Meeting Summary
The Committee considered further its reports on the Accelerated Shared Growth Initiative for South Africa (ASGISA), its study tour to China and its meeting with South African Airways (SAA). The Committee resolved to effect additional amendments to each of the reports before their adoption at a later stage.
Meeting report
Committee Report on Accelerated Shared Growth Initiative for South Africa (ASGISA)
The Chair stated that the ASGISA Annual Report should have also included financial reports as none seemed to appear in the report given.
The Report would be considered further.
Committee Report on China study tour
Mr C Chang (ANC) took the Committee through the China study tour report and he pointed out that the report had not changed much from the last report that was furnished to the committee. A few changes had however been effected.
He added that the visit to China and Vietnam showed that they had a few political similarities to us South Africa, in terms of the majority party handling the legislature and the executive. These counties had also shot up to one of the main economic blocs in East Asia and this was a result of state owned enterprises (SOE’s). These played an important role with small or medium enterprises whose focus was on export and manufacturing capacity. The countries were not entirely focussed on privatisation but rather management and, as in the case of South Africa, privatisation did not always work.
China’s main industries were strategic industries, such as telecommunications. Vietnam had also begun to copy some bureaucracy lessons from China and they had been doing well politically and economically over the past 5 yrs. The core essence and the conclusion of the tour was that privatisation was not necessarily pivotal, but what was important was management and the skills of the SOE’s management team. Similar restructuring in South Africa would obviously be different from China and Vietnam because those countries did not have the Apartheid legacy which led to geo-demographic problems. Furthermore, different countries all have different infrastructure, and therefore an identical comparison could not be made.
Dr S van Wyk (DA) added that on pg 8 and point 7.1 of the report, they would have to add “foreign investments” and distinguish between Old China and New China. These could be seen as two different cities because of the foreign and Japanese investment which subsequently opened up the markets.
The Chairperson pointed out that this point should perhaps be added to point 7.3. It seemed more fitting there as point 7.1 did not have reference to privatisation.
Dr van Wyk continued that the SOE’s currently in South Africa such as ESKOM and TRANSNET were not the same as those in China. The reason was that there had been no private ownership but rather communism, and therefore China had come a long way with regard to reform. In South Africa the private sector was still widely controlled by interventions and limits to the free market. However these interferences were not too significant to pave the way for reform, making the current economic status trustworthy.
He was struck by the Chinese entrepreneurial spirit, in comparison to South Africa’s talks of a first and second economy. In China there were no sidewalk hawkers. The streets were structurally broad, clean and organised. Another difference between South Africa and China was that South African currently only has eight SOE’s, whereas China has a total number of 350 000.
The Chair stated that it sounded like a fascinating trip. He commented on the extent of job losses in China as indicated in the report as a result of privatisation. This was at an approximate average of 60%, meaning that 10 million people lost their jobs and one half of the population was left unemployed. In the instance of South Africa, such unemployment would be a great political disadvantage. As South Africa was not a one party state and a free market economy it would not be able to function fully as China has done.
The Chair concluded that some amendments would be made to the report, and those would be adopted at a later stage.
Committee Reports on South African Airways (SAA)
The Chair pointed out that further work would have to be done on the draft Report, as it was currently incomplete. The final draft would include a short synopsis of what was presented and thus more modified copies would be handed out at a later stage. The Report would also have to include the Committee’s conclusions on the matter, which included the rise in baggage handling claims and the allegations of retrenchments amidst a lack of personnel.
The meeting was adjourned.
