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Date : 20/06/2006
Source: Gauteng Provincial Government
Title: Shilowa: Gauteng Business Barometer


  Address by Premier Mbhazima Shilowa at the launch of the Gauteng Business Barometer

Gauteng Business Editor, Ryk van Niekerk,
Representatives of Standard Bank,
Lincoln Mali, Gauteng Provincial Director,
Chief Economist, Goolam Ballim and Roy Ross Director of Distribution and Wealth,
Tariq Issel from Media 24,
Economist Mike Schussler,
MEC for Finance and Economic Affairs, Paul Mashatile,
Gauteng heads of departments and agencies,
Representatives of Busa, Chamsa and Nafcoc,
Gauteng academics and members of the media,
Distinguished guests,
Ladies and gentlemen;

One of Gauteng's important strengths as the country's economic engine room lies in its ability to innovate and to apply knowledge to create new products and services. The Gauteng Business Barometer which we are launching today is one such home grown innovation. It represents another first for our province as the country's first provincial business barometer, which reflects a wide range of economic factors. It will give us an important insight into the workings of the Gauteng economy and will be of value to both the private and public sector.

The sustained high levels of economic growth we are seeing in Gauteng today can in large measure be linked to the policies and strategies that we have implemented as government. At a political level we have been able to build confidence through building a strong, stable and competent government which has upheld the principles of good governance, accountability and transparency. We have been able to demonstrate our ability to address their socio economic needs and to make Gauteng an even better place for all. Our track record of consistent delivery and steady progress in fulfilling our commitments is unquestionable.

Our sound and often bold economic and social policies have increasingly attracted the attention of local and international investors, multi national companies seeking an entry into Africa, professionals and other skilled people, unemployed people, innovators, entrepreneurs, tourists and others who wish to be part of Gauteng's economic success story and take advantage of the growing economic opportunities that it has to offer. These too have contributed immensely to heightened economic activity in our province.

We have sought to maintain an appropriate balance between addressing the social needs of our people and attempting to alleviate the suffering caused by poverty and deprivation and investing in our future by putting in place measures to stimulate economic growth, job creation and meaningful economic opportunities for all.

We have avoided a "welfarist approach" which provides for social needs but neglects to build the productive capacity of the economy and is therefore unsustainable in the longer term. We have also steered clear of the "trickle down approach" in which a minimalist state adopts a hands off approach in the belief that market driven economic growth on its own will automatically improve the conditions of the country's people.

We have instead positioned ourselves as a developmental state in which the state actively intervenes to address past imbalances and the unequal distribution of income and wealth and drive socio economic development.

The foundations of the economic growth which we are seeing today were laid in the late 1990s. It was then that we began to develop a strategy to stimulate private investment in the tertiary sector of the economy and create jobs particularly in areas such as business tourism, logistics infrastructure, manufacturing and Information Communication Technology (ICT), with a particular focus on increasing the knowledge intensity of the economy.

Through Blue Intelligence Quotient (IQ), we invested over R2,8 billion in strategic economic infrastructure projects in Gauteng between 2001 and 2005. These are by now well known and include a range of what are today successful projects in business tourism, logistics infrastructure, manufacturing and ICT.

Our interventions have helped grow the tertiary sector and responded to the Gauteng economy's inevitable shift away from its historical reliance on the extraction and export of primary products such as minerals and mining commodities. According to Statistics South Africa (Stats SA) in the period 1996 to 2004 primary industries as a percentage of gross domestic product dropped from 4,6 percent to 2,3 percent. Tertiary industries on the other hand increased from 58,4 percent to 62,3 percent in the same period. Much of this was attributable to growth in finance, real estate and business services which increased from 16,1 percent to 21,4 percent.

Despite our successes we are constantly aware of the challenges we continue to face in our province in addressing unemployment, poverty and underdevelopment. Given that Gauteng is responsible for over a third of the country's Gross Development Product (GDP), we have a considerable responsibility in helping to ensure that we contribute to the achievement of the country's objectives of halving poverty and unemployment by 2014. Following our re-election in 2004 we therefore developed a Growth and Development Strategy (GDS) which would enable us to achieve an eight percent growth rate by 2014 and ensure that the benefits of this growth were shared among a broader section of the population.

The Gauteng Growth and Development Strategy (GGDS) which is in line with the national Accelerated and Shared Initiative for South Africa (AsgiSA) initiative, was adopted in April 2005 after extensive research and consultation with a range of stakeholders in Gauteng including business and labour. Among its aims are:

* provision of social and economic infrastructure and services to build sustainable communities and contribute to halving poverty;
* accelerated labour absorbing economic growth that increases annually and that will create long term sustainable jobs and contribute to halving unemployment;
* sustainable socio economic development; * enhanced government efficiency and co-operative governance;
* deepening participatory democracy, provincial and national unity and citizenship.

Among the key mechanisms identified to give effect to the strategy were investment and support in targeted economic growth sectors including:

* smart industries including ICT and pharmaceuticals;
* trade and services including finance and film; * tourism;
* agriculture including agro-processing and bio-technology;
* manufacturing including steel related industries, automotive parts and components, beer and malt;
* infrastructure expansion and investment.

In addition the strategy identified support for small, medium and micro enterprises (SMMEs), broad-based black economic empowerment (BBBEE) and skills development as central to the achievement of our objectives.

Since the launch of our strategy we have made important progress in implementing the strategy including:

* the launch of the Gauteng Agricultural Development Strategy (GADS);
* the launch of a BBBEE strategy which will see at least 70 percent of GPG contracts being awarded to BBBEE companies by 2009;
* the launch of the Gauteng Enterprise Propeller (GEP) to provide financial and non-financial support for SMMEs;
* the development of a Gauteng Human Resource Development strategy to ensure that we have the necessary skills to drive economic growth and social development;
* the adoption of a strategy to stimulate the creative industries sector and the development of a strategy to make Gauteng a home of competitive sport to take advantage of these sectors' massive growth potential.

In addition, provincial and local government in Gauteng have agreed on a strategy to build Gauteng as a globally competitive city region. This makes it imperative for the three spheres of government and other stakeholders to work together in a manner that is mutually beneficial that improves the efficiency and performance of the Gauteng economy and enables the region to compete more effectively in the international arena. It requires a common approach to dealing with urgent and complex choices needed to build an economically efficient and social equitable city region.

Global city regions are becoming increasingly important in the national and global space economy. We need to move beyond administrative and jurisdictional demarcations to better understand the functional economic geography of the city region, including how the different components relate to each other their comparative and competitive advantages and how people capital flows and business linkages shape the regional economy.

Our projections are that by 2015 Gauteng will have a population of around 14,6 million making it among the largest metropolitan settlements in the world. To prevent a situation where population pressure overwhelms our development we are developing perspectives and strategies which aim to ensure that we are ahead of these challenges. The global city region perspective is one such perspective that aims to improve economic efficiency and integrated planning so that we are able to continue to boost economic growth and economic opportunities in a manner that is able to address social needs.

Among the priority areas for improved co-ordination, efficiency and planning include:

* safety and security;
* transport infrastructure and authorities;
* integrated safety and transport system;
* sustainable human settlements;
* regional branding, investment and tourism promotion;
* infrastructure provision and;
* the environment and sustainability.

We are therefore confident that even if there are signs of a slowing down in our growth rates the overall upward trend in the growth of the Gauteng economy is here to stay. It is up to all of us, the private and public sector to make this a reality.

I thank you!

Issued by: Office of the Premier, Gauteng Provincial Government
20 June 2006

   

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