Address by Free State MEC of Finance, honourable Tate Makgoe, on economic opportunities for youth in 2010

Salutations

Programme Director, I am deeply humbled and honoured to have been invited to this occasion especially considering that this is month on which we commemorate the selflessness of the youths of 1976 who consciously chose to forgo their youth in exchange for the liberation of this country and the freedom that we so much enjoy today. Thirty one years down the line though, it is contrasting that the profile of young people includes amongst others:
* high unemployment rates
* low levels of education and skills
* high HIV and AIDS incidence.

As we celebrate the youth month and commemorate Youth Day, we need to reflect on the issues that affect our youth with the view of assessing progress made and challenges that we still face. This calls on all of us to make sure that the freedom that the youth selflessly fought and died for, translates to economic benefits and opportunities.

As former President Nelson Mandela said at the inception of the National Youth Commission (NYC) in 1994, "Youth are the valued possessions of the nation. Without them there can be no future. There needs are immense and urgent. They are at the heart of reconstruction and development."

Interestingly, the aspect of dealing with youth has now become an arena of contested debate, academically, socially and economically. This in my view should never be the case. We should rather be looking at and emphasising areas of convergence amongst these three arenas and therefore coming up with youth development programmes that can be sustained beyond 2010. The question of fiscal planning therefore becomes central in the context of economic literacy and transformation in our province.

Youth development programmes cannot be confined to geographical boundaries but should ideally be viewed in a global context, taking into consideration the interdependencies of youth development programmes and projects within our country. Therefore, contextualising this within the era of globalisation, the characteristics of youth are regarded as both an advantage and disadvantage.

The advantages being that in a fast changing world, young people are more able to make use of new developments especially with regards to technology and creative thinking, if given the necessary space and recognition. The disadvantage, generally quoted, is the extent to which they are vulnerable to the increasing homogenisation of global culture especially consumerism and the implications for developing a sense of identity and community.

However, we cannot run away from the reality that the youth are and represent the future. This assertion derives out of the context of discussions about the continuation of tradition, culture and values and general complaints by older generations about the loss of these by the younger generations. The challenge that we have therefore, instead of lambasting the youth in terms of the above issues, is the role that we should ideally be playing as their predecessors and foundation in respect of the above issues. It should therefore be acknowledged that interventions in one generation will bring benefits to successive generations.

Finally, in the context of the youth development movement issues of empowerment and integrated approaches seeing young people as holistic beings and not merely as problems have become yet another way of looking at youth. These varied approaches, with each contributing a different dimension to the picture of youth, are all relevant to the current debate on youth policy in South Africa and in the Free State specifically. In view of this, what remains critical is how do we as a province, make sure that all developments for 2010, economic and otherwise are not limited to the few who already benefit from related contracts but translate to effective youth development in the three arenas alluded to earlier.

It is imperative therefore that as a government, we should come up with public policies that deliberately promote and entrench youth development as a cornerstone of economic progression.

Key issues

The following issues are key to the development of such a policy:

* Firstly, from equity and a human rights perspective given that young people demographically constitutes significant sections of their populations, their issues should be on the public policy agenda.

* Secondly, youth is crucial to any national developmental agenda. Though there were concerns during the 1980s about the impact of the 'youth bulge' on a range of public policy issues such as employment, crime, social security and housing, increasingly as developed countries are confronting slowing population growth, the advantages of having a young population are gaining prominence. Should we be playing oblivious to these realities as a province?

* Thirdly, youth development measures are seen as crucial to poverty eradication. Unless elevated to the necessary status in public and development arena, we will be growing generation of dependants on social security grants.

Policy, in South Africa young people make up a significant proportion of the population of developing countries, as such they require a significant proportion of national anti-poverty investment on grounds of equity alone.

* Finally, 'young people without a stake in the system are more likely to become alienated and to engage in anti social behaviour'. A number of reports have highlighted the links between social exclusion (as a result of poverty, dropping out of school and unemployment) and anti social behaviour. This is especially true considering that this highlights lack of opportunities for young people and there is therefore a feeling and reality of exclusion as contributing towards youth marginalisation.

These issues can never be better emphasised than to reiterate what President Mandela said when he said, "Youth are the valued possessions of the nation. Without them there can be no future. There needs are immense and urgent. They are at the heart of reconstruction and development."

