should be in this period. From an electoral
perspective the ANC is unassailable but in its prime role, that of a liberation
movement of all our peoples leading its vital partners Congress of South
African Trade Unions (Cosatu) and the South African Communist Party (SACP) it
has to be strengthened. This is why the conference stated clearly that there is
a strong view that the current situation where the President of the ANC is the
President of the country should not be seen as a principle, it is the product
of specific circumstances since 1999.
Any tendency toward or actual occurrence of a collapse of the ANC into the
structures of governance must be resisted and reversed. Accordingly, the
conference also made it clear that there is no automatic link between
provincial chairs or regional chairs and premiers or mayors respectively. This
again asserts the unity of the ANC as a national liberation movement and only
centre of political power. It is not a federation of electoral fiefdoms. As a
liberation movement our task is not reducible to being a governing party as we
still have much work to do to cross racial, ethnic, gender and cultural
divides. We have a great deal of work to do to repay Africa for their support
and immense patience in defeating apartheid. It is these profound political
issues that were debated in depth and which the conference agreed will have to
be refined and clarified as we move to the national conference. So I urge you
not to take too much heed of the pop politics that many think is at the centre
of making a new nation. The ANC and the alliance are what they are and where
they are because they do not trivialise what is too important to
trivialise.
These comments only touch the tip of three days of debate in a conference of
some 1 500 delegates. However, I hope they point to the essential stability of
policy making in the ANC and it alliance partners.
I want to now focus on a more concrete illustration of what I am driving at
when I talk about a growth mentality, driving growth and ensuring that it is
shared. It is a process dependent on strategic intent and a strong political
will to achieve success.
As the Department of Public Enterprises we are responsible on the behalf of
government for critical strategic investment decisions. Our mandate is to
provide strategic direction and economic coherence to approximately R170
billion in State-owned assets and some 120 000 people who are employed in our
State-Owned Enterprise (SOE). In addition these SOE are planning to invest
nearly R250 billion in new infrastructure construction and industrial capacity
over the next five years. By any account this is a massive and unprecedented
programme for the public sector, bear in mind it is not the totality of public
sector investment which over the next three years totals closer to R420
billion. There is no doubt that such investment will drive growth but how do we
ensure that it transforms the South African economy into a leading economy and
how do we share the fruits of such growth.
We are focusing on three main areas, building and rebuilding South African
industrial capacity in a manner that opens opportunities for all and not just a
few, fast tracking our human resource development and enhancing research and
development.
In regard to the first area we are developing the Competitive Supplier
Development Programme. Its aim is to create an environment which is conducive
to investment in manufacturing, based on the demand created by our sustained
infrastructure investment programme. The essence of the programme is to improve
the competitiveness of the SOE supply base and to increase local supply
capacity and capability in areas of supply where South Africa has comparative
advantages. The programme will therefore focus on those areas of supply where
there is a coincidence or overlap between national economic development
interests and the commercial interests of the SOE to lower total costs and
secure supply. In other words, the programme will focus on areas of supply
where there is potential for both lowering the total cost of ownership and
increasing national value add.
The programme is based on the notion that procurement planning and execution
is the key transmission mechanism that translates SOE expenditure into an
attractive and sustainable investment climate.
Under the programme, Transnet and Eskom have started a process of developing
Supplier Development Plans which will provide a strategic long term vision for
improving the competitiveness of their supply bases. There will be a focus on
areas of supply which are important to the SOE and for which there is potential
for local industries to be more competitive. The plans will include an analysis
of projected expenditure and supply markets and supply industries, which will
result in the identification of the areas of supply where competitiveness is
lacking and where there is potential for increasing local supply capacity or
capability. There are already indications that a lack of competition, rather
than a shortage of manufacturing inputs, is resulting in rising prices in
certain supply sectors as demand increases.
The plans will also identify interventions to be undertaken by the SOE and
will include targets and key performance indicators for measuring the impact of
these interventions on supplier industry competitiveness and national value
add. My Department will also be working together with other government
departments, including the Departments of Trade and Industry and Science and
Technology and industry associations to put in place supply side support
measures at the firm and cluster level such as supplier benchmarking
initiatives and programmes aimed at improving technology and productivity.
Industry associations will be consulted regarding the content of the plans,
which are due to be finalised by February 2008.
In regard to fast tracking skills development each of the SOE has a major
programme in this regard. However, we are adding to this as key players in the
Joint Initiative for Priority Skills Acquisition (Jipsa) programme by
co-ordinating our efforts not only between the SOE but with private sector
partners within the Jipsa.
Lastly we are now developing major collaborative research and development
programmes with the Department of Science and Technology. The Pebble Bed
Modular Reactor (PBMR) is clearly one of those advanced technology programmes
but there is massive potential in the work of all the SOE. I am sure that the
'big space programmes' will revolutionise digital signal processes and high
speed computing. The defence related industries around Denel will make major
contributions to avionics, material science and command and control technology
and we are slowly but surely developing significant aerospace capacity.
The message I am trying to convey is that we have to develop a growth
mentality. This requires the requisite confidence, boldness and determination
to achieve growth and the ingenuity to ensure that it is shared. We must not
allow ourselves to be distracted by those who can only see the trite, trivial
and mean in the course of our development. We must inform ourselves accurately
and the media must rediscover a sense of purpose and cause and shy away from
the trite, trivial and mean.
We are a great people, a great country and we are capable of taking our
nation to its deserved place amongst the prosperous and free in the world. What
we can think, we can do!
Issued by: Department of Public Enterprises
3 July 2007
Source: Department of Public Enterprises (http://www.dpe.gov.za/home.asp)
