Transcript BSA presentation to PC on Labour

BUSINESS SOUTH AFRICA
PRESENTATION TO THE
PARLIAMENTARY PORTFOLIO
COMMITTEE ON LABOUR
20 MAY 2002
CAPE TOWN
Proposed agenda for Portfolio Committee on Labour
Cas Coovadia:
Introductory remarks
Ben van der Ross:
Overview of BSA
Progress being made with the unity processes with the
BBC
Cas Coovadia:
Black economic empowerment
Roger Baxter:
Breaking through the economic growth barrier in South
Africa
Primary Functions of Business Organisations
1.
Umbrella Body/ies
Represent the interests of business as a whole
Promote / protect the macro interests of business in respect
of national matters such as legislation, taxation, labour issues,
etc.
Represents business internationally.
2.
Chamber Movement
Concentrates on local level service delivery and direct
support to its members (corporates, to a large extent - smaller
business).
Current Structure of Organised
Business in South Africa
Business South Africa
(umbrella body)
AHI
Agri SA
Banking
Council
Multi-sectoral /
Chamber
Organisations
SACOB
etc.
Sectoral
Organisations
See slide 3
for full list
SAF
Unique - largest
60 companies
only
Uni-sectoral Members of Business South Africa
•Agri SA
•Banking Council
•Building Industries Federation of SA (BIFSA)
•Chamber of Mines of South Africa
•Chemical and Allied Industries’ Association (CAIA)
•Insurance Industries Employer Association (IIEA)
•Life Offices Association (LOA)
•National Association of Automobile Maufacturers of South Africa (NAAMSA)
•Printing Industries Federation of South Africa (PIFSA)
•Retailers’ Association
•Road Freight Employers Association (RFEA)
•South African Federation of Civil Engineering Contractors (SAFCEC)
•South African Insurance Association (SAIA)
•South African Petroleum Industry Association (SAPIA)
•Steel and Engineering Industries Federaiton of South Africa (SEIFSA)
•Sugar Maufacturing and Refining Employers’ Association (SMREA)
Black Business Council
(umbrella body)
NAFCOC
ABASA
Multi-sectoral /
Chamber Organisations
FABCOS
ABSIP
See slide 5
for full list
Various professional and
business organisations and
associations
Black Business Council Members
•Association for the Advancement of Black Accountants of Southern Africa
(ABASA)
•Association of Black Securities and Invesment Professionals (ABSIP)
•African Minerals and Energy Forum (AMEF)
•Black Information Technology Forum (BITF)
•Black Lawyers Association (BLA)
•Black Management Forum (BMF)
•Congress of Business and Economics (CBE)
•National Black Business Caucus (NBBC)
•South African Black Technical and Allied Careers Organisation (SABTACO)
•South African Institute of Black Property Practitioners (SAIBPP)
•South African Communications Forum (SACF)
•Black Business Executive Circle (BBEC)
The Business Unity Process
1. At overall level
Merger of
BBC / BSA
Membership will accommodate at
least all of the current members of
BBC and BSA
The Business Unity Process
2. At chamber level
AHI
FABCOS
NAFCOC
SACOB
These organisations will
develop an effective
working arrangement to
co-ordinate their
operations and agree how
they will relate to the
merged BBC / BSA.
Growth and Development Summit
* Driven by the Department of Labour
* NEDLAC is implementing agency
* 4 agreed themes
• More Jobs, Better Jobs - Decent Work for All;
• Addressing the Investment Challenge;
• Advancing Equity, Developing Skills and Creating
Economic Opportunities; and
• Local Action for Implementation and Development.
Format of Summit
Not yet final but expect:
- keynote address by President;
- addresss by each constituency;
- signature of pre-negotiated agreements
The Agreements
• Currently being negotiated by Task Teams
• Business representation on each Task Team - 3 from BBC / NAFCOC
and 3 from BSA
• Focus is on identifying a limited number of specific, substantial, but “doable” objectives.
• Too early to predict exact outcomes
However
1. Issues on which consensus is already emerging are:
•
an expanded public works (or Public Employment)
programme; and
•
focus on the learnerships initiative.
