Mr Speaker

In 2005 the South African GDP grew to 5% from an average of 3.4% in the period between 1999 and 2004. In the same period household consumption increased from 3.7% to 6.9%, fixed investment grew from 3.5% to 8%, gross domestic expenditure grew from 3.8% to 5.9% and exports grew from 2.4% to 6.7%.

The Western Cape economy also continued to grow strongly during this period with the GDPR growing from 4.3% in the period between 1999 and 2004 to 5% in 2005.

According to our Provincial Economic Review and Outlook (PERO) 2006, the Western Cape economic performance is expected to keep up with that of national performance over the short term and may continue to outperform the national economy on average.

Clearly this confirms the assertion made by our President in his State of the Nation address earlier this year "that our people are firmly convinced that our country has entered its Age of Hope. They are convinced that we have created the conditions to achieve more rapid progress towards the realisation of their dreams. They are certain that we are indeed a winning nation."

It also confirms the assertion made by our Premier in his State of the Province address that the Province is indeed on the "threshold of prosperity".

The President further asserted in the same address that "The years of freedom have been very good for business".

This is evidenced by the forecasted continuing real sector growth in GDPR in the Western Cape from the period 1999-2004 to 2005-2006 according to the Bureau for Economic Research.

Agriculture, forestry and fishing to grow from 1.7% to 7.4%
Manufacturing growing from 2.1% to 3.5%
Construction 6.5% to 8.8%
Electricity, gas & water 5.1% to 6.1%
Wholesale and retail stabilising around 7.2%
Transport & Communications stabilizing at 6.2%
Therefore, to rephrase the President, we can certainly say that freedom is indeed very good for economic growth.

However, we have to pose the countervailing question "Has economic growth been good for freedom"

Dr Vandana Shiva, in her book Earth Democracy asserts "Freedom from want - from hunger and homelessness and the denial of basic needs - is the most fundamental freedom, without which there can be no other freedoms."

If we believe that:
where there is Poverty there can be no real freedom
where there is income inequality there can be no real freedom
where there are high levels of unemployment there can be no real freedom
where there is no access to cheap finance, to markets, to land, to appropriate learning, to infrastructure there can be no real freedom
Then let us look at what the evidence suggests.

According to the PERO 2006 research:

• The trend in the increase in unemployment which is currently at 26, 2% shows that older people are barely retaining jobs and younger people are not getting jobs.
• an emerging trend was found in 2000 that a 1% increase in economic growth has only lead to a 1.83 decline in poverty indicating that the current rate of growth will not close the poverty gap over the long term
• we are experiencing a trend of an increasing gini co-efficient (the gap between rich and poor) having moved from 0,584 in 1995 to 0,616 in 2000
• the poorest 30% of our communities grew by disposable income of 6,7%, which was lower than the average mean rate of the rest of the 70% which is 8,98% across population groups
• the growth component reduced overall poverty levels by 9,4% but the redistribution component increased poverty by 14,6%

So clearly while our economy has shown nominal growth of 5,3%, the indicators point out is that the growth we have experienced has not been a pro-poor and shared growth.

Of interest is that this trend manifests itself across the our Continent as highlighted at the recent African Summit on Job creation as reported on in the Business Day on Tuesday. The conference acknowledged that economic growth in sub-saharan Africa has crept from 3% to 5% but has made little impression on widespread poverty. Donald Kaberuka, African Development Bank President is quoted as saying "Economic growth does matter but it must be broadly shared, and it must create employment".

With this evidence before us and having an understanding of our reality and the challenges we face - How are we responding?

Our national government has responded by introducing the Accelerated and Shared Growth Initiative-South Africa (ASGISA), led by our Deputy President. This Initiative sets a sustained growth target of 6% for the period 2010 to 2014 and addresses a number of critical interventions:

• Infrastructure investment
• Sector Strategies
• Education and Skills Development
• Eliminating the Second Economy
• Governance and Institutional interventions
• Macro-economic issues

Our Provincial response is located within this policy framework and the Western Cape Governments Growth and Development Strategy, iKapa Elihlumayo, and its lead strategies, developed over the past two years, are clearly aligned with this. The Ikapa lead strategies, Human Capital Formation, the Strategic Infrastructure Plan, Social Capital Formation, the Micro-Economic Development Strategy and the Provincial Spatial Development Framework already respond to the critical interventions highlighted by ASGISA. The Western Cape has set a target of 6-8% growth over the medium term.

The Department of Economic Development and Tourism is playing a critical role in shaping the policy and practical implementation framework responses to the challenge of ensuring a simultaneous pro-poor and pro-growth strategy.

