Friday, March 07, 2014

South Africa Needs to Invest Aggressively In New Plant, Technologies and Skills

We need to invest aggressively in new plant, technologies and skills

ANC Today, Feb. 28-March 6, 2014

The current global economic crisis has forced policy makers to rethink our macroeconomic management approaches. The South African economy is facing the classic structural challenge of a middle-income economy and if it is to grow and develop, we need to invest aggressively in new plant, technologies and skills.

As a response to the structural constraints in our economy and global economic externalities, we identified infrastructure as both a driver and an enabler for economic development. Our infrastructure development programme is specifically designed both to expand our mineral exports and build our capacity and capability to design and manufacture intermediate and complex trade-able goods, for internal use and for exports.

Accordingly, we have made significant strides in embedding the Competitive Supplier Development Programme and philosophy into the very procurement fabric of State-Owned Companies (SOC). In this regard, the 75% local procurement target has become more probable and realistic! Furthermore, we have integrated economic transformation processes into every aspect of our investment programme.

In the context of the Presidential Infrastructure Coordinating Commission, we have a long-term infrastructure plan that is carefully integrated and coordinated into 18 strategic integrated projects at an estimated costs of R877bn that are currently in construction and more than 177 000 construction jobs are tracked on these projects. Enablers such as skills, transformation and industrialisation underpin this plan.

Under the leadership of President Jacob Zuma, the State Owned Companies have tremendously increased their capital investments, thus creating new jobs, developing new skills and contributing towards the country's industrialisation agenda. His administration has spent more than R1 trillion over the past five years on infrastructure. Our country is indeed a country at work and a much better place to live.

Each day we witness the improvement of the quality of life of the citizens of our country when we connect households with electricity to the grid; install solar water heaters; build new houses; improve integrated bus routes in our cities; improved road and rail transport; open new factories to support jobs and develop new artisanal skills at our training centres to support the build of our state-owned companies. And yet whilst we are focusing on the infrastructure build and industrialisation we appreciate the impatience and frustration felt by those who still do not have access to decent basic services.

The President has committed us relentlessly to addressing all backlogs to ensure that every person in our country has access to water, electricity and sanitation and that by 2020, every household will have access to broadband. He addressed in brutal detail, and much to the chagrin of the opposition, the exceptional strides made by our country led by the African National Congress (ANC) during the past twenty years as we strove decisively to end the tragedy of apartheid-colonialism through programmes of social and They wished that the President either did not acknowledge these achievements or that you had no facts to back your account with.

They wished that this impeccable delivery record did not exist so that they would be able gleefully to substantiate their narrative of failure, which hopelessly disintegrates in the face of all the detailed record acknowledged even by independent monitors. Instead, their own flagship project in the Western Cape cannot be backed up by reality and the lived experiences of black South Africans who live in this province.

The website, Africa Check, recently published a report in which it said the Democratic Alliance (DA) has made false claims about service delivery on Twitter which it cannot back up with data, or quotes it from unknown sources. They suck them up from the thumb.

The recent ill-fated march to Beyers Naude, or was it to Luthuli House, was not only opportunistic but was a deviation from the real and serious issues before the nation. First and foremost, the ANC's jobs plan is premised on the NDP and the NGP which direct us to create an additional 11 million sustainable, decent and quality jobs by 2030, including the public works programmes.

The 6 million work opportunities arise in the ANC manifesto as part a broader jobs plan based on 7 pillars; namely:

Infrastructure investment to unlock economic opportunities, industrialise the economy and create jobs;
Increase investment in the key growth sectors by improving and better aligning existing manufacturing in incentive schemes;
Boost local production by buying local goods, with the state buying 75% of its goods and services from local producers;
Provide more work an training opportunities for the youth, setting aside nearly two-thirds of new infrastructure jobs for the youth;
Encourage businesses to hire more youth through the youth employment tax incentive;
Expand and improve education and training by creating and strengthening the university and FET sectors as well as the SOE artisanal training academies; and
Massively expand the public works programme by creating 6m work opportunities, setting aside about 60% for the youth
The state and private sector must collaborate in a national effort to create jobs. We believe in an active role for the state in the economy, unlike our more neo-liberal opponents who are unreformed market fundamentalists even in light of the global economic crisis and its lessons for developing as well as developed countries. It is simplistic, opportunistic and misleading to claim there can be a single set of programmes that can create decent jobs at once, especially when you either have no plan or have one hatched quickly out of expediency in order to try deceive a nation that keeps on asking the nagging question, what is your plan!

Ownership patterns in our country still reflect racial and gender patterns of colonialism, and the structure of our economy remains backward and inhibiting to job creation - this is what the DA does not want to challenge and would rather die in the trenches to defend. Radical economic transformation is the most critical question the next five years must answer.

Instead of marching to oppose the ANC's plans, they should place their own plans before the electorate and let the people decided - May 7 is the deadline! What was funny though was that whilst most of you never dared to march against our oppression, you are today most vocal about all that is going wrong in our country!

The choices before the people of South Africa today have never been more sharp, stark and grave. As we usher in the second decade of our freedom, the fundamental question before our people is, what type of future do we want and how do we want to get to that Indeed, this is no time for our country to turn backward; now is the time to move South Africa forward, together, as a people!

In 1994, we created the possibility for our country to make head ways towards this future we envisioned in the struggle. Today, as a result of the massive progress we have made, we have reason not only to celebrate what we have achieved, but as a result of this, to be more positive about the future, confident that we will bequeath our children an even better society that is more equal and just, with a thriving and sustainable economy and quality basic services.

The ANC is modest and honest enough still to admit it that still more must be done to carry forward the change. The ANC is an interminable reservoir of hope and national pride. Of course, the ANC never promised our people short cuts and easy resorts to total emancipation. It never said the journey to be traversed in the struggle would be short, easy and laden with gold, milk, honey and all sorts of goodies.