2. Many other important and relevant issues are being identified.
3. Will have to agree processes to take these forward.
BLACK ECONOMIC
EMPOWERMENT
Broad Principles
• Historical legacy
• Socio-political imperative
• Recognition of economic imperative
• Sound business principles – sustainability
• Government role in addressing non-commercial risk
• Specific areas
• Target group
• HDSA / Black
• Consistency
• Funding
• Capacity of financial sector
• Effective utilisation of government funds
• Funding – continued
• Donor and international funds
• Structure into PPP?
• Utilisation of mechanisms in Strategy Doc?
• Prioritisation
• Scorecard
• Support balanced scorecard
• BEE Advisory Council
• Business representation
• BBC / BSA Interim Leadership
• Access to financial services
• Dealt with in Financial Sector Charter
• Targeted investments
• Dealt with in Financial Sector Charter
• Employment Equity / Skills Development
• Mining and Petroleum Industry Charters
• Learnerships
• Intervention in school and university curricula
• SETA’s
• Ownership
• Direct / Indirect
• Broad-based
• Capacity of trustees / fund managers
• Government role
• Control
• Fulcrum of power
• Indirect ownership representation
• Executive management
CONCLUSION
• Business – partners with government
• Need for sustainability
• Sound business practice
• Funding
• Positive energy
SOUTH AFRICA AT A CRITICAL ECONOMIC
THRESHOLD: KEY ISSUES TO BREAKING
THROUGH THE ECONOMIC GROWTH
BARRIER?
PLACING SOUTH AFRICA SQUARELY ON THE
GLOBAL INVESTMENT RADAR SCREEN
Thailand
Brazil
Malaysia
China
South
Africa? Mexico
Singapore
Ireland
Argentina
Hong Kong
Chile
Korea
Poland
South Africa, towards a shared vision
South Africa is a remarkable country. Arising from the
ashes of its dark apartheid past, the country experienced a
smooth and peaceful transition to democracy. A solid
foundation for democracy and economic prosperity has
been laid. The focus is now shifting towards realising the
economic miracle.
A vision of a prosperous fast growing South Africa which
provides sustainable employment opportunities and rising
living standards to all its people is a shared vision that all
South Africans can aspire to.
Significant achievements in the new democracy
Significant progress has been made in ensuring that South Africa’s young
democracy is built on solid foundation.
Institutions that support democracy have been put in place.
Fiscal and monetary policy have achieved a much more stable
macroeconomic framework.
Trade & exchange control liberalisation have opened up South Africa’s
economy to global forces including access to new markets.
South Africa, at the corporate, government and civil socdiety levels, is
playing a much more significant role in global debates (e.g. in multilateral
discussions)
There is no doubt that these achievements have contributed to a more
sustainable and higher economic growth platform for South Africa.
South Africa has a number of advantages and strengths
South Africa has a number of advantages, some absolute, which form part of
the attractions of the country for domestic and foreign investment:
Abundant natural resources and natural attractions.
World class infrastructure.
A well-developed and efficient capital market.
A world class banking and financial services sector.
World class companies in a number of sectors.
The world’s cheapest industrial electricity price with reliable supply.
Abundant supply of labour.
A government which is willing to globalise the economy.
Cheap real estate costs.
WEF survey: the level of sophistication of
financial markets is higher than international
norms (1=strongly disagree; 7=strongly agree)
N
re
a
Ko
d
Po
la
n
M
al
ay
si
a
y
ke
Tu
r
an
d
ew
Ze
al
la
nd
il
az
Br
Ire
ut
h
So
Au
st
ra
Af
ric
lia
a
7
6
5
4
3
2
1
0
Opportunities are opening up
•· As market barriers are reduced so new market
opportunities for South African exporters are being realised
(AGOA, EU-SA FTA, US-SACU FTA, etc.)
•· Access to global capital and foreign direct investment in
the rapidly globalising world economy is resulting in new
opportunities for investment, technology transfer and
improved economic performance in South Africa.
•· NEPAD and increased regional integration will help
stabilise the region and reposition Africa for the 21st
century.
