Microeconomic Reform Strategy & Integrated Manufacturing Strategy: Trade & Industry Department Training

Meeting report

ECONOMIC AND FOREIGN AFFAIRS SELECT COMMITTEE
16 February 2005
MICROECONOMIC REFORM STRATEGY AND INTEGRATED MANUFACTURING STRATEGY: TRADE AND INDUSTRY DEPARTMENT TRAINING:

Chairperson: Ms N Ntwanambi (ANC)(Western Cape)

Documents handed out:
CD Rom developed by the DTI - a Summary of the Microeconomic Reform Strategy, Integrated Manufacturing Strategy and Broad-Based Black Economic Empowerment.
Three booklets: The Microeconomic Reform Strategy, The Integrated Manufacturing Strategy and The Road to Understanding Broad Based Black Economic Empowerment.

SUMMARY
Mr L Fick, Department of Trade and Industry, said the DTI had started doing training in 2003 as it was important that those involved in the administration side of the Department’s policies, had a firm understanding of their content. Ms R Fourie, Office of the Director-General, DTI, said the Microeconomic Reform Strategy (MERS) had been the basis of the President’s State of the Nation Address and it also determined the action that would follow. The object of MERS was to remove the constraints to economic growth, equity and employment.

MERS targeted the following sectors: transport, energy, water and telecommunications. Crosscutting issues fundamental to the competitiveness of any economy included human resources development, technology, research and development, access to capital and Infrastructure development. Key performance areas were growth, employment, equity and competitiveness. Every six months, the DTI had to report to Cabinet on progress with regard to MERS.

Ms Fourie said the Integrated Manufacturing Strategy (IMS) was the DTI’s contribution to MERS. IMS was a specific policy aimed at ensuring the South African economy could compete in the global market. Development in the following areas was needed: technology, skills, human resources, access to markets, equity, economic participation, service integration and regional production. IMS embraced all processes necessary to transform natural products into manufactured products with added value and beneficiation, and the related services and activities.

Mr Fick then demonstrated the presentation on CD Rom. The co-operatives and SMME presentations were still being developed for inclusion on the CD Rom.

Discussion
Mr J Sibiya (ANC)(Limpopo) said the Department was trying to put South Africa on the map but the big problem was how it could deal with the issue of technology. The more advanced countries would always be in competition and the local economy rested on their technologies. The "ground was not level". He asked how the Department hoped to get around some of these problems.

Mr D Mkono (ANC)(Eastern Cape) said the problem with improved technology was that it displaced labour. He asked how the Department balanced the two. He also asked what the non-statutory BEE Advisory Council was and how it operated.

Mr K Sinclaire (NNP)(Northern Cape) asked what the Department wanted the Members to do. He was concerned about getting the wonderful things they were describing to rural areas.

Mr Gamede (ANC)(KwaZulu-Natal) asked how the policies targeted the right audience. He asked about implementation of the policies in the rural areas and the size of the manufacturing component. How did one get the policies to the people on the ground?

Ms M Themba (ANC) (Mpumalanga) asked whether anything was being done for disabled people.

Ms N Ntwanambi asked how the policies had measured up at the six monthly reviews and how one took policies from national level to provincial and local government levels.

Ms Fourie said the establishment of the DTI’s Call Centre had been so effective that it has suffered system overload, and thus calls were not being dealt with adequately. This problem was being addressed. She continued there were two areas where the Department could be supported. The first was with policy advocacy – informing voters about the programmes and policies available. Secondly, they could communicate the incentives available. She would relay to the Department that the Members had expressed concern that the incentives were not accessible enough.

Ms Fourie said the Department had just launched the Small Enterprise Development Agency and there would be offices in all districts where the public could go for business support and to apply for finance. These would run alongside Multi-purpose Community Centres.

A further area where the Members could assist was in helping to stamp out corruption. If they became aware about, for instance, charges being set for the development of a business plan, they should immediately report this to the Department.

Ms Fourie said as far as technology was concerned, there were oganisations available for technology development such as the Department of Science and Technology, the Council for Scientific and Industrial Research (CSIR), as well as other initiatives in the manufacturing sector.

She said companies investing in South Africa often did not want to part with their technologies, but that incentives and conditions were in place to cover issues of equity and skills development. Another initiative included an internal monitoring mechanism to ensure skills were being transferred and immigration laws were also being changed to allow highly skilled people to enter the economy.

She continued that as the global economy became more knowledge-intensive and competitive, labour was no longer being absorbed. The Expanded Public Works Programme was designed to deal with such an issue. Some sectors did allow for both advanced technology and high labour input e.g. call centres and agri-processing.

She commented on the changes that were taking place in trade relations since the formation of the World Trade Organisation and G20+. The needs of developing countries were now being taken more seriously. The World Economic Forum supported the development of Africa and there had also been some buy-in from the United States. Besides these multilateral agreements, South Africa had also been involved in bilateral trade negotiations e.g. the South African Customs Union which would benefit the Southern African region. There had also been infrastructure development and the establishment of quality standards between countries so that trade would be facilitated.

Ms Fourie said the BEE Advisory Council was part of the BEE Act and strategy. The President would appoint the Council and it would oversee the implementation of BEE and concretise the Codes of Practice for BEE.

At the six-month review of MERS, output targets had been met but these were not necessarily linked to growth in the economy. Key performance indicators had since been put in place to ensure that tasks would lead to desired outcomes. Much still needed to be done.

On the questions of programmes for the disabled, she did not know of any in her Department. Responding to the concerns about local government competency to introduce the DTI policies and programmes, Ms Fourie said that resources had to be decentralised. Provinces invited the DTI to meet with them and that local government was often included. There was also a Community Public Private Partnership Programme.

Mr Fick added that 375 network facilitators were being trained. They would personally inform communities about incentives and assist in the establishment of business plans. In addition, there were the District Offices of SEDA. The Learning Centre (where he came from) was there to assist the Members to ensure that everyone knew about the DTI and all the incentives that were available.

The meeting was adjourned.