Source: The Presidency
Title: SA: Zuma: Address by the President of South Africa, at the World Economic Forum, Davos
Compatriots from the business community,
We extend a warm welcome to Davos to the South African business delegation!
Our partnership at the World Economic Forum each year gives South African business and government an opportunity to showcase our beautiful country to the world.
We are able to share our achievements and also encourage partnerships with international business, as part of the objective of growing our economy to fight unemployment and poverty.
As we engage the international community here, we need to be on the same footing with regards to what we must achieve for our country.
As you are aware, since 1994 we have made substantial progress in transforming the South African economy to benefit the majority, but serious challenges of unemployment, poverty and inequality still remain in our country.
Inequalities arise from the unequal distribution of wealth and education shaped under apartheid as well as from high unemployment and an unusually skewed wage scale by international standards.
We also inherited from apartheid some of the highest levels of joblessness in the world.
The share of the working-age population with a job fell steadily from the late 1970s to 1994, from around three in five to a mere two in five people having jobs.
Since 1994, our economy has created around three million jobs, but this is inadequate given the numbers of the unemployed.
This has necessitated the development of a New Growth Path that would help us boost economic growth and job creation in order to reduce and ultimately eradicate unemployment and poverty.
The central strategies in the New Growth Path, which was launched in 2010 are the following:
Firstly, we aim to make the economy as a whole more efficient and productive, through substantial investments in infrastructure, education and skills development.
Secondly, we are encouraging economic activities that can create more opportunities for our people on a mass scale in six areas.
These are infrastructure development, agriculture, mining and beneficiation, manufacturing, the green economy and tourism.
We are doing intensive work in all these areas.
For example, on infrastructure development, we are investing more than R800 billion over the next few years in water, roads, electricity, rail and other key infrastructure to improve the competitiveness of our economy and improve the quality of life.
The newly established Presidential Infrastructure Coordination Commission is developing a pipeline of projects to implement the infrastructure goals.
Thirdly, we promote partnerships between business, labour, government and the community sectors as central to creating and promoting sustained and inclusive growth.
The New Growth Path has already had a substantial impact on government policy making and on the economy in just a year.
To start with, employment creation has become a central criterion for all of government’s economic programmes and projects.
All government entities, including State Owned Enterprises, are now taking the impact of their work on employment and equity more explicitly and systematically into account.
In addition, government’s partnership with business and labour has been enhanced since the launch of the New Growth Path.
This is very critical because the State is not the primary job creator. The state prepares the environment for economic growth and provides support to the private sector by providing enablers and removing obstacles.
To date we have put in place a number of incentives and enablers to boost employment creating economic activities.
One example is local procurement. From December 2011, new regulations were put in place, requiring local procurement by all state entities when buying specified products, including clothing, rolling stock and canned foods.
This will make a noticeable impact as procurement of goods and services by national and provincial departments alone constitutes almost 6% of the GDP.
We are aware of complaints from business about the delays with regards to issuing water licences and environmental impact assessments. These obstacles are being addressed systematically and have been significantly reduced.
There are many other measures that we are already implementing and others in the process of planning.
To alleviate poverty in the short-term, government supports employment creation through public works programmes which have proven to be effective in providing short term jobs.
As another key poverty alleviation measure, we also have an effective social security system. To date, government supports close to 15 million South Africans, of which more than 10 million are children receiving the child support grant, care dependency grant or the foster care grant. Many households would have no food were it not for the social grants.
Our social assistance programme creates a caring society. We are improving the economic situation and working towards finding means to provide able - bodied grant recipients with skills to help them become independent.
Looking ahead in our economic transformation programme, we continue to work towards achieving a thriving mixed economy, premised on creating inclusive employment-creating growth.
This is an economy where the state, private capital, cooperative and other forms of social ownership work together, complementing each other to foster shared economic growth and eliminate poverty.
We are also working to build an economy that is increasingly integrated into the Southern African region and our continent as a whole, in furtherance of the goals of development and regeneration of Africa.
We believe we are moving towards achieving that integration goal. In June last year, 26 African countries signed an agreement to create a free trade area that covers more than half of Africa.
By June 2014, nearly 60 percent of the economy of Africa will be a single free trade area, covering the Southern African Development Community, the East African community and the Common Market for Eastern and Southern Africa.
This will enable an easier and efficient flow of goods, people and investments.
Having successfully hosted the United Nations COP 17 climate change conference in December, we are also working to achieve a sustainable economy which is not harmful to the environment or the health of our people.
That is why we are developing a green economy, and have signed an Accord with business and labour in this regard.
With regards to youth support, government has directed that the number of public-sector internships be increased to 60 000 positions, by 2013. This will expand the number of public internships more than tenfold.
Ladies and gentlemen,
The theme of this year’s World Economic Forum annual meeting,– the Great Transformation: Shaping New Models – provides an opportunity for us to become innovative in improving solutions to the challenges of poverty, inequality and unemployment that I have just outlined.
As we seek international partnerships, we will bear in mind the re-balancing of the world economy which has seen the increased importance of Asia and Latin America in sustained overall economic growth.
We are also working to engage more with the BRICS countries, while ensuring that we all benefit fairly, while not neglecting the developed North which remains a key development partner.
Colleagues and friends,
We are proud of our progress so far in shaping a new model of economic governance and growth – one that is dynamic, sustainable and increasingly inclusive. That is not to play down the very real challenges that we face.
We cannot sustain our economy unless we all do more to address the social ills and economic exclusion entrenched by colonial oppression and apartheid.
We must also develop strategies for managing the instability of the global economy.
We look forward to continued work with you to achieve our goal of a more equitable, inclusive economy that is characterised by high levels of growth, dynamism and collaboration amongst key participants.
We look forward to a successful WEF 2012 session.
I thank you.