SETTING THE SCENE: WHERE IS SOUTH
AFRICA AT?
SOUTH AFRICA’S ECONOMIC
PERFORMANCE:
•Yes good progress has been made in stabilising the macroeconomy, reducing inflation, reducing the budget deficit,
stabilising the fiscal situation, relaxing exchange controls,
liberalising international trade, introducing a new skills
development paradigm and stabilising the labour market.
•But, South Africa’s investment and growth rates remain
far too low to tackle high unemployment and to raise living
standards.
SOUTH AFRICA STANDS AT A CRITICAL
ECONOMIC THRESHOLD
The economic growth trajectory of the economy needs to be raised
to a significantly higher level through a massive expansion in the
growth of economic opportunity and investment.
Failure to raise the growth trajectory from the current 2.5% per
annum rate, given South Africa's 7.6 million unemployed people,
may undermine the country’s long-term future.
Organised business rejects the latter scenario as unacceptable. But
we must understand the dangers of not raising the economic growth
trajectory.
Non-agricultural employment, 1993 and 2001
(1995=100)
120
1995=100
100
80
1993
2001
60
40
20
0
General
government
Parastatals
Mining
Manufacturing Other private
sector
Comparison of the share of income for poor
households and rich households
%
70
60
50
Share of
income of
poorest
20%
Share of
income of
richest
10%
Gini index
40
30
20
10
0
Br azil
Sout h Af r ica
Malaysia
Tur key
Ir eland
Aust r alia
Poland
Kor ea
30
6
25
5
20
4
15
3
10
2
5
1
0
0
1950's
1960's
GDS/GDP
1970's
1980's
Source: SARB
1990-94 1995-2001
GFCF/GDP
Real GDP grow th
% GDP gropwth
rate
as a % of GDP
South Africa, savings(GDS) and investment
(GFCF) to GDP ratios and GDP growth rates for
the decades 1950 to present
SOUTH AFRICA’S ECONOMIC
PERFORMANCE RELATIVE TO
COMPETITORS:
•Low savings and investment rates.
•Little foreign direct investment.
•Relatively low economic growth rates.
•High unemployment.
8
6
5
4
3
2
1
GDS/GDP%
GFCF/GDP%
SAf
ric
a
il
Br
az
nd
la
Po
rk
ey
Tu
nd
NZe
a
la
ia
Au
st
ra
l
nd
la
Ire
ea
0
GDP growth rate
% growth rate
7
SKo
r
al
ay
si
a
45
40
35
30
25
20
15
10
5
0
M
% of GDP
Savings & investment rates as a % of GDP
for the decade of the 1990's
US$ m ns
FDI into key emerging & developed
economies, 1998-2000
30000
20000
1998
1999
2000
10000
SAf
ric
a
ey
rk
Tu
Po
la
nd
M
al
ay
si
a
NZe
al
an
d
ea
Ko
r
lia
Au
s
tr a
d
la
n
Ire
Br
a
zil
0
Unemployment as a % of labour force
average 1990-99 and 2000 (source:WB)
%
35
30
25
20
15
10
5
0
South
Africa
Malaysia
South
Korea
Turkey
1991-1999
Brazil
2000
New
Zealand
Australia
Ireland
Poland
Private Capital Flows to Emerging Market
Economies, 2001
Asia/Pacific
46%
Africa/M iddle
East
7%
Europe
13%
Latin
America
34%
Ire
la
nd
us
tra
lia
15000
10000
Br
az
il
Tu
rk
ey
So
ut
h
A
fr
ic
a
Po
la
nd
Ze
al
an
So
d
ut
h
Ko
re
a
M
al
ay
si
a
Ne
w
A
US$ per capita (constant 1985 $)
Real GDP per capita in 1985 US$ terms,
1993 and 1999
20000
1993
1999
5000
0
SOUTH AFRICA NEEDS TO RAISE THE
ECONOMIC GROWTH TRAJECTORY TO
A HIGHER LEVEL THROUGH:
•A massive expansion in the growth of
economic opportunity and investment.
•A massive expansion in the skills base of the
broad population to ensure all people participate
in the growth of opportunity.
