During this year’s debate, as in most of Trade and Industry’s debates in the past and almost certainly in the future, the issue of the importance of economic growth and foreign investment will be central and rightly so.
South Africans, business, government, including this department of Trade and Industry, the private sector, all working together have made sufficient progress on economic growth and structural reforms – but political instability has put us on a slippery slope towards a self-perpetuating, vicious cycle of abject poverty and increasing inequality.
For DTI more directly, business and consumers are battling to cope in this low growth environment, while the spectre of additional interest and fuel prices hikes looms, threating to curb constrained spending even further.
This will affect our position on ease of doing business even further as South Africa’s growth largely hinges on spending.
The National Credit Regulator is doing its best to protect consumers against exploitation and in communicating the perils of over indebtedness and its consequences.
In the real world, consumers are continuously driven in this current financial climate by feelings of anxiety about their ability to make ends meet and this unfortunately drives them to even more desperate measures especially in securing more debt and borrowing even more expensive money.
Government has started creating a new class of black industrialist through the DTI, which has not really had the intended effect or success, creating a new elite isn’t an obvious panacea for the jobless masses anyway!
Further regulation of the steel industry won’t work either, there are always unintended and unforeseen consequences. The custom duty introduced last year already serves as a slow poison, killing the downstream industries.
Multinational motor groups were expected to invest approximately R8 billion into local manufacturing operations this year. This will probably not happen, as apart from political instability, Min Davies policy enforcement, local content up to 60% from unskilled manufacturers, and the proposed empowerment code as it stands, is unworkable and would be forcing this R50 billion vehicle manufacturing industry to leave, leaving up to 200 000 people unemployed. Just last week we saw GM announce that it will shutting down operations in SA by 2018.
Through special economic zones and other measures, government desperately wants to create new jobs. But these intentions are crippled by policies and practices that were designed to achieve other political ends.
Until we wipe those away we won’t see any meaningful shift in the unemployment rate
The Dti must now realize that welfare policies only affect a selective few and do not positively promote economic growth or job creation.
Around us countries like Botswana adopted a pro-business and free-market based approach. This department should be the grand advocate of business and market concerns within the collegial thinking of cabinet, but it is not.
It kow·tows along with the mindset of a welfare state which will never become a developmental state.
In conclusion, we believe that if we are honest about wanting to create a genuinely viable and internationally competitive industrial basis for our country, we must provide short-term incentives, subject to review and penalty clauses.
I thank you.
Hon JA Esterhuizen, MP, on 083 379 2391