Programme Director,
CEO of MIC, Mr Paul Nkuna,
CEO of Peermont Global, Mr Anthony Puttergill,
CEO of Sabvest, Mr Chris Seabrooke,
BPSA Chairperson, Mr Rams Ramashia,
Primedia CEO, Mr William Kirsh,
Executive Chairperson of TEBA Ltd, Mr James Motlatsi,
Distinguished guests, friends,
Ladies and gentlemen

It is always an honour to participate in events of National Union of Mineworkers (NUM) and its off-springs, in this case MIC and MIT.

My association with NUM when I was Minster of Minerals and Energy (DME) will always be a highlight in my public service. The leadership was forthright, robust and collaborative. I am forever grateful for both the ups and downs of that association.

Today I am not surprised that MIC has emerged as one of the broad based black economic empowerment (BBEE) entities of choice.

If I was ever to write a book on black economic empowerment BEE: what was envisaged, what the politics and laws were and what impact were envisaged there would definitely be a chapter on the MIC approach to BEE.

Right from the start we envisaged BEE as a mechanism to:

* Facilitate the entry of black women entrepreneurs into the mainstream economy and to diversify ownership in the formal economy. At the various levels of small, medium, large and even mega-large.
* Create new enterprises that are medium small and micro, especially production and manufacturing through work generated by affirmative procurement.
* Encourage entrepreneurship as against expectations of working for corporations or government.
* Facilitate linkages between the private sector and community development by investing in developmental and charitable work, thus relieving non-governmental organisations (NGOs) of some of the burden of fundraising.
* Encourage investment in Human Resources Development (HRD) by companies within their workforce and in the community abet with mines and beyond.
* Encourage employee ownership shares and public offer type schemes similar to what MTN has done.
* Phuthuma shares by Multichoice, the SASOL Nzalo scheme and Telkom shares - hence the creation of NEF in part to facilitate the distribution to ordinary citizens and small groups.
* Promote and facilitate employment equity.

All of these elements exist, but maybe not to the extent that I would certainly like. In the BEE Act and codes we have sought to institutionalize this dispensation.

We are however also mindful of the unintended outcomes. But we celebrate some of the positive impacts which have recently been pointed out by Moody's. And I quote:-

"BEE has had, and will continue to have, a profound impact on the South African economy. The volume of BEE transactions carried out over the past decade is substantial, with completed transactions to date representing in excess of 200-billion rand. In 2007 alone, one-hundred-and-fifty-three transactions were carried out for a total value of 96-billion rand."

Moody's goes on to say, and I quote:-

"BEE has been an important driver of corporate activity such as mergers and acquisitions (M&A) and private equity in South Africa, and this trend is expected to prevail for at least the next five to seven years."

This is a unique South African initiative that I hope we can embrace and use to contribute to crack the problem of our white and male dominated capital and ownership.

The size of the Black Women entrepreneur class in South Africa, despite all of this effort, is very small.

I am sometimes amazed at the hostility towards black economic ownership from both the left and the right order, with assumptions that blacks are not capable or worthy of being in big business.

Those who argue this are also not prominent in their support for small, medium and micro enterprises (SMMEs) and poverty alleviation. So they do not in anyway assist us with the problems of gross inequality, the fight against poverty and skills development. Ladies and Gentlemen, it cannot be one or the other!

* We need to broaden and diversify ownership at all levels.
* We need a much larger SMME base in South Africa.
* We need more women empowerment in all respects.
* We need even much more Education and Skills across the board. Government cannot do it alone. The problem is just too big. Conventional education does not go far enough. All of these are ultimate empowerment, for they impact on inequality, Jobs and Poverty. There still is not enough appreciation for these solutions to the challenges in South Africa.

I want to commend MIC for being one of the companies whose sole reason for existence is to respond to these challenges.

We need to find ways of promoting this business model in such a way where we do not confine share holder benefits to a few people. The whole concept of shared growth, which we seek, is about finding a mechanism that makes community investment sustainable, predictable and destiny changing.

I welcome therefore the fact that MIC takes an active interest in its investments. That it focuses on poverty alleviation and activities of its shareholders, enterprise development and activities of MDA, the support for HRD through the JB Marks Education Trust Fund and the Elijah Barayi Memorial training centre.

From an initial investment of only three million rand, MIC is today in 2008, able to give back Two-hundred million rand to its vast shareholder base. This is a good story ladies and gentlemen.

We need much more of these type stories in the economy if we are to lift the gloom we seem to have now.

I also want to congratulate MIC, especially on its BPSA investment and I hope it is bearing fruit. Also to thank MIC for the offer to collaborate with us in Joint Initiative on Priority Skills Acquisition (Jipsa), to facilitate placements to train and to find areas to place those we have trained.

We urge more of you to come on board to assist with the training of new graduates who need work experience and to absorb those who have been trained in South Africa and abroad into the workforce. We also appreciate collaborations with MIC on advancing maths and science teaching.

We need a National Consensus on the matter of Poverty Eradication. Reducing the levels of poverty within households is just not going far enough. There are too few players in this sphere. We need a paradigm shift where the poor are participants with responsibility to also work towards exiting poverty AND not sustained dependency on government, without any exit plans.

We need to engage and bring back the seven million able-bodied young men and women in their thirties and below, who are not given a soft landing and entry into the labour market.

The plight and tragedy of the wasted youth with more than ten years of schooling needs a solution by both government and business. This constituency needs a second chance desperately.

Government, through Public Works, cannot create these jobs alone. Only with the private sector can we do much more to create the opportunities to absorb these young victims in an 'entry barrier free' approach.

The Harvard Group proposed a wage subsidy for youth:-
And I quote

"South Africans excluded from the labour market are predominantly less skilled, Black, young and female.
If South Africa had 'normal' employment rates, these groups would be the main beneficiaries.
Increasing employment ratios productively would achieve shared growth."

On the issue of relaxing the skills constraint, the Harvard Group proposed - amongst others - the following:

"A targeted wage subsidy to accelerate school-to-work transition and encourage firms to experiment."

"Subsidise approximately a year's worth of employment - six months minimum wages over the course of 12 working months."
Is this the way to go?

We as government are calling on young people who are unemployable because of their level of education, to go back to school for a 'second chance'.
We also need to create more vocational educational type opportunities and National Youth Service type opportunities. Investing in our young is probably the only way to address extreme inequality.

We also have to deal with poverty in the most direct manner. We have to go to every household and to address the problem there, and to assist families to fight their poverty with us, and not to be passive recipients of State Support.

Following the Presidents announcements during the State of the Nation Address (SONA) on the antipoverty war room, we are launching a campaign on July 7, which will in every way determine the extent of poverty in those said households. We will, with the targeted families, engage in a contract of sorts to assist those households out of poverty once and for all.

The most important change that this effect can and must bring is that of:
* partnering with the poor
* introducing economic interventions and not just grants so that poor households have a plan to become self reliant and young dependents of grants exit. Ensuring that there is income that is earned by the army of able-bodied willing to work chronically poor young men and women
- ensuring households have a human capital development solution, be it ensuring they do not drop out of school permanently and go back to school for a second chance.

We hope the MIC approach is one of the answers to these vexing questions and we hope in this audience tonight we can have new partners who will commit to a sustained fight against inequality, unemployment and skills in an appropriate scale. If we fail to close ranks we can be assured the gloom we presently see will deepen. Only with your assistance will government be able to do even more to improve efficiency in service delivery.

Issued by: The Presidency
18 June 2008
Source: The Presidency