In general, for an economy at South Africa’s
stage of development the key driver of economic
growth will be supply-side investment.
•That fuels an export boom.
•Raises employment and disposable incomes.
•That allows steady growth in the size of the
domestic market.
•That encourages foreign participation in our
economy (FDI and portfolio investment).
IS SOUTH AFRICAN BUSINESS ON AN
INVESTMENT STRIKE?
Total fixed capital stock in South
Africa, government vs private sector
Private
business
enterprises
54%
General
government
46%
Total net capital formation for South Africa by
organisation 1991 to 2001, nominal terms
250000
206756
200000
R' millions
150000
100000
50000
32888
0
-50000
-37779
-100000
General
government
Public corporations
Private business
enterprises
Total net capital formation for South
Africa by organisation, nominal terms
30000
25000
R' millions
20000
15000
10000
5000
0
-5000
-10000
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
General government
Public corporations
Private business enterprises
What factors drive investment?
•The availability of investment projects (which are
currently closed in the telecom, energy, rail, port arenas!)
•The size of the domestic market and access to other
markets.
•The availability of the factors of production (skills,
capital) at world competitive prices.
•Ultimately investment decisions are driven by risk and
cost adjusted rates of return criteria.
•If the costs and risks of investing in South Africa are too
high – investment will not take place
INVESTMENT DECISIONS ARE DRIVEN BY THE
RISK AND COST ADJUSTED RATE OF RETURN
RELATIONSHIP
RISKS:
RISK &
COST
ADJUSTED
RETURNS
=
REVENUE
COSTS:
•Economic
growth
•Cost of capital
•Cost of labour
•Cost of technology
•Cost of intermediate
products
•Costs of logistics
•Market
contestation
•business &
financial risks
•Property rights
•Legislative
•Political
•Security
•Labour market
•Marketing
The investment hurdle rate = rate of return required by an investor after
covering the risks and costs of a project over the long-term.
THE CASH RECEIPT QUEUE, WHAT IS
IN IT FOR THE INVESTOR?
REVENUE FROM SALES
Minus
Suppliers
Employees
THE QUEUE
Lenders
Government
Reinvestment
What is in it for the INVESTOR?
INVESTOR
THE INVESTOR STANDS TO BENEFIT LAST
IN THE QUEUE
The key point being made here is that there is a pipeline
of costs (taxes, interest payment on debt, currency
depreciation, labour costs, logistical costs, etc.,) which
are taken from a projects return before the investor
(shareholder) see any return on money’s invested.
Any issue that affects the distribution of the benefits or
costs from an investment will raise the risk premium,
raise the cost of capital, raise investment hurdle rates
and lower investment
EVALUATING INVESTMENT DESTINATIONS
Rate of
return %
USA
CFROI: 10.5%
CoC: 5.4%
South Africa
CFROI: 8.7%
CoC: 8.6%
5.1% point
positive
spread
Cost of capital
0.1% point
neutral
spread
Comments:
Japan
CFROI: 1.4%
CoC: 5.2%
-3.8% point
negative
spread
Excellent risk & cost
Neutral risk & cost Negative risk & cost
adjusted rate of return adjusted rate of return adjusted rate of return
which will encourage
which results in a
which will result in
expansion and further focus on cost cutting severe restructuring
investment
and minimal
and disinvestment
investment
HOW DOES SOUTH AFRICA PERFORM ON THE
COST/RISK SIDE OF THE INVESTMENT
EQUATION?
•The real cost of capital is too high (interest rates, tax rates,
currency volatility).
•The cost of labour per unit of output is high (apartheid
education, poor skills profile, poor management practices,
etc.).
•The costs of logistics are too high (the lack of competition
in service provision results in high prices which
disadvantage exporters).
Effective company tax rates, 2001
% 25
(for an average manufacturing company)
20
15
10
5
0
Ireland
S-Korea
Poland
Malaysia
S-Africa
10
WEF: Survey of perceptions about incentives
for investment (1=poor incentives, 10=max
incentives)
8
6
4
2
0
Ireland Malaysia
Brazil
Turkey
South
Korea
Poland
South
Africa
Real cost and risk adjusted rates of
return for 2000
12
10
8
6
4
2
0
% RACARR
Ireland
Malaysia
Return on investment
N-Zealand
Australia
Cost of capital
S-Africa
RACARR
The relative cost of labour is too high.
