South African President Thabo Mbeki has outlined three pillars for remedying poverty and underdevelopment in South Africa.

Speaking on Friday in his state of the nation address to the first session of South Africa’s third democratic Parliament, Mbeki said the pillars were: encouraging the growth and development of the ‘first economy’ and increasing its possibility to create jobs; implementing a programme to answer the challenges of the ‘second economy’; and building a social security net to meet the objective of poverty alleviation.

With regard to the first economy, Mbeki’s term for South Africa’s developed formal economy, a detailed programme of action was outlined.

“We will work to raise the rate of investment in the first economy,” Mbeki said.

He committed government to reducing the cost of doing business in South Africa and made particular reference to improvements to South Africa’s ailing logistics systems.

He also said that moves were afoot to improve South Africa’s energy and telecommunications capacity.

Mbeki made a further commitment to a process of ensuring that administered prices, which relate to utility costs, do not add to inflationary pressures.

“Our policies in this regard will be announced by October this year,” he said.

The President also renewed his commitment to boosting small business enterprises, manufacturing support and skills development.

Concerning the second economy, which relates to the informal, undeveloped sectors, Mbeki outlined the following: an expanded public works programme, initiated earlier this week; the finalisation of a financing protocol for urban renewal and urban development; the implementation, by year-end, of an Apex Fund for the extension of micro-credit; agricultural support schemes; support mechanisms for cooperative enterprises; the expansion of the adult basic education and training programme; the dedication of skilled resources to 21 urban and rural modes; and the development of information and communication technology systems that support development.

Mbeki also reiterated his stance on the need to accelerate black economic empowerment.

He said there were moves to align government’s economic growth programme with the building of a social security net, in the hope that, over time, a smaller proportion of society would rely on such grants for their survival.

The President also committed Government to building on its experience of the last ten years with regard to the housing programme, saying that a comprehensive human settlement and social infrastructure plant, which would include rental-housing stock, would be presented to Cabinet within three months.

“In the next three years we will spend R14,2-billion to help our people to have access to basic shelter. From this financial year we will also address the trend in some provinces where there has been a slow-down in housing delivery as well as addressing the broader question of spatial settlement patterns and implications of this in our efforts to build a nonracial society,” Mbeki concluded.