Chairperson, hon Minister and Deputy Ministers present, GDP growth in 2007 was 5%. In 2008 it was 5,1% and last year, as a result of the sharp deterioration in consumer and business confidence, it fell to 3,1%. Economists are hopeful that a 3% growth rate is still on track for 2010.
However, the question that is uppermost in our minds is what will happen in the construction industry after the World Cup. Will it be able to sustain itself beyond 2010? This is the billion dollar question with regard to what will happen in the construction industry: Will it directly influence the outcome in our economy?
In response to the severe economic downturn, the department has responded with a scaled-up industrial policy and action plan called Ipap 2. Ipap 2 seeks to give a boost to the manufacturing of vehicles, chemicals, metals, clothing and textiles, and so on.
On the non-manufacturing side, tourism is being promoted. It is clear that government will have to do something drastic to create economic growth. Therefore the success of Ipap 2 beyond the three years is very important and key.
The figures show that while our exports grew to R448 billion in 2008, they fell back to the 2007 level of R350 billion in 2009. The export market is becoming very complicated because of the profound alterations and shifts. Therefore, to premise our economy growth on the basis of substantially increasing our manufactured exports, a conventional approach to the industry in South Africa, may boomerang on us.
If plan A, which is Ipap 2, does not come up to expectations, Minister, does the department have Plan B and Plan C, because jobs are very important in our country.
There is another problem with banking on exports of manufactured goods, as we heard during the public hearings on Ipap 2. Short run capital inflows in South Africa keep the rand at relative strength in relation to the dollar and the euro. This is a clear impediment to exports. Our strong rand and higher domestic inflation relative to developed economies, add to the difficulty in stimulating exports of manufactured products.
Car manufacturing is in trouble all over the world and South Africa's manufacturers have suffered more than other manufacturers. According to a specialist, Lamprecht, almost 10 million fewer vehicles are being manufactured globally. South Africa is one of the countries where sales have declined most.
Wouldn't it make greater economic sense to be an active player in the supply chain than to attempt to be a long-term manufacturer of the total product? With electricity and other costs going up, will manufacturers remain in South Africa for the long haul if cost benefits decline?
If, on top of these considerations, we factor in global warming and climate change, the impact of which will be severe in South Africa, does it not make sense to orchestrate support for South Africa's electric car? As Cope we are not opposed to this, but this project must consider all factors.
While Cope supports the help being given to companies that are in distress, the Minister needs to assure us that these companies, indeed, have long- term prospects and, therefore, are deserving of support. In June of last year, seven companies were thrown a lifeline worth R500 million by the IDC. Government has also set aside R3 billion to help other companies in distress.
We would like the Minister to inform the House how all these companies in distress are faring, and what their long-term prospects looked like. It would be very problematic to build our economy and hopes on a shaky foundation.
Mr Minister, with regard to the dire issue of the IDC being moved to the Department of Economic Development, where is the accountability when the IDC represents the main entity of the flagship programme, Ipap 2?
It has long been an ambition of the tripartite alliance to diversify the economy away from its dependence on mineral exports and move it towards job creation. South Africa's position on the global economy is fragile, with Cosatu lobbying for protectionism, and the business community lobbying for the deliberate undervaluing of the rand to promote exports and inhibit imports.
The success of this department will lie in finding a solution that will benefit both the business environment and the labour market in South Africa.
Another group that has emerged as a major influence is the Black Management Forum. As we can see, the economic atmosphere is one of various interests, factors and institutions. This department has to create an effective method to meet these needs while emphasising economic growth.
It seems to us that the department is trying to emulate the Asian economies to achieve miraculous growth. Unlike these Asian Tigers, we have certain big problems. In the first instance, we have not achieved social cohesion because, as a country, we do not understand its economic significance. Therefore we have not tried very hard to make it an important economic goal. One area in which we can certainly emulate Asian markets is in stimulating domestic sales. We can do this by offering buyers subsidies for the purchase of durable consumer products that are fully manufactured in South Africa.
We want to encourage the government to provide for eco housing, co- ownership, cohousing and modular housing to keep the construction sector busy even beyond 2010. Housing construction must be used to drive economic growth, as well as improve the welfare of our people in the country.
The domestic market must be encouraged to grow so that manufacturers can have a reasonable market to supply. At the same time the economy needs to grow to create job opportunities. With the loss of about 900 jobs in the last year ... [Time expired.] [Applause.]