•Yes basic wage rates per hour in manufacturing are mid-range
versus the comparators and the labour market is more stable (i.e.
not confrontational).
•But the reality is that the relative cost of labour per unit of output
produced is just too low.
•Such productivity levels are as a result of apartheid education,
past introverted industrial policy which undermined skills
development, poor management practices, some rigidity built into
labour laws and inappropriate use of technology.
•Healthcare issues and declining human development index are
concerns.
Manufacturing value added per $ of labour
purchased, 1999 vs 1985
6
5
1985
1999
US$
4
3
2
1
0
Ireland
Korea
Turkey
Brazil
Malaysia
USA
Poland
South
Africa
New
Zealand
Changes in manufacturing value added per $ of
labour purchased versus changes in
employment 1999 vs 1985
% change
80
60
value added per $ of labour
purchased
40
employment
20
0
-20
-40
Ireland
Korea
New
Zealand
Turkey
South Africa
Brazil
Poland
Ratio of labour output to labour cost in
manufacturing, 1999 data, source: World Bank
database
5
Ratio
4
3
2
1
0
Poland
Brazil
Turkey
Korea
Malaysia
South
Africa
6
WEF survey: Pay is directly linked to
productivity? (1=little link; 7=maximum
link)
5
4
3
2
1
ic
a
fr
SA
Br
az
il
Tu
rk
ey
Ire
la
nd
ia
M
al
ay
s
Po
la
nd
SKo
re
a
us
tra
lia
A
NZ
ea
la
nd
0
Changes in remuneration by skill class
real terms, 1970-1999
-20
30
Unskilled/semiskilled
Skilled
Highly skilled -10
80
Change in remuneration %
130
180
230
280
260
10
Unemployment by skill class, 1970 versus
1999
Unemployment rate%
0
10
Unskilled/semiskilled
Skilled
Highly skilled
20
30
40
50
60
6
55
1
28
0
0
1970
1999
CAN THE SOUTH AFRICAN ECONOMY
CREATE EMPLOYMENT?
Formal sector employment trends, change
in employment by education 1995 vs 1970
employment gain/loss (numbers)
-3000000
No education
Lower than standard 5
Standard 6 to 9
Matric
Tertiary
-2000000
-1000000
0
1000000
2000000
Labour force absorption rate as % of total formal sector
employment
90
80
70
60
50
40
30
20
10
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
0
Qualification profile of the SA population 2001
Grade 8-12
57%
NTC 1-3
1%
Diplomas
5%
Degrees/higher
3%
Other/unspecified
1%
None
7%
Grade 0-7
26%
WEF: The school system excels in math and
basic science education (1=strongly disagree;
7=strongly agree)
6
5
4
3
2
1
a
il
Af
ric
az
ut
h
an
d
Ze
al
Br
So
N
ew
Po
la
n
d
a
si
al
ay
M
re
a
Ko
la
nd
Ire
lia
st
ra
Au
Tu
r
ke
y
0
Tertiary students in science, maths and
engineering as % of total tertiary students
40
35
30
25
20
15
10
5
0
Korea Australia Ireland
Brazil
Turkey
New
Zealand
South
Africa
Trends in human development (UNDP Human
Development Index)
1
Australia
0.9
Ireland
New Zealand
0.8
HDI
Korea
Poland
Malaysia
0.7
Brazil
Turkey
0.6
South Africa
0.5
1975
1980
1985
1990
1995
2000
Health indicators, malaria and TB cases per 100 000 population and
HIV/AIDs prevelnce rates for ages 15-49 (UNDP) 2001
350
20
250
15
200
10
150
100
5
50
0
0
New
Zealand
Australia
Korea
Malaria cases per 100 000 pop
Poland
Turkey
Ireland
TB cases per 100 000 pop.
Malaysia
Brazil
South
Africa
HIV/AIDs prev rates (% age 15-49)
% HIV/AIDs rates
cases per 100 000 pop.
