Chairperson and Hon. Committee members of the Trade & Industry Portfolio Committee
Lungi Matshikiza: Committee Secretary
Portfolio committee on Trade & Industry
Parliament of South Africa
Cape Town
19th ApriI2OO2
COMMENTS ON THE DTI DOCUMENT "ACCELERATING GROWTH AND DEVELOPMENT: THE CONTRIBUTION OF AN INTEGRATED MANUFACTURING STRATEGY" ISSUED ON THURSDAY 18 APRIL 2002
Dear Hon. Members,
The British Chamber of Business has been operating in South Africa for more than 37 years. Its aim is to promote two-way trade and investment between South Africa and Britain. Its membership comprises South African and British companies operating in South Africa that are involved in UK/SA trade and investment activities. The companies are of all sizes and from a very wide range of commercial, financial, manufacturing and service sectors.
The Chamber surveys its members on a regular basis to obtain their views on the South African business-operating environment. This is in order to fulfil its aim of promoting investment into South Africa, and identifying obstacles to it.
Although the Chamber cannot represent any specific sector of commercial activity, it has identified in these surveys some initial concerns that the Chamber feels would be relevant to the current debate on Industrial Policy. They are probably too general at this stage but we believe still worth conveying.
The Chamber compliments the Department of Trade and Industry on the issue of the document "Accelerating Growth and Development: The Contribution of an integrated manufacturing strategy" distributed on Thursday 18 April 2002. It will be studying this document in full over the coming weeks but has the following very broad and general observations to make in order to contribute to your own meetings on the subject:
1. POSITIVE SIGNALS TO BUSINESS. It is very gratifying to note that the process of inclusive consultation which has clearly influenced the original discussion document, "Driving competitiveness: an integrated industrial strategy for sustainable employment and growth" will continue. This goes a long way to addressing a strong sense of ill ease that has come out of past results of surveys of our members, that "government does not understand, and is not listening to business". This is clearly not the case and we confirm that this is an important positive signal to business and look forward to participating whenever appropriate in the ongoing process of consultation.
2. FOCUS ON MANUFACTURE. Another specific concern arising out of surveys of our members has been the often stated remark that government is "neglecting manufacturing ". This proposed industrial strategy gives very positive signals about government's intent for the manufacturing sector. The means by which this intent is translated in practice needs however still to be subject to much debate, we believe, and it is hoped that DTI will continue with the consultative process in this regard.
3. INCENTIVES, REBATES AND BALANCING EFFECTS. A related and consistent concern of our members has been the "lack of incentives" for business. As was displayed by the Department of Home Affairs in devising new Migration Policies, we believe that there needs to be the sort of courageous and imaginative approach to experiments with alternative labour and tax incentive dispensations in such spheres as Industrial Development Zones. This should include rebates against the increasing number of taxes and levies being imposed on business. In general, there should be a process instituted which identifies the trade-offs necessary in the balancing process between the political requirements in addressing community, equity, and BEE needs and the economic requirements and objectives of business.
4. GLOBAL ASPECTS. The "promise" contained in the policy document of a greater sensitivity being maintained on the subject of international trade agreements and their impact on business in South Africa is gratifying. This will address another concern that has been regularly expressed by members and this sphere, particularly; a move away from political to economic imperatives would be welcomed.
5. COMMON NATIONAL OBJECTIVES. We agree with the understanding that one of the primary underlying purposes of an industrial strategy is to make markets work better and we also note that the policy document acknowledges that this is a multi departmental responsibility. We strongly endorse this point. It is a main feature emerging from surveys of our members that the lack of departmental co-ordination towards the objectives contained in this document have until now been impacting particularly negatively on the performance of member companies' businesses. Issues involving other state disciplines which may lie largely outside the scope of industrial policy but which can influence its success or failure have not in the past been factored in through, inter alia, lack of departmental co-ordination. These concerns include crime and corruption, accountability of labour unions, labour legislation productivity of the workforce, public service delivery, the availability of local and foreign skills, and the impact on the economy of ill considered political statements. Markets will work better if all of these factors are addressed and a multi-departmental responsibility for its success is assumed.
We look forward to participating in the ongoing debate and congratulate the Department of Trade and Industry on its excellent efforts. We thank the Chair and Honourable Members for the opportunity of circulating our views.