Mr President, we commence the sixth administration in a democratic South Africa with a determination to deliver on our vision for a better South Africa for all.
The ANC has a clear and unequivocal vision for a democratic, just, nonracial, nonsexist South Africa. It is a democracy - as you said Mr President - that works for all 57 million South Africans; a democracy that continues to build on the achievements and successes of the past 25 years, while having
the humility to admit the weaknesses and mistakes of the past. The ANC's strategy and tactics document points out that:
South African society requires an effective state, both technically and in terms of its orientation. In other words, continuing transformation and strengthening of state machinery, including state- owned enterprises, is fundamental to speeding up the implementation of programmes of social change in the context of the second phase of radical socioeconomic transformation
As you have pointed out, in order to achieve our goals we must ensure that we have no hunger in due course, and that we have a higher economic growth and an inclusive growth, employment for 2 million young people, and every 10-year-old should be able to read for meaning, and we must halve violent crime.
We need bold and ethical leadership - not the ones that we just heard demonstrated - to implement the seven priorities, the view outlined. We must nurture a common passion and a common purpose. This state of the nation debate sets out a visionary and clear
roadmap for a different, better South Africa for all. Now we must implement our plans with urgency. And we know that we must do things differently as well. We commit to, as Ben Okri says, to remake ourselves so that we remake the world ... "
Two of the seven priorities you have outlined, Mr President, are absolutely vital at this stage of the development of our young democracy which is robust, just, inclusive economic growth and a capable, ethical and developmental state. As your state of the nation address points out and I quote:
It is only when we reach consistently high rates of growth that we will be able to reverse the economic damage of our past.
We must give social justice real meaning in the daily lives of all South Africans, not just in debates. State-owned enterprises are part of a capable, ethical and developmental state. State- owned enterprises must play a vital role in generating inclusive growth, in providing efficient and cost-effective network services and deliver public services to both those who can
afford to pay and those that can't. As the National Development Plan has outlined and I quote:
State-owned enterprises are central to advancing national objectives through providing economic and social infrastructure. If this is done in an equitable and cost- effective way, SOEs can contribute to both deliver a quality and reliable service at a cost that enables South Africa to be globally competitive. To live up to these expectations, SOEs will require clear public-interest mandate, which are consistently enforced.
What is happening globally in relation to state-owned enterprises is that the rationale for the state's ownership of public enterprises varies among countries and industries. It can typically be said - according to one international organisation - to comprise a mix of social, economic and strategic interests. Over the last few decades however, globalisation of markets, technological changes, and the deregulation of previously monopolistic markets have led to readjustment and restructuring of the state-owned sector in many countries. Moreover, SOEs'
participation in international trade and investment has grown significantly. They are an influential and growing force globally.
The proportion of SOEs among the Fortune Global 500 has grown from 9% in 2005 to 23% in 2014, driven particularly by the growth of Chinese SOEs. The Organisation for Economic Co- operation and Development, OECD, recently conducted a third review of SOEs amongst its members and certain affiliates and it found the following: Countries with the largest SOE sectors by share of national employment were in Europe interestingly, led by Norway with almost 10% nonagricultural employment; countries with the largest SOE sectors in absolute terms by corporate valuation are China which has valued the SOEs at almost US$30 trillion, India at US$338 billion, Korea at US$217 billion and Italy at US$205 billion.
There was a concentration of SOEs in the network industries, that is telecoms, gas, electricity and transportation industries. Mr President, we are pretty much in line with the international terms that we have seen not many years ago, but
just today. And quite contrary to what some of our colleagues and hon members from the DA might have been arguing about earlier on.
The review observes that and I quote:
With many countries experiencing lower economic growth and finding their fiscal space diminished, governments face growing challenges to ensure well-functioning SOE sectors ... good governance of SOEs is critical to ensure their positive contribution to economic efficiency and competitiveness ...
Similarly, there are new trends as you have pointed out in your address that SOEs can actually play a much entrepreneurial role rather than just intervene in situations, where they called market failure, Mr President. I am quoting in this regard from a leading author on the entrepreneurial state who said that in countries that owe their growth to innovation and regions within a country like Silicon Valley, the state has historically served not just as an administrator and regulator of the world creation
process, but a key actor in it and often a more daring one, willing to take the risks that businesses won't. I trust that my colleague hon Hill- Lewis will note this. This has been true not only in the narrow economies called public goods, like funding of basic research but applause the entire innovation change from basic research to applied research, commercialisation and early stage financing of companies themselves. Such investments ...