300
Numbers of emigrants
Professional emigration from South Africa,
STATSSA vs destination country data
(Australia, New Zealand, Canada, USA and UK)
6000
5000
4000
3000
2000
1000
0
1989
1990
1991
1992
STATSSA
1993
1994
1995
1996
Destination country data
1997
-3000
Transport,
delivery &
communications
Service
Artisans,
apprentice &
related
Managerial,
executive &
admin
Clerical and
sales
Unspecified
occupations
Professional,
semi-prof. &
technical
Number
Immigration, emigration and net gain (loss) for
South Africa by occupation, 2000
500
0
-500
-1000
Immigrants
-1500
Emigrants
Net loss
-2000
-2500
10000
8000
6000
4000
2000
Telephones per 1000 residents
d
Ire
la
n
d
al
an
Ze
K
or
ea
N
ew
A
us
tra
lia
rk
ey
Tu
Br
az
il
M
al
ay
si
a
Po
la
nd
th
A
fri
ca
0
Electricty use per capita (kWh)
Kwh/capita
1200
1000
800
600
400
200
0
So
u
phones per 1000 people
Technology diffusion, old technologies,
telephones per 1000 people and electricity
consumption per capita
PCs per 1000 people
K
or
ea
lia
A
us
tra
d
Ze
al
an
d
N
ew
Ire
la
n
si
a
M
al
ay
d
Po
la
n
fri
ca
A
th
So
u
Tu
rk
ey
500
450
400
350
300
250
200
150
100
50
0
Br
az
il
per 1000 people
Technology diffusion, new technologies,
PCs and Internet users per 1000 people
Internet users per 1000 people
score
WEF survey: "The overall infrastructure is
among the best in the world"
9
8
7
6
5
4
3
2
1
0
7.6
7.1
4.0
South
Africa
Poland
5.6
5.8
Ireland
Turkey
7.9
8.1
4.4
Brazil
New Malaysia Australia
Zealand
1 = strong disagreement 10 = strong agreement
fr
ei
gh
to
pe
r
at
io
ns
SA
A
re
ig
ht
Po
rts
irp
or
ts
Ra
il f
A
Co
m
m
Ro
ut
er
ad
ra
in
il
fr
as
tru
ct
ur
e
Pi
pe
lin
es
Ro
ad
Estimated capital spending as a % of LT capital
requirements
80
70
60
50
40
30
20
10
0
R' per TEU
Typical waterfront charges
Terminal
1600
1400
1200
1000
800
600
400
200
0
Ancillary
Port Authority
Durban
Melborne
Brisbane
Auckland
Singapore
WEF survey: "Personal security and
private property are properly protected"
6.3
7.0
6.8
7.2
4.6
3.8
1=strong disagreement 10=strong agreement
ra
lia
us
t
A
Ire
la
nd
Ze
al
an
d
ia
N
ew
al
ay
s
M
K
ou
th
S
Tu
rk
ey
or
ea
l
ra
zi
B
P
fri
c
ol
an
d
1.8
A
ou
th
S
8.4
8.0
a
Score
9
8
7
6
5
4
3
2
1
0
PRESIDENT MBEKI IN HIS 2001 STATE OF THE
NATION ADDRESS TO PARLIAMENT MADE THE
FOLLOWING STATEMENTS:
“..the reality remains that our rate of growth is still too low as are the aggregate
savings and investment rates. Similarly, the levels of poverty, unemployment
and underdevelopment in some parts of our country are too high….
The objectives we seek to achieve are moving the economy onto a high-growth
path, increasing its competitiveness and efficiency, raising employment levels
and reducing poverty and persistent inequalities.
To improve our competitiveness, we must lower input costs throughout the
economy.
Accordingly, we have decided to go over to a managed liberalisation of the
energy, transport and telecommunications sectors.”
Cape Town, 9 February 2001.