We have been true and honest to our people about the challenges ahead, the sacrifices required and the difficult choices to be made! Yet, we have stayed faithful to this truth, refusing to be detracted by populist and expedient temptations, and we have remained loyal to our course! In the process, as we dirtied our hands in the course of the struggle, and precisely because we are human, we have committed many mistakes.

Nobody involved in the trenches of social change can emerge out of that process clean and without fault. The DA thinks politics is an issue of personalities and not substantive issues. It's about people's lives. We know all they are opposed to, all they regard is wrong with South Africa, but we still do not know how they would fix it, how they'd make it right! We know all they are against, everything they whine and whinge about, but we have no clue what they are for!

Let me join you in quoting Sir Winston Churchill when he said:

"You will never reach your destination if you stop and throw stones at every dog that barks." If I may add, if you stop and bark back at every dog that barks at your unstoppable progress. He further added; "Any idiot can see something wrong. But, can you see what is right?"

The DA's Tim Harris argues we are underperforming our peers. But, he neglect to mention that many of our peers whose growth outperforms ours are coming off a low base. For example, South Sudan and Afghanistan are growing higher than our own. Zimbabwe grew by 10.6% in 2011 and 4.4% in 2012. Does this mean the Zimbabwean economy is outperforming ours?

He also did not mention that the Brazilian economy grew below ours at 0.9% last year after the end of the commodity super cycle. Turkey, which he cited as outperforming our economy, grew by 2.2% in 2013, down from 8.5% in 2011. Ultimately, these fluctuations depend on the economy's reliance on primary products and external shocks; whereas, it is only industrialised economies that are more consistent and this is precisely where we want our economy to go.

What we have heard during the debate on the State of Nation Address is the very sharp and blatant contractions between the message of abiding hope as articulated by the President's State of the Nation Address, and the message of doom and gloom articulated by the vestiges of the past. The DA is incapable of shaking off the past and firmly believes, twenty years post-apartheid, that the best way into the future is by turning backward.

This is why,

they reject black economic empowerment, and rather came up with a policy charade that will leave the current racial and gender economic ownership patterns unchanged;
they reject employment equity, and rather have ensured in their model province that most top management positions in government remain in the control of those constituting only 17.5% of the population of this province;
they reject prefer one in which workers have no rights to organise themselves into unions or fight for a living wage, and yet claim to seek decent jobs - just ask the farm workers of Du Noon if the DA really supports decent work!;
they reject the National Health Insurance, and rather prefer the status quo in terms of which only about 25%South Africans have access to medical aids and hence access to quality healthcare is limited;
they reject the notion of a developmental state that plays an active role in the economy, and
they reject the radical land reform policies of this ANC-led government which will end the landlessness and destitution of the majority!
The DA made extravagant claims regarding their role in job creation in the Western Cape. First, we are very pleased as government that we had excellent job growth in 2013 for the year as a whole in all nine provinces. Every job, whether in Limpopo, or North West, or Western Cape, must be celebrated. As the President said, the economy created 653 000 new jobs and we celebrate this.

In the last three months 2013, we saw an increase of jobs in the Western Cape after a period when it battled with job creation. However, the funny thing is that when jobs are lost in the Western Cape, the ANC is blamed, but when there is jobs growth, then the DA like in the Chicken Little story, is first to claim credit. What do the facts show?

Jobs grew in manufacturing in the Western Cape. I can point to the opening by Minister Patel of the Hisense factory and by Minister Davies of the Telumet factory as examples of national interventions to support job creation in Atlantis last year. I can point to the billions of rands of support offered to various sectors by national departments. I am just struggling to see what support the DA is giving.

Jobs grew in the retail and financial sectors in the Western Cape. Now even the DA spin doctors will find it hard to point to what the provincial government does that can account for this expansion of retail and finance. Jobs grew in the employment of domestic workers in the Western Cape. Okay, perhaps the madams were taking on more workers, but hardly as a result of DA policies. Incidentally, the DA regards these jobs as real jobs, while those who work on expanded public works programmes are seen somehow not to have real jobs.

Jobs actually shrank by 8000 in government services in the Western Cape. Now Mr and Mrs spin doctors, that is actually something that the DA DOES have control over and is directly responsible for! But these are all numbers for just one quarter. If we actually take the past four and a half years, the picture shows that the top-performing province is Limpopo.

When the country should be celebrating having achieved15.2 million jobs, the highest level of employment ever in our history, the Desperate Alternative seeks to bring the country down and claim for itself what it did not achieve. But there is one more matter: let us not play loose and fast with periods. What does the DA's record show over the four and a half years it has been in government in the Western Cape?

Over the almost five years since April 2009, 61% of the new jobs created in the Western Cape have gone to whites, who constitute only 17.5% of the total provincial population. 31% of new jobs went to Coloureds, who make up 53% of the provincial population. Africans actually lost jobs but constitute 28.5% of the population of the province.

Is this what the DA is boasting about? Shame on you, DA. The DA sells itself as the party of delivery. We did an analysis recently of spending by province up to the latest date for which figures are available. It showed that the top four provinces, measured by percentage of spend against budget, were KwaZulu-Natal, North West, Mpumalanga and Eastern Cape.

Where did the Western Cape feature? It is on spot number 8. That is called second last. It only spent 65 percent of its half-yearly budget, or to put it only a province that was placed under national administration did worse. Yet the DA lectures us about delivery. It must clean up its act in the Western Cape or better still, step down and let the ANC run the province. We will be a government of all, not a government for a small group of people living in affluent areas.

Malusi Gigaba is an ANC NEC member and Minister of Public Enterprises. This is an edited extract of his input during the debate on the State of the Nation Address

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