The department has identified the following 4 strategic goals within a broader growth trajectory for the Western Cape economy:

• Promoting and mobilising investment and employment creation
• Ensuring broad-based black economic empowerment
• Eradicating poverty and addressing inequality
• Ensuring the global competitiveness of the provincial economy

To realise these goals the following interventions have framed our response to ensuring the accelerated and shared growth objectives;

The Micro-Economic Development Strategy (MEDS) Research programme, which has yielded 42 research papers thus far, covering 13 sectors and 5 major cross-cutting themes, has influenced the Province's choices to place the trajectory of the Western Cape economy on a shared and sustainable growth path.

In order to achieve maximum impact we have had to make tough choices, we have had to "pick the winners" and therefore have identified the following key high value and high impact sectors in the Western Cape for prioritised and major intervention: Call Centers/BPO, Tourism, The Oil and Gas Supply Service Hub and Metals and Engineering, ICT, Agriculture and the Creative Industries.

However, we will continue to support our traditional Western Cape sectors, clothing and textiles and fishing, through smaller-scale yet catalytic interventions.

Accelerated Growth indicators for the MEDS implementation will be:

• Average GDPR growth of above 6% per annum
• A Gini co-efficient of under 0.55
• Per capita GDPR in the top quartile for developing economies
• Unemployment under 10%
• High rates of participation in the economy
• Ownership patterns that reflect the demographics of the Province

Mr Speaker

Allow me to share some highlights in investments in some of these sectors to date:

• The MAN Ferrostaal investment of R1,7bn in the Western Cape oil and gas services sector in Cape Town and Saldanha harbours
• The Call Centre/BPO sector has invested R1 bn between 2004 to date creating 6000 jobs.
• The film industry will receive a major boost with the approval of the Dreamworld Studios, bringing in an investment of over R450 million with a projection of 8000 job opportunities and providing critical infrastructure for the industry. Construction is expected to begin within the next 6 months.

Mr Speaker, I would like to use this opportunity to welcome and acknowledge in our midst today my special guests from the film industry. Emma Kay and Steve Markowitz, the producers of the amazing animated documentary, "Beyond Freedom" (copies of which honorable members have received as gifts today). This documentary was been nominated for the Golden Bear Award at the Berlin Film Festival this year. It was one of only 10 short films worldwide nominated for this prestigious award. We also have the honour of having in our gallery, Tristram Atkins the producer of "Ongeriewe" the short film which has recently been nominated for an award at Cannes.

May, I on behalf of this House wish them good luck, we are truly proud of your achievements. In the wake of other astounding achievements by South African film-makers, like the Academy award winning "Tsotsi' and the Academy nominated "Yesterday" things are really looking up for the film industry in this country and this Province. And we are gearing up for this.

I also want to welcome and congratulate the new CEO, Mr Laurence Mitchell, of the Cape Film Commission in the House today. I am sure all will agree that with his vision, passion and energy we will certainly be placing the Western Cape on the map as a key destination and centre for the Film Industry. We will be exploring the possibilities of turning the Cape Film Commission into a One-Stop-Shop to service the domestic and international industry in the Province.

In an act to defend jobs in the Clothing and Textiles industry, the provincial government, under the leadership of the Premier helped save Rex Trueform and the Novel factory in Atlantis from shutting its doors. We have to thank House of Monatics for stepping in and rescuing both these factories.

We will be spending R41 million on our sector interventions in this financial year, with a projected total spend of just over R100 million in the two outer years.

In order to achieve the objective of shared growth, my department will focus on 3 key areas:

• Broad-based Black Economic Empowerment
• Local Economic Development
• Enterprise Development

The Department is in the process of finalising the BBBEE strategy and implementation plan, a critical outcome of the BEE conference held in 2005. The plan includes the establishment of three separate Advisory Councils for Women, Youth and People with disabilities.

As part of my Xmas deliverables last year I announced an investment of R1m to promote bbBEE. I am pleased to announce that we have formed two significant partnerships in terms of this commitment. The department has contributed R400 000 towards the WECBOF E-commerce Solution Trade Portal. In terms of the Memorandum Of Agreement, WECBOF has agreed to register 300 BBBEE SME's on the portal. 95 traders have already been registered and a further 45 have received training via the supplier upliftment programme.

The second important partnership that we have entered into is with Old Mutual Asset Management (OMAM). OMAM has established a BBBEE Fund to assist black empowerment equity deals. Our department has contributed R600 000 towards this project to cover pre- and post due diligence costs. OMAM has set aside R30m for BBBEE deals in the Western Cape in the first year.

