Issued by: Office of the Premier Gauteng Province
Westerstede, Germany 2 December 1999
Ambassador Bengu
MEC Moleketi
Consular General Molekane
Distinguished guests
Ladies and Gentlemen
In 1994, South Africans from all walks of life went to the polls to elect the first ever-democratic government. That election, which brought to a close our sad history of apartheid, was a culmination of many years of struggle by people and nations across the globe for political and economic freedom.
We have however always understood that important as the vote is, it is but just a necessary condition for a start of a long journey for economic development. I am happy to say without any fear of contradiction that over the past five years, a solid foundation for social transformation was laid.
It was with this in mind that President Mbeki concluded his victory speech by saying, which 'now is the time to go back to work'.
Since these famous words, South Africans across the spectrum have put a lot of efforts in ensuring that indeed we become a nation at work for a better life for all our people.
Last week, a cover story of one of South Africa's leading financial magazines, the Financial Mail, summed the economic mood of the country under President Mbeki as we continue with the challenging process of transforming our country with the following headline: "We've never had it so good".
This headline becomes the more important if one considers the fact that in May this year the same financial magazine had public endorsed the UDM in the June elections. We can therefore confidently conclude that this was therefore not just a remark on the booming economy and the signs of prudence in the area of economic policy. It was a confirmation of the confidence that marks the general political discourse in our country.
Another vote of confidence was expressed by Global Investment bank, which recently said "Nothing compares to South Africa, which continued its remarkable run up of over 20% in the year to date in local terms and 16% in US dollars".
Most of you who are here know that over the past five years, we have maintained a fiscal balance that has yielded the results of declining inflation and interest rates. With all the challenges that confront our country, we can state with confidence that we are on course. As investor confidence rises, it remains our task to ensure that such current favour of fortune and policy discipline give sustainable returns to our citizens.
One of the greatest signs of a country's economic prosperity is its political stability. Our country has succeeded through a tough period of the first years of democratic rule to ensure that we maintain the momentum to rebuild our country. South Africa has today gained international recognition and swiftly moved to occupy a significant space in the global economy as a giant emerging market. Indeed we have reached this stage in our democracy because, within the first five years of governance, the people have begun to notice significant changes in their lives.
President Mbeki has defined the current term of office as one of accelerated change. He was able to proclaim as such because of the solid foundation laid in the past five years under the stewardship of President Mandela. Thus all of us have been called upon, as an entire nation, to become 'a nation at work for a better life for all'. It is my belief that this call has been widely embraced by all sectors of our society.
Together with the private sector, labour and communities, a lot of work is being done to reduce the levels of crime and thus make South Africa safer and secure for all who work and live in it. A new crime fighting unit called the 'Scorpions', has been formed as part of our commitment to deal a serious blow against criminals. Already major inroads are being made to take forward our crime prevention strategy forward. A new chief commissioner will take over from George Fivaz in January 2000.
As we enter the 21st century, we are faced with the challenge of building an economy, which is equal to both the demands of globalisation and the imperative of alleviating the poverty of millions of our compatriots who continue to suffer under the yoke of poor socio-economic conditions.
We are convinced that the growth of our national economy is crucial for the accomplishment of our vision of building a better South Africa for all. We are also well aware of the fact that we cannot achieve our economic goals alone. Both national and international partners need to come on board to assist in this noble project of building a better South Africa. I have no doubt that the German business community can rise to the challenge. It is for this reason that we see this investment conference as another opportunity to deepen the already sound relationship between our country and German firms. Because relationship promises rich dividends for both our countries and their people, we are committed to the enhancement of bilateral economic and industrial relations.
The economic policies of our government are premised on the belief that a solid and sound macro-economic foundation is essential for sustainable development. We understand fully the need to create conditions for economic growth through prudent macro-economic policy as the prerequisite for satisfying the needs of our people. To this end, we remain committed to the creation of an open economy because international experience has shown that countries with open economies tend to be more prosperous. That is why we have signed a trade pact with the European Union and we are about to sign a SADC trade protocol to take forward the goal of creating a single regional market in Southern Africa.
While there is co-ordination of monetary policy between the Finance Minister and the Governor of the reserve bank, it is the independent Reserve Bank, which determines the direction of monetary policy on the basis of underlying market conditions. Our financial markets are well regulated and meet the highest standards set by international best practices. The previously high levels of government expenditure have been stabilised as a result of which the fiscal deficit has fallen to 2,3% of GDP from 10,3% six years ago.
It is therefore not surprising that the health of the national economy is improving if the third quarter growth figures, which show an accelerating economy, are anything to go by. The GDP rose to a seasonally adjusted and annualised real rate of 3,1%.
This represents the fourth successive rise and the highest quarterly rise in growth figures since 1996. Since this is higher than the forecast 2,6% increase, some economists believe that South Africa has passed the turning point in the economic cycle and is heading towards a full recovery. This means that our economy has grown at a seasonally adjusted and annualised rate of 0,8% compared with the same period last year.
Coming back to the Gauteng Province, it is a known fact that the province plays a significant role in the development of the national economy despite the fact that our province covers only 17 000sq km or 1,4% of the total land surface of South Africa.
Gauteng contributes 37% of GDP and 60% of fiscal revenue. In order to enhance the performance of our provincial economy, the provincial government adopted an economic plan, which is premised on three strategic pillars for a new growth trajectory. These are: The development of Gauteng as South Africa's smart centre. This entails the development of smart industries such as information technology, telecommunications, electronics and bio-medical engineering. We are well located to play this role because we have the highest labour force skills profile in the country. We have the largest and most prestigious research institutes, foundations and universities. In short, our province is a first world business centre with the requisite infrastructure. At the beginning of next year a concrete programme to nature and encourage innovation will be unveiled. We hope that business across the world will join us.
The development of high value-added manufacturing and mineral beneficiation. Our province is projected to remain a centre of intermediate, final and consumer goods production for manufacturers looking at focusing on the domestic and sub-Saharan markets.
Developing the province's service sector. Our vision in this area includes business and leisure tourism, financial services and auxiliary business services and corporate headquarters. Our tourism efforts received an added boost yesterday with the decision of UNESCO to accept an area around Sterkfontein and Kromdraai as a world heritage site. This area known as the cradle of humankind has one of the oldest human fossils ever found in the world. In order to cement these pillars the provincial government has put in place measures that are aimed at the further stimulation of the provincial economy and the creation of a favourable climate for international investors.
We established the Gauteng Economic Development Agency to promote investment in our province. Another agency, which is playing a critical marketing role for our province, is the Gauteng Tourism Agency, which was established with the aim of attracting both national and international tourists to our province of gold.
I call on you to be part of the evolution of our economic miracle in a partnership with our people and government.
I thank you.
Issued by Thabo Masebe
Spokesperson for the Premier
Gauteng Provincial Government