The situation of young people in 2007

In order to therefore accelerate issues mentioned above, the following guiding documentation becomes paramount for the development of an effective, implementable Public Policy on Youth Development:
a) the first National Youth Policy (1997)
b) the Reconstruction and Development Programme
c) Accelerated and Shared Growth Initiative for South Africa (AsgiSA) and Joint Initiative on Priority Skills Acquisition (JIPSA) as cornerstones or economic development
d) the Growth, Employment and Redistribution (GEAR) Policy as a cornerstone of economic normalisation
e) the 2003 Status of Youth Report
f) the policies of redress and affirmative action
g) the adoption of a National Youth Policy and an institutional framework for youth development in the form of the national youth machinery.

In his speech to National Assembly on the State of the Nation address (SONA), on 9 February 2007, President Mbeki further articulated these challenges when he said, "None of the great social problems we have to solve is capable of resolution outside the context of creating jobs and the alleviation and eradication of poverty, therefore the struggle to eradicate poverty has been and will continue to be a central part of the national effort to build the new South Africa."

This is true for youth development challenges that we face as a government.

Free State specific issues

Turning back to the Free State and 2010 World Cup, the economic growth in this province is linked to and will significantly derive out of development and empowerment of young people. It is estimated that the 2010 World Cup will inject more than R50 billion into the South African economy. We have taken a decision as government to ensure that young people are properly empowered with skills so that they are able to benefit from the economic spin offs generated by the tournament.

There was a great deal of discussion on the issue of stimulating economic growth in various district municipalities. Small, medium and micro enterprises (SMMEs) and co-operatives are set to benefit from the upgrading of stadiums and construction of multi-purpose sports facilities.

We have always reiterated as provincial government our commitment to supporting youth-owned SMMEs and co-operatives. I challenge you today to consider what role you can play to make sure that at least 500 000 job opportunities are created during 2010 Soccer World Cup.

This is necessary if we have to address youth development in the areas of information technology (IT) and information communication and technology (ICT), tourism, entrepreneurship and many other related industries!

In order to effective address these challenges the following issues have to gain prominence in all strategies and policies that we aim to develop:

Youth profile of the Free State (1996 and 2001) reflected the following about the situation of the youth in the Free State:

* The Free State has a significantly larger percentage of African youths in comparison with the national percentages. In the Free State the African youths made up 86,7% of the youth population in 1996 and 90% in 2001. For South Africa the respective figures were 78,8% in 1996 and 79% in 2001.

* Added to the above trends and conclusion it should also be noted that the proportion of the Free State African youths has increased between 1996 and 2001 (from 86,7% to 90,5%). This increase is also higher than the proportional increase in the African youth population for South Africa and confirms the earlier conclusion on the extreme and growing youth problem in the Free State.

There is also a considerable decline in the population figures for the Free State White youth population, from 109 075 in 1996 to 78 356 in 2001. The above lower youth population growth rates in the Free State compared with the national figures between 1996 and 2001, as well as the considerable decline in the White youth population are perhaps an indication of:

* the Free State youth not finding economic opportunities in the Free State and leaving the Free State in search of such opportunities (it seems especially true for the white youths but also for black youths).

Another study conducted by the Free State Youth Commission, "A profile of perceptions and behaviour of youth in the Free State (1994)" reflected the following overall findings:

Although the majority of the unemployed youth are still hopeful that they will find a job, a close up view shows that for a large proportion their chances of finding employment are seriously strained by a lack of basic employment skills and poor qualifications. This is of particular concern amongst black youths older than 20 years, where almost one out of every two did not complete their secondary school training. To a certain extent this group is doomed to continued unemployment or unskilled (low income), employment scenarios that are not contributing to endeavours to increase the quality of life and enhance sustainable human development. Clearly this is an area that calls for intervention, starting with the cultivation of a culture of education.

Our policies need therefore to make sure that we create a youth generation that focuses on job creation through various initiatives and assistance provided by various State owned entities rather than a "youth that depends on employment elsewhere to prosper".

One of the key issues that we need to address is therefore how do we make sure that of the balance of the r538 million that has been allocated to the Free State for the 2010 Soccer World Cup, how much of it is deliberately channelled towards youth enterprises?

We need not shy away from making such determination, for failure to do so will continue to condemn our youth to the periphery of economic activity and benefit.

WE also need to make sure that of all the other nationally available funds, especially in ICT development and tourism industry, we can deliberately encourage our youth to participate and also support them to sustain their participation beyond 2010.

A key factor, therefore, is to make sure that we can make the Free State one of the tourism destinations of choice for the visitors, we have the perfect whether for this!

A fact that will not change is that some soccer world cup matches will take place in the province attracting an estimated more than 50 000 soccer fans from all over the world. There are endless opportunities for young people in the following areas:

* Food and beverages: major KwaZulu-Natal based food and beverages producers have agricultural resources to draw within the province and have been able to access the international markets. During 2006 Soccer World Cup in Germany, 10 600 litres of beer were sold in the 12 stadiums. 5 500 000 drinks in returnable cups were also sold.

