NATIONAL ASSEMBLY: 18th February 2009

Madame Speaker, 

The impact of the financial crisis has been devastating and not just for the sectors and countries where it originated, but for the global well being as a whole. The extent of globalisation and the integration of global economies is so great that there isn't a country in the world that is totally unaffected by this crisis. Anybody who believes that we are excluded and unaffected is deluded as South Africa is already feeling the negative effects of this crisis and the situation will get worse before it improves. We have not felt the full impact of this crisis yet and that is a frightening prospect.

Amongst other things, this crisis has highlighted the need for a strong, efficient regulatory and monitoring environment. It also has long term implications for the global economy and the way in which business is conducted.

The relationships and boundaries between governments and businesses will also most likely be reviewed and the regulation of the financial markets will change, as will the direction of globalisation.

The IFP does not advocate unbridled, laissez faire capitalism associated with a minimalist state. We recognise the imperatives driving our need to be a developmental state, but this does not imply an over-interventionist state whose actions unnecessarily limit the growth potential of our economy. Thus, though we need to recognise an important role for the state, we believe more emphasis must be placed on the role of the private sector in generating growth and jobs. And we need to ensure that the negative consequences of high growth can be dealt with through other types of state intervention so that whatever we do to promote growth and jobs, we also protect our more vulnerable citizens and provide a safety net for the poor.

This crisis is huge and a concerted, coordinated effort is needed from all role-players if we are to limit its damage and be in a position of relative strength once we emerge from this downward cycle. The developmental state does have a very important role to play in this in this regard, especially with concern to the provision of safeguards and protection for the poorer members of our society. It must also ensure that our growth path is more balanced and that the benefits and opportunities from globalisation are equitably shared. If we are to achieve any sort of sustainability and be in a position to prosper once we are out of this trough, great disparities that still exist must be corrected.

While it is understandable that during this time of turmoil people will be afraid and some companies will retreat to the relative safety of home, we must not let the current depressing condition detract from the benefits that globalisation and economic integration have brought, we must instead use the lessons learnt from this crisis to review our approach to and management of these issues. If we are to reach our economic growth and other targets then countries need to find ways dealing with international economic issues in ways that are best suited to their individual needs and specific circumstances, we cannot apply a one size fits all approach. It is imperative that we develop a uniquely South African approach that will address our particular needs and ensure that growth and development are shared equitably amongst all South Africans and not a select few. For this to happen, government, labour and business need to find the right balance.

Contact:
Narend Singh MP             083 788 5954 or
Liezl van der Merwe,         083 611 7470.