E249: 30th June 2009

Honourable Chairperson,

The global economic crisis, which is currently causing so much hardship and suffering, has highlighted areas of concern and exposed us to the harsh realities of the global economy. It has also emphasised just how connected the world's economies are, and this must be borne in mind when developing economic policy. This crisis has caused many businesses to fail and many more are now struggling for survival. 
 

Sectors that are so critical to our economy such as the motor, mining and manufacturing sectors have been plunged into crisis.

The saddest result of this recession is the devastating effect that it is having on ordinary South Africans. Thousands of people have already lost their jobs, some of whom are the sole breadwinners in their families, and many more are not secure in their employment. It has been reported that nearly 180 000 jobs were lost to the economy between January and March this year. Once again it will be the poorest members of our country who will suffer the most and will be thrown even deeper into the depths of poverty and despair.

The Department of Trade and Industry aims to lead and facilitate access to sustainable economic activity and employment for all South Africans, so in line with this aim the department must play a leading role in guiding South Africa through this crisis and in trying to lessen its harsh impact on the masses. It must also be the main player in leading us onto a positive growth trajectory once again, by developing and properly implementing policies that will maximise our advantages during times of prosperity and minimise the negative impacts.

It could be argued that during the times when the commodity prices were so high South Africa did not take full advantage of the situation, and in times of relative economic prosperity not enough jobs were created to meet the demands of our growing population. In this regard the Department of Trade and Industry must look at its various policies and the impact that they have had as well as identify areas where they can be strengthened or even changed. In the long term our economy needs to be growing at a rate higher than it has been in the past if we are to make real inroads into the high unemployment levels and compete with other emerging economies.

Economic reform is needed in order to address the past economic injustices and empower those who were previously disadvantaged.  However government's affirmative action and BEE policies, and the manner in which they have been implemented, must be reviewed. They have succeeded in making a select few very wealthy while the majority who were economically ostracised under apartheid continue to be excluded and have generally not benefited from these programmes.  Programmes of this type need to be more broad-based and benefit as many people as possible if they are to have the intended effect and even attempt to redress some of the economic inequalities created under apartheid.

The promotion of small businesses and co-operatives is an area that also needs to be addressed as it can play a leading role in the creation of employment and in helping us out of the current economic malaise. There are, however, still too many obstacles for people wanting to start small businesses. Access to finance and other support, for example, is still difficult to come by for the average person on the street. The support and services offered by the institutions set up to deal with these issues and assist SMMEs and entrepreneurs is not always efficient. The effectiveness of these institutions and the impact they have had on promoting and supporting SMMEs and growing the economy must be evaluated and the areas of weakness must be strengthened. There is much room for improvement in this area.

Honourable Minister this Department is crucial to the successful economic development of our country, and while the current recession will hamper efforts at economic development and growth it does present an opportunity for the department to step up its efforts in promoting SMMEs and co-operatives which do have the ability to create employment during these tough times.

The IFP supports this budget vote.

I thank you.