As we deal with issues of economic transformation, we should therefore start thinking of how we can deliberately promote partnerships between established enterprises and our youth development endeavours without compromising business autonomy.

* Tourism: tourism is a R3,3 billion plus industry in KwaZulu-Natal.

We should therefore take advantage of the fact that all government departments are providing wide ranging programmes aimed at ensuring an effective participation of young people in the economy of before and even after the world cup.

These could involve:

* partnerships with various stakeholders such as Umsobomvu Youth Fund (UYF), national and provincial youth commissions;
* creating and attracting possible market and business opportunities for young entrepreneurs;
* exposing youth entrepreneurs to economic opportunities through various SMMEs fair, conferences and exhibitions;
* the staging of district information sessions as part of the National Youth Entrepreneurship Campaign 2010.

In staging such events we've always ensured that government officials involved in supply chain management are available to share information with young entrepreneurs on how to access businesses in government.

All provincial departments have also established supply chain management units and are now better placed to actively promote the provincial government's economic development policies.

Provincial government has a direct influence over 63 percent or R7,5 billion procurement budget. We have ensured that our procurement prescripts and strategies are designed in such a way that we are able to spend more aggressively to drive youth empowerment programmes and Black Economic Empowerment (BEE).

We will only be able to say that efforts of inculcating the culture of entrepreneurship are bearing fruits if more and more emerging entrepreneurs exhibit their products and services during events such as Tourism Indaba, International Trade and Investment Conference and Exhibitions. These events have attracted the attention of international and national delegates and are excellent marketing platforms for young entrepreneurs.

Skills revolution

Our effective participation in the global economy as the province is dependent on how the four following things interact, information technology, knowledge production, human resources and institutions.

Because it is increasingly becoming clear that knowledge production has become central to globalisation and to economic development, on 22 May 2007, role players from the private sector, national, provincial and local governments gathered in Durban for the Skills Revolution Indaba. This formed part of our continuous assessment of our institutions and the education system.

As government we are of the view that it is incumbent upon us to put in place an education plan that is pro-globalisation. Globalisation is redefining the skills and knowledge that students and workers need. Companies are following talent whether that talent is here in South Africa or any other country.

The Draft National Plan for Higher Education released by the Department of Education in 2001 revealed a shortage of high-level professional and managerial skilled personnel in the country. The plan predicted the growth rate for professional and managerial occupations of 9,5% and 6,2% between 1998 and 2003. The growth rate for artisan occupation was expected to be 3,9% and unskilled and semi skilled work was expected to decline by 3,4%.

The big question is, 'have we produced enough graduates in economic based field, science and engineering to compete in the global market place?' The demand for skilled young people especially in above fields is expected to grow sharply as we approach 2010.

The average age of an artisan today in South Africa is about 54, compared to about 26 in the 1980s. Projects linked to the Soccer World Cup more especially infrastructure development present many opportunities for young people. Already the Engineering Council of South Africa has indicated that the country needs to produce 2 500 engineers annually in order to meet the demand.

Subsequently, skills development has a key role to play in the economic empowerment of our youth. Failure in the skills development front of economic empowerment will constrain progress on all the other fronts and render gains made on them untenable and unsustainable in the longer term.

From the point of view of entrepreneurship and small business development, the skills shortage in the trades and artisanal spheres might pose an even bigger problem than skills shortage in the high skill professional sector. We now have about half the number of artisans we had in the late 1980s, although the economy is much bigger now than it then was.

Conclusion

In the area of sector strategies we reported on progress in the three sectors identified initially by AsgiSA as sectors that deserved high priority attention.

These sectors were:

* business process outsourcing
* tourism
* biofuels.

Stakeholders agreed that these sectors all had high growth and job creation potential and that government could improve their prospects by removing unnecessary obstacles or adding carefully targeted support mechanisms. It was not the first time the government tried sector support programmes, but previously they had proliferated and been driven by their own departments. AsgiSA would attempt to ensure that department's co-ordinate effectively.

Our youth development policies should therefore not seek to create millionaires without the necessary business acumen, professionals without ethical grounding and a future generation without a future.

We should seek to create a balance between individual growth, societal stability and developmental progress, it is only in taking a bold step to integrate these there issues as well as the three arenas mentioned earlier that we will create a future generation that will sustain the future of the province and South Africa.

I thank you!

Issued by: Department of Finance, Free State Provincial Government
15 June 2007