The department provides support to black owned businesses on a continuous basis by assisting with unlocking deals and leveraging access to finance.

A budget of R1.5 m has been set aside to promote broad-based economic participation in this financial year with an increasing projected spend of R5.6 million in the outer years.

Mr Speaker

Ministers Brown, Dyanti and I have just returned from an intensive three week engagement with every single municipality and district in the Province in an Assessment of their IDP's, LED's and Budgets. It was interesting that the trend of increasing levels of growth together with continued high levels of unemployment and the increase in the number of households without income was found to be replicated in every one of these municipalities.

Local Economic Development is therefore a critical foundation for ensuring that our accelerated and shared growth objectives are achieved. Municipalities and Districts have uneven levels of capacities and are at various stages towards finalising their LED strategies, and the alignment and linkages between National and Provincial strategies need strengthening.

LED strategies are not just a list of projects that require funding but rather what we require are long term, sustainable strategies, together with implementation plans that go beyond the terms of office of politicians. These have to be evidence-based and each municipality will develop ward-based socio-economic profiles. The spatial translation of our MEDS Sector strategies will be another critical component to the development of these LED's .

Our department supports local government through the establishment and funding of Economic Development Units to provide in-house capacity to municipalities in delivering their economic responsibilities. To date, all 5 District municipalities are in the process of setting these up.

The implementation of the Plek Plan, which aims to deploy fully trained staff into regions, with full head office support, in order to get high quality LED strategies and interventions going in all municipal areas. 3 Plek Plan managers have already been appointed and the others will be re-advertised shortly.

Over and above these programmes, the department has also supported the development and implementation of pioneering pilot projects from pickled jams in Piketberg, to Khayalitsha cookies and of course to the now famous Beaufort West herbs. These projects were selected with the aim of establishing new and viable community-owned enterprises that will have a catalytic impact on economic and social activity in a local area and ultimately on the Western Cape economy as a whole.

The budget for these LED programmes is R13,3 million representing a 107% increase from the previous financial year.

The RED Door Initiative remains the critical programme in the department's promotion, support and development of enterprises in the Western Cape. Approximately 18000 potential and existing entrepreneurs have accessed the RED Doors throughout the Province between April 2005 and March 2006 and 163 businesses were supported with loan funding through our Ikapa/ABSA Entrepreneurial Fund. The Mobile Red Door was launched in February this year and currently operates in Bellville, Gugulethu and Wynberg. Together with the City of Cape Town we will look at further rolling out these Mobile Red Door services to other areas. A further two RED Door offices will be opened in Mosselbay and Stellenbosch in this financial year.

Over and above our existing programmes we will also be implementing the following initiatives:

• Small Business Week which will take place 10-12 of August. The focus this year will be on "Women in Business". This is my department's contribution towards the celebration of Women's Day and the 50th anniversary of the Women's march to the Union Buildings.
• Enhancing our RED Finance programme by forming a partnership with the South African Micro Apex Fund to launch the APEX fund in the Western Cape. The fund will address the loan market ranging between R200 - R10 000 and will focus heavily on survivalist and micro enterprises.
• Finalising, together, with the Department of DTI the Provincial Co-operatives Development Strategy and Implementation Plan.
• A Mega RED Door, in conjunction with the Business Place in the City and in partnership with Investec and Sekunjalo Investments will be established.
• A RED Campus to be established, which will focus on the provision of skills development and business training to existing and potential entrepreneurs linked to the RED Door. Training will satisfy the SAQA standards and will comprise of both a skills and mentorship component. Doors will be opened before the end of this year.

The department will spending approximately R30,6 million on the Enterprise Development programmes in this financial year and a total projected spend of R64.5 million in the two outer years.

As part of the Provincial Human Capital Strategy, the department will pay focused attention on the skills, knowledge and innovation requirements of the sectors prioritised by MEDS. These are cross-cutting interventions which aim to maximize the competitiveness of these sectors and address the mismatch of skills that exists.

The programme involves:

The key priority will be to overcome the fragmentation of service providers and develop a more responsive approach by the education and training sector to the needs of the Western Cape economy. The Centre of Extended Learning (CEL), the Learning Cape Initiative and the SETA Forum were successfully formed to deal with this challenge.

The department will also work in partnership with the FET colleges and sector bodies to establish assessment and skills development centers as a short-term pre-employment bridging package of interventions for generic employability skills customised for specific sectors. Calling the Cape, our Call Centre/BPO sector body, supported by the department will establish such a Pre-training Centre. The Centre will be capable of assessing 6000 people per year and give training to 3000 people. The aim is to provide basic training as a foundation for employment in the call centre industry. It is believed that 50% of these learners could find work as a result of such training.

