Growth and Development Summit: briefing

Meeting report

TRADE AND INDUSTRY PORTFOLIO COMMITTEE
26 August 2003
GROWTH AND DEVELOPMENT SUMMIT: BRIEFING

Chairperson:

Presentation by Department on the Growth and Development Summit
Presentation by Nedlac's Business constituency

SUMMARY
The briefing provided an overview of the Growth and Development Summit agreements as well as the key issues involving the Department of Trade and Industry. Nedlac's Business constituency explained the commitments made by business at the Growth and Development Summit. The Committee was concerned that mechanisms to measure outcomes of the Summit were still not clear.

MINUTES
Presentation by Department of Trade and Industry (DTI)
Ms Wendy Dobson (DTI Head of Strategy) provided an overview of the Growth and Development Summit agreement and its processes as well as the post summit processes. Chief among the agreements reached at the Growth and Development Summit include:

-commitment to a post-GDS engagement on employment and range of other matters
-more jobs, better jobs, decent work for all
-addressing the investment challenge
-advancing equity, developing skills, creating economic opportunities for all and extending services
-local action and implementation for development

She pointed out that there was a commitment to engage unions and business to develop and implement sector strategies. To manage trade-offs and local procurement it was agreed that the Proudly South African Campaign needed to be strengthened. The need for a strong support for cooperatives was discussed and it was agreed that an advisory board to advise the department on the issue of cooperatives would be established.

Under the theme of investment mechanism, Khula and IDC were identified as possible mechanisms to improve investment. Furthermore, in conjunction with business and labour a review of input prices would take place on administered prices and import parity prices.

To strengthen local government development, business would mobilise its capacity to work with the Department of Trade and Industry to explore links between Local Economic Development (LED) strategies and sector and sub-sector strategies.

As a way-forward it was agreed that implementation would be monitored by Nedlac's Executive Council and all relevant issues have been placed on the agenda of the Trade and Industry Chamber. Nedlac's Management Committee was preparing an implementation plan of the GDS agreements.

Presentation by Business constituency of NEDLAC
Professor Parsons stated that for the business constituency it was critical to deliver on the promises reached at the Growth and Development Summit, especially considering the need to create jobs and to promote a climate for investment. Hence business has accepted the responsibility to act in concert with other NEDLAC partners, to implement the GDS agreements around job creation, public investment, expanded public works, local procurement, investment challenges, black economic empowerment, as well as promoting literacy, skills and leanerships. He outlined the areas of focus for the business constituency arising from the GDS and these include:

- the need to make the SETAs (Sector Education and Training Authorities) more effective and efficient
- business committed itself to the continuation of the Business Trust beyond its original five-year lifespan
- business also sees a role for itself in the implementation of large-scale public works, and was getting ready to make that a reality
- need for an aggressive strategy to give young unemployed people the opportunity to improve their skills in areas that would enhance their employability

In conclusion he pointed out that what was important for all the stakeholders was to hasten the implementation of the agreements reached at the Growth and Development Summit.

DiscussionMr Lowe (DA) pointed out that the summit had been a summit of good intentions, but how was the department planning to measure outcomes of the summit. He added that in the light of the increasing crime rate and the BEE Bill, which had the potential of deterring investment, how was the department planning to measure investment. Hence there was a need to build in measurables.

Ms September (ANC) thanked the speakers and congratulated the constituencies for coming together to hammer the important issues for the country. She asked how they were planning to link the issues agreed on at the Presidential Job Summit together with the issues agreed on at the Growth and Development Summit.

She enquired what the Nedlac business constituency was bringing as their contribution to the Proudly South African Campaign and whether the Department of Trade and Industry together with other departments had already come up with an action plan. Also what was business bringing as its own programme to stabilise job loses especially in the manufacturing industry?

The Chair noted that the Growth and Development Summit had been a very important process because it was aimed at addressing the structural problems relating to unemployment and around the issue of social investment. He asked what kind of mechanism was envisioned by the department for small business strategies.

Prof. Parsons (Business Constituency) pointed out that there were a series of investments that needed to be made to attract investments for example investment on infrastructure.

Mr Lockey (ANC) asked whether government had plans in place to lower input costs in the economy so as to deal with the problem of restrained downstream industry. He was also concerned that the department had not been instrumental in lowering input costs for the past few years.

Ms Mohamed (ANC) asked how far the department was in the establishment of cooperatives. Secondly when would the Nedlac implementation plan for the Growth and Development Summit be ready? She noted that there was a need to strengthen financial institutions such as Khula or alternatively revisit its mandate.

Prof. Parsons pointed out that it was inevitable that for a summit of that nature to be successfully completed some issues had to be left at the summit. And for South Africa to combat crime, it needed to be tough on its causes. With regards to the question of administered prices he explained that there was a need for National Treasury to come up with a plan to administer prices in order to bring down the interests rates.

In answer to Ms September, he pointed out that the Proudly South African Campaign was one of the overlapping issues between the Job Summit and the Growth and Development Summit.

As for cooperatives, he pointed out that the commitment by business was only at the level of an agreement and there was no big role assigned to business in that regard.

Ms Dobson (DTI) explained that the GDS process had instilled greater confidence which was key for economic growth. However the agreement at the summit did not represent the totality of all the issues needed to attract investors. The department was working with industry to address some of the immediate problems relating to administered prices and the strategies around cooperatives was being discussed through the Nedlac structures. However in order to improve the input prices, it was important to increase the level of competition and at the same time be able to balance local input prices with the export prices.

In conclusion the Chair noted the Committee's support of the advancement of the Growth and Development Summit agreements. He asked the department to inform the Committee when Nedlac was going to make an assessment of the implementation of the GDS agreements.

The meeting was adjourned