Deputy Chairperson, this is the first time that I am speaking in the NCOP during this term. I would like, therefore, to congratulate you, the Chairperson, and all others members on your election and express the view that this will be the first, no doubt, of many constructive engagements with this House.
When I had an opportunity to speak in this Chamber during the last Parliament, I expressed the view that our Constitution was singularly vague when it came to prescribing the specific roles of national, provincial and local government in promoting economic development. Schedule 6 of the Constitution defines "trade", without any further qualifications, as a "concurrent function between national and provincial governments", and all spheres of government recognise that they have roles and responsibilities in promoting economic development.
I want to suggest that as we go about responding to the electoral mandate to create decent work and sustainable livelihoods on a much enlarged scale, it will be necessary that we work together much more effectively within the spirit of co-operative governance to clarify our respective roles and bring about much greater co-ordination and effort between us.
As we all know, we are in the midst of the worst global economic crisis since the Great Depression of the 1930s. The present crisis has seen a sharp decline in economic activity across the world. In South Africa we have seen sharp contractions in mining and manufacturing in particular, and this crisis and the decline in manufacturing output in particular threaten to bring about job losses in a sector of our economy which has significant potential to create decent work.
Given this context, it has become imperative for all of us to significantly raise our game and enhance the implementation of our strategies and policies both to preserve jobs and strategic industrial capacity threatened by the recession, and to simultaneously place our economy on a new, more labour-absorbing growth path.
This challenge of preserving and enhancing our industrial capacity is intertwined with the challenge of promoting a more geographically balanced spread of economic activity throughout the country. We need to acknowledge and recognise that there are very strong economic forces which tend to concentrate economic activity in the established urban areas of our country while simultaneously marginalising from economic opportunities people who reside outside the major metros.
Purposeful interventions are therefore required to try to bring about a more equitable geographic spread of economic activity and opportunity. These interventions have to be based, in the first instance, on an objective and sober assessment of the economic potential of particular areas and, then, on the implementation of strategies well thought out and crafted to promote that potential. In doing so, the mandate of this administration is to be bold, focused and energetic in rising to these challenges.
This is the approach that the Department of Trade and Industry is taking in confronting the challenge both of responding to the crisis and of trying to promote more sustainable, longer-running industrial development.
We launched the national industrial policy framework and the first industrial policy action plan in the years 2007 to 2008. This set us on a path to a more significant and comprehensive industrial policy agenda. Since the launch of the first industrial policy action plan, we have made important progress including the launch of the automotive development programme, the finalisation of measures to restructure the clothing and textile competitiveness programme, and the implementation of new support measures, business process outsourcing, tourism, crafts and film and television sectors.
This progress shows that comprehensively researched, targeted and well- designed interventions do make a difference and this provides us with confidence going forward. However, we are not yet at the required level of ambition with respect to the impact of our industrial policy in order for us to be able to achieve the kinds of goals which our manifesto demands of us.
Our challenge, therefore, is to substantially raise the impact of industrial policy interventions both at sectoral and crosscutting levels. This will require that we simultaneously build the necessary capacity required for higher impact industrial policy implementation. In addition, it is clear that successful scaling up of industrial policy interventions will require that we approve co-ordination across the different spheres of government. Indeed, this imperative has taken on a new dimension as the government also reacts to strengthen its rural development programmes.
Scaled-up industrial policy will require more co-ordinated actions based in all three spheres of government. It will require us to be more strategic and smart in aligning various programmes and activities across the spheres of government. Industrial policy can never be seen as an exclusive domain of one department, the Department of Trade and Industry. Rather, it is a collaborative venture of government in all spheres, acting in partnership with economic actors to implement agreed interventions emerging from strategic consultation.
During the term of this administration, an important objective, accordingly, will be to substantially improve interaction between our department and our colleagues in the provinces around programmes to promote more effective development. In this regard, we must look closely at how we can improve the effectiveness of Minmecs.
In enhancing our efforts to tackle these challenges of uneven development of the spatial economy, we will need to review past practices, identify gaps and build on what has been successful. We have developed important programmes and vehicles in the period since 1994. These include industrial development zones, IDZs. Most members of the council, I'm sure, will be aware that IDZs exist at the moment in Coega, East London, Richards Bay, and that there is the IDZ link to O R Tambo International Airport. The IDZs have operated by providing a particular infrastructure and opportunities of concentration around that infrastructure, orientated particularly towards export activity. The IDZs have therefore been linked to major international airports and to ports and can be a key component of industrial development efforts in that they offer duty-free entry of inputs which are then used to manufacture products that are exported in special customs administration arrangements. The IDZs which we have in place have all had some limited success in achieving their objectives, but could all potentially, however, reach much higher levels of activity.
Together with our partners in Minmec we have identified the need for a significant review of the operation of IDZs as well as for a new governance framework for these zones. Among other things, IDZ policy must define more clearly the roles of national government, provinces and local government in the establishment of IDZs, as well as in the operation of authorities responsible for running them.