The Knowledge and High Technology Units in the department have supported and will continue to support a number of exciting initiatives in the province.

• The Bandwidth Barn which is the largest shared business development incubator in South Africa and initiated by the IT sector body, the Cape Information Technology Initiative (CITI). It houses 65 ICT small and medium start-up companies.
• A Boat-Building Academy was launched by the Boat-Building sector that should see this sector moving into a new growth phase
• The Cape Clothing and Textile cluster has achieved further successes with the announcement of major retail firms joining it. Employment in firms participating now exceeds 1/3 of the total employment in the sector.
• The pilot phase of the Competitiveness Club for CMTs was successfully completed. 15 BEE firms participated and after 1 year created 59 new jobs, profit margins increased by 37%, a 22% improvement in machinist efficiency and a 29% reduction in unit costs per machinist.
• The Cape Ship Repair Initiative was launched
• The Western Cape Tooling Cluster was launched to oversee the recapitalisation and re-skilling of the critical bedrock of the manufacturing sector
• The Provincial Advanced Manufacturing and Technology Strategy, a joint initiative between ourselves and national government was launched in December last year
• The Fabrication Laboratory (FABLAB) will be housed by the Cape Craft and Design Institute and is the first phase of an innovation centre for craft and related industries. It will allow users to locally conceptualise, design, develop, fabricate and test almost any product or idea.

All these interventions and others will continue to be supported by the department and a budgeted amount of about R15 million has been set aside for this.

He challenges us to see the relationship between collective economic wealth and individual ability to self-determination.

On this note it is therefore fitting that I highlight the Department's contribution to the Siyabulela Campaign which will undertake to honour the women's and youth struggle for freedom, equality and a better life 50 and 30 years ago, respectively.

Our interventions will also validate the ongoing contribution of women and youth to underpinning a Home for All in the province.

The Department has prioritised delivery to women and youth in its enterprise delivery interventions through:

• Supporting sustainable enterprises - R2m for 60 youth SMME's and R4m for women's enterprises
• Provincial coordination of APEX, Mafiso, Umsobomvu and Khula for more effective support of youth and women entrepreneurs

In conclusion Mr Speaker, we are living in exciting but critical times for the economy of our country and Province. Economic growth,- shared, innovative, impactful , participatory, integrated ,holistic, and far reaching -is and will be the backbone of our social development and prosperity for our Province. We are indeed on the threshold of a potential path for sustainable growth which requires Chutzpa, smartness, faith, determination and courage from all the social partners; Provincial Government, business, labour, civil society and all policymaking stakeholders. We believe that ASGISA and the broad-ranging renewed set of policies represent this! Our own mix of strategies and approaches underpin this renewed effort and we believe we have gone a long way in realizing our objectives. In sharpening our joint efforts we can truly achieve a prosperous "Home for All" in the Western Cape.

Mr Speaker

The total budget of this department for 2006/07 is R188.433 million (this includes the Tourism allocation) representing an increase of 32% since the last financial year. The projected growth into the MTEF is estimated at R206.709 million in 2007/08 and increasing to R214.749 million in 2008/09.

The budget expenditure ratios and amounts, reflect I believe, Mr Speaker, a balanced frame of interventions on both, direct short-term impact areas and long-term strategic areas. They reflect a commitment to both 'invest' in and nurture the 1st economy while focusing our energies on fast tracking the 2nd economy's participation and involvement. This is the only way to bring freedom to the economy. We are making serious advances on this frontier of struggle.

The economist Jeffrey Sachs said that:

As we celebrate the 10th anniversary of adopting the 1st democratic Constitution, the Department commits itself to striving toward the realisation of our citizen's basic economic freedoms and hopes for a better quality of life in a Home for All in the Western Cape.

I would like to end off by sincerely thanking all those who have supported us in our Endeavour's as a department.

• The Premier and my Cabinet colleagues
• The Chair of the Standing Committee Mr Garth Strachan and all members
• Our Partners in the Private Sector
• Wesgro
• All our Sector bodies/SPV's
• Our social partners in the Provincial Development Council
• A word of thanks to my special guests from the film industry

I would like to thank all my officials in the Department and a special word of thanks to the outgoing Head of Department, Mr Brendon Roberts.

To my ministerial staff - a big thank you.

I would like to use this opportunity to say farewell to both Mr Roberts and Ms Gobodo and wish them will in their future endeavours.

And finally to my terribly neglected yet ever supportive Family - thank you.