Table : National Enterprise Survey: Obstacles to investment
rated as “severe” or “insurmountable”
Foreign owned
%
Locally owned
%
Crime & related social
problems
High level of interest rates
Labour regulations
Poor sales outlook
42
56
The level of the exchange rate
Exchange rate instability
30
30
Crime & related social
problems
High level of interest rates
Labour regulations
Fluctuations in the interest
rate
High company taxes
Uncertainty
of
labour
regulations
Source: National Enterprise Survey by Dr S. Gelb
40
35
31
51
41
40
39
39
Table: National Enterprise Survey: Government
understanding of business
Ownership How well do
government
officials
understand the
problems faced
by business?
Foreign
Badly (38%)
Is government policy To what extent does the
coherent and
government take into
predictable?
account concerns of
business when
introducing policy?
Unpredictable (46%)
Hardly ever (49%)
Local
Unpredictable (39%)
Hardly ever (49%)
Badly (42%)
Source: National Enterprise Survey by Dr S. Gelb
Table: Reliability and cost of infrastructure
Type of infrastructure
Reliability and speed of postal services
Cost of postal services
Reliability of power supplies
Cost of power supplies
Cost of local/national telephone calls
Cost of international telephone calls
Reliability of telephone system
Source: National Enterprise Survey, Dr. S Gelb.
Firm
ownership
Foreign
Local
Foreign
Local
Foreign
Local
Foreign
Local
Foreign
Local
Foreign
Local
Foreign
Local
Obstacle (%
respondents)
55
48
39
45
24
24
21
27
58
64
53
44
45
44
of Benefit
(%
respondents)
8
10
6
5
31
26
18
8
6
5
5
4
15
14
of
Heritage Foundation Economic Freedom Rankings
(1=free, 5=repressed), 2001
0
Aus tra lia
B o ts wa na
Na m ibia
S o uth Afric a
M a uritius
M o za m bique
S wa zila nd
Za m bia
Le s o tho
Ta nza nia
M a la wi
Zim ba bwe
1
2
3
4
Score
5
BUSINESS UNDERSTANDS THE PRIORITIES:
•Transformation and greater inclusion in the economy.
•Bridging programs for school leavers (standard grade matric to higher grade
matric - especially maths and science).
•The need for a quantum leap in skills development (special focus on
learnerships).
•The need to have flexible immigration laws to fill the skills gap in the interim.
•The vital need to retain skills.
•Short-term measures for dealing with the structural unemployment problems
(such as extended public works programmes).
•Helping to reduce bottlenecks to public sector investment programmes
(including the use of public-private partnerships - clinics, prisons, road
infrastructure, etc.).
BUSINESS UNDERSTANDS THE PRIORITIES:
•Engaging with government to deal with efficiency and cost competitiveness of
key economic infrastructure (ports, railways, municipalities, etc.).
•Investigating how to raise domestic savings (which will allow lower interest
rates and provide greater capital for investment).
•Engaging with government on how to lower the cost of capital (which will
then increase investment, economic growth and employment).
•Lowering the barriers to entry to business - especially small business.
(Business is proposing the investigation of a Regulatory Impact Assessment
Strategy to gauge the impact of new legislation and regulation for all parties to
negotiation/consultation processes).
•Lowering the negative impact of crime on investment and the economy
(Business Against Crime Initiative).
•Reducing marketing risks - especially for SA exports to key foreign markets.
•Improving the image of SA as an investment destination.
GIVEN THE COMPLEXITIES OF THE
ISSUES THAT NEED TO BE RESOLVED
•No single constituency can solve the issues.
•A South Africa Incorporated approach is vital.
•Lets work together to tackle the issues to ensure
a vision of a prosperous, inclusive future is
achieved.
CONCLUDING THOUGHT
“Economic growth is not a mysterious force that strikes unpredictably or
whose absence is inexplicable.
On the contrary, economic growth is the fruit of two forces: the ability of
people to recognise opportunities, on the one hand, and the creation by
government of a legal, fiscal, and regulatory framework in which it is
worthwhile for people to exploit those opportunities.
And since there is no shortage of energetic and entrepreneurial people
wherever human beings are to be found, one of the most important factors
explaining differences in economic performance will be public policy”
“The key is simply to put sensible policies in place, and then let the
intelligence, industriousness, and ingenuity of the people do the rest.”
Fred McMahon