In addition to that, there is a need for a clear funding stream and an incentive programme for IDZs. What we need to recognise, however, is that IDZs are a model applicable to specific activities in certain parts of the country. We also therefore need to develop and push forward other models to support more geographically spread economic development.
One of these is the special economic zones, SEZs. A number of candidates for designation of SEZs have already been identified. They include the Umsobomvu development zone in the Eastern Cape, the Northern Cape diamond hub, the Wadeville-Alrode Industrial Corridor, and other areas in KwaZulu- Natal, the Western Cape and Mpumalanga. Beyond this, we anticipate assisting municipalities with developing particular industrial clusters and a series of support services and schemes related both to SEZs and municipal industrial structures. The DTI has also increasingly become a key role-player in the formulation of strategies at district and metro municipal levels, as well as in supporting provincial governments in spatial economic planning. Other programmes we have been implementing since 1994 are the spatial development initiatives or corridors. These are aimed at building infrastructure, such as road or transport links, based on packages of identified investment opportunities and then embarking on co-ordinated investment recruitment drives for the particular SDIs.
In all of these initiatives I just mentioned, much of the policy work has been completed. This has involved defining and refining strategies and modes of implementation, but over the years we have experienced significant implementation challenges and challenges of co-ordination. It is in this context that I believe that the newly established Department of Economic Development will be of enormous benefit in working with us.
We expect that the new Department of Economic Development will strengthen interaction with the provinces through, among other things, strategic Minmecs to develop joint programmes in areas of concurrent jurisdiction. Key areas of focus identified in this regard will include industrial policy, rural development, trade and investment promotion and SMME support.
A more focused and rigorous Minmec process is a practice which, we believe, needs to be taken forward. This approach will involve identifying bottlenecks, policy interventions and ensuring alignment and harmonisation of efforts and capacity-building for service delivery.
Inasmuch as industrial development is a key component of the government's drive to promote decent work opportunities, the development of co- operatives and the co-operative movement must be identified as another major priority. Co-operatives provide a major opportunity for sustainable livelihoods for many people, especially those in rural areas. The DTI will certainly be doing much more to encourage the growth and development of co- operatives, and we will be paying much closer attention to this important issue in the period ahead. Other ongoing initiatives to broaden participation in the economy will be outlined in the speech by Deputy Minister Ntuli.
The valuable contribution of this Council in the area of regulatory reform also needs to be acknowledged. The corporate law reform project started in 2004 culminated in the passage of the Companies Act last year. This important piece of legislation seeks to alleviate the regulatory burden and the cost of doing business, particularly for small enterprises, by cutting the red tape and the cost of registering limited liability companies.
Last year we also enacted the Consumer Protection Act. This provides, for the first time in South Africa, a significant legislative basis to support and strengthen a culture of consumer rights. The 2008 Competition Amendment Act, when enacted, will strengthen the ability of the state to combat cartel-type activities and to deal with complex monopoly conduct in highly concentrated markets.
We will ensure that these new laws are effectively implemented, particularly given their importance in facilitating fair conditions for enhanced entry and participation in markets by small, medium and micro enterprises.
The DTI is working with provinces on an assessment of the process of issuing liquor licences for distributors and manufacturers. This will extend to a review of the liquor industry in South Africa, focusing on the efficacy of the regulation of that industry. Certainly, improving the efficacy of the licensing process will greatly ease the entry into formal operations of small and medium businesses and thereby enhance the transformation of the liquor industry as a whole.
At the same time, more focus will be given to assessing the social impact of alcohol trading and consumption. With this in mind, licence criteria are being drafted to ensure that distributors and manufacturers increase their outreach programmes in combating alcohol abuse.
I welcome the fact that the NCOP continues to take an active interest in international trade negotiations. We had an opportunity to speak on these matters in the NA, and I don't want to repeat the points in any detail here, but I want to emphasise that we remain committed to the promotion of trade relations that are supportive of our economic development objectives and our industrial policy in particular.
Advancing effective development-orientated regional integration in Southern Africa remains an important strategic priority in our trade policy. This, in our view, requires an agenda that does not exclusively focus on unrealistic timetables for formal trade integration arrangements, but on co- operative programmes to build regional productive capacities and promote regional infrastructure development - which are, in fact, in our view, vital prerequisites to advance trade integration arrangements.
As I indicated in my speech in the NA, we remain concerned that the interim economic partnership agreements, EPAs, now signed between some members of the Southern African Development Community EPA configuration and the European Union could undermine regional integration. We will, as South Africa, continue to work to minimise the negative impact of interim EPAs on the region, and we have called on the European Union in particular to refrain from implementing any provision in the EPAs that could strain the Southern Africa Customs Union.
The global economic crisis has brought into even more stark relief the need to strengthen South-South trade and co-operation relations, with a view to diversifying both our export destinations and our export basket. Brazil, India and China have emerged as highly dynamic emerging economies, leading a structural shift in the global economy in which developing countries have been enjoying a rapidly growing share of world trade. Building our trade and investment relations with these new centres of global economic power will require purposeful engagement. Thank you very much. I almost finished! [Applause.]