Hon Speaker, Mr President, Deputy President, hon members, it is my honour to participate in the debate today and to speak on our international economic relations. The past three decades have seen a deep integration of economies across the globe.
This integration, although not always on our own terms, has profoundly changed our world. Within this new world there have been deep challenges: challenges about the outcomes of integration, about the unequal power relations and about policy frameworks. However, there have also been opportunities for economic development and to promote international co- operation.
While the global economic crisis has raised serious and fundamental questions about the policy framework of integration, at the same time the desirability of nations working, trading and investing together is not in doubt. But on what terms do we do so?
Economic orthodoxy, as the standard model for that engagement, is now undergoing a meltdown with painful effects on the poor; and indeed, many fast-growing economies have not followed the precepts of such orthodoxy in their domestic policies.
One of the key goals of government is to reposition South Africa globally, based on our people's needs and not narrow ideological considerations. This will enable us to advance our electoral mandate.
As we engage with the powerful economies of China, India, Brazil, the EU and the US, we need to reflect how we can leverage more and better jobs from these economic relationships. Our trade and investment can be structured to maximise the local employment dividend.
But our agenda is also an African agenda. We seek to develop African economies, not as an act of solidarity only, but as fundamental to meeting our national economic goals. We are not an outpost of Europe, and we must seek more economic opportunity, reciprocal investment and trade within Africa.
The trajectory of global economic development over the past few decades has been towards larger regional economies. The economies of scale and increased consumer markets, the synergies between regional industrial producers, the secure sources of raw materials, the skills pool - all the benefits that flow from strong regional economies - are considerable.
The African continent is an opportunity awaiting innovative approaches to development. As a recent UN report noted, Africa is endowed with human and natural resources, environmental diversity and cultural richness. The continent is youthful, with over 920 million people, of whom 60% are under 25 years old. This is a huge resource - today and tomorrow's labour force that needs to get into productive and decent work.
The ending of a number of civil wars and the consolidation of democratic rule has been accompanied by robust economic growth averaging 5,9% between 2001 and 2008, though largely driven more recently by commodity price increases.
However, Africa's contribution to the global economy is disproportionate to its benefit from that global economy. Our coal and oil provides the energy needs elsewhere; our minerals are transformed on other continents into manufactured goods; and our agricultural output feeds many across the world. Global companies have found the continent a ready place for mining operations; a market for goods and services; and a solid base from where to repatriate profits to their home base.
Africa is an exporter of skills. Skilled personnel trained with the limited taxpayers' monies such as doctors, nurses, teachers and engineers are snapped up by developed countries. Take the example of Ghana. According to a 2005 European Union Commission report to the European Parliament, the UK made savings of 100 million in training costs from the recruitment of the 1 314 Ghanaian doctors and nurses practising in the UK. Ghana is neither the only nor even the largest contributor to this perverse form of development aid from the South to the North.
The continent faces other deep challenges. Africa has 12% of the world's population, but it accounts for only 1% of the world's global GDP, and only 2% of world trade. If Africa's economy was proportionally the size of its population, it would be 12 times larger than it is today. It is this gap that creates an opportunity for development and inclusive growth.
However, the opportunities are under enormous strain today as the fall-out of the crisis that emerged, not in Africa, but in the US, causes damage to the economies of our continent.
One of the most significant dangers is that of a deep de-industrialisation in which the continent continues to lose many of its key manufacturing sectors and enterprises, and sinks deeper into being simply a provider of raw materials to the rest of the world. That danger, of deepening the colonial pattern of simply exporting unprocessed agricultural and mining output and importing manufactured goods, is real.
In the current global architecture, the structure of trade is stacked against Africa. The global economic crisis may have not created, but it does seriously exacerbate, these deindustrialisation pressures.
So what does development entail? Is South Africa and the rest of Africa destined to be the modern day's hewers of wood or drawers of water? Or, can we build a different vision for South Africa and indeed the African region, as a major industrial economy with strong supply linkages across our borders, an economy based on innovation, skills, science and technology and fair labour standards, and driven by strong domestic demand in our economies?
The development agenda for South Africa contains the seeds of a new growth path for the African continent. There are connections between what we do at home and what happens in the region. Many elsewhere in Africa agree with this perspective. For example, the programme of infrastructure development needs to be linked to a continental infrastructure plan. Industrial policy at home should also be mirrored by a broader Africa-wide industrialisation strategy.
There are enormous opportunities for us in developing an integrated production and supply chain across the region. These opportunities, however, go with responsibilities. We need to ensure that the conduct of our people and South African business practices elsewhere on the continent befit our status as a proud member of the African community of nations. The economic crisis has shown that Africa is not decoupled from what happens in other industrial economies, and that it constitutes a powerful argument for co-shaping of the global financial, economic and social architecture.
One year ago, the International Labour Organisation's tripartite constituents adopted the Declaration of Social Justice for a Fair Globalisation. It provided a far-reaching vision of placing people at the centre of economic policy, affirmed that labour is not a commodity and that poverty anywhere constitutes a danger to prosperity everywhere. And it began to put in place one part of the new global social architecture that we require.
More recently, hon President, ILO member states grappled with how to respond to the global jobs crisis. Following discussions in which South Africa played a key role, and where Deputy President Motlanthe spoke at the plenary of the conference, the tripartite parties adopted a Global Jobs Pact. It contains an employment response to the economic crisis and it mirrors in many areas South Africa's framework agreement adopted locally in February this year.
The Global Jobs Pact provides for the following: measures to accelerate employment creation, job recovery and sustaining enterprises; building social protection systems and protecting people; strengthening respect for international labour standards; using social dialogue, bargaining collectively, identifying priorities and stimulating action; and shaping a fair and sustainable globalisation.
Indeed, hon President, you will be pleased to note that our domestic social dialogue inspired and shaped this international consensus. We will drive implementation of the framework with the urgency that is required. We also take this national vision into discussions in other international fora.
At the WTO, we seek an outcome of the Doha Rounds, that is, development. The emerging outcome does not adequately address South Africa's industrialisation agenda, and in its current form it will cause steep job losses in our economy. We will, therefore, seek to positively influence the outcome so that it leaves South Africa with policy space for new industrial development, supports employment in vulnerable sectors and expands decent work opportunities in the local economy.
Government will enter into discussions with the EU regarding the proposed economic partnership agreements. The objective will be to highlight the dangers these agreements pose for regional economic integration, given the conflicting legal obligations they introduce among members of a single customs union.
Within the international financial institutions, principally the IMF and World Bank, South Africa has called for major reforms. Their governance structures need a revamp to increase the voice of the developing world. Their mandate needs to be reviewed to ensure that it better reflects development goals, including decent work outcomes.
In conclusion, as we reposition South Africa to take advantage of responsible and balanced economic relations in Africa, with the global South and with traditional trading partners - as you, hon President, set out in your vision - we will engage strongly with the local business community and with organised labour to seek a national consensus. We will seek consensus on maximising the impact of these opportunities for creating local jobs, development of the region and the continent. Thank you. [Applause.]