Introduction
The Cape has always been an attractive place to do business. With the oldest economy in South Africa, the history of the Cape has been the history of trade and commerce. From the pastoral revolution some 2000 years ago which saw San hunter-gatherers acquire ownership of cattle, to the disastrous trading between Vasco da Gama and Khoikhoi of St Helena Bay in late 1497, to the establishment of the Cape refreshment station by the Dutch in 1652. From the earliest days of hunting and fishing, to the development of the market economy, it was clear that ours was a region blessed with an abundance of natural resources. It was equally clear though that our greatest asset was, and remains, the power of the Cape to attract and retain men and women whose love of the region has been the foundation of its growth and development.
Ons Provinsiale Regering is daarvan bewus dat die beskerming van hierdie sleutelbate - die voortgesette verbintenis van ons sakegemeenskap om in die provinsie te belê - op 'n gesonde verhouding tussen ons regering en die verskillende sektore van ons ekonomie berus.
This is the tenth Cape Cabinet meets Business Conference since 1994. In the space of ten years, the face of business has changed almost as much as the face of our Provincial Government. It has been a time of transformation, of growth, of challenges and of great opportunity. It has also been a period in which the focus of both government and business has shifted noticeably towards sustainability, social upliftment, and real empowerment.
We value this opportunity to share with you our vision for the Western Cape and our agenda for government. More importantly, we understand the significance of our partnership with the business community, and the need for forums like this one to advance the dialogue between us.
There is always an essential tension between Government and business, which results from our different, and sometimes seemingly contradictory aims - when in reality we are working for the same end-goals. Business aims for profit through growth, whilst acknowledging the need for social responsibility. Government aims to root out poverty and to create jobs to improve the lives of all the people through growth, whilst acknowledging the key role of business and profit as the economic engines for development. This is the healthy tension which must exist between us in our symbiotic relationship - government needs business and business needs government for both to succeed. The key lies in translating the tension into positive energy by concentrating on shared interests.
iKapa eliHlumayo
Die fondament waarop ons vennootskap berus, is ons gemeenskaplike verbintenis tot groei. Dit is ook die hoeksteen van die konsep van iKapa eliHlumayo - letterlik beteken dit om die Kaap te laat groei en ontwikkel. IKapa eliHlumayo word deur ons Provinsiale Regering as die voertuig gesien waardeur ons ons doelwit kan bereik om die Wes-Kaap 'n Wêreldklasprovinsie te maak, wat vir al sy mense omgee.
For iKapa eliHlumayo to succeed though, it must be accepted and embraced by all of the stakeholders in our economy, and we therefore appeal to you, as the representatives of business in the Cape, to take co-ownership of iKapa eliHlumayo.
At its most basic level, this will entail assisting us in identifying, and actively addressing the obstacles to growth and development - not only in the next year or two, but over the next ten and fifteen years. You will have noticed two conferences which were held last week in Cape Town - one on Black Economic Empowerment and the other on the impending water shortage in the province. These and a wide range of other critical issues in education, health, community safety, transport and almost every other government portfolio are the real challenges in the Western Cape which we must address together.
Business Unity
One of the most positive developments in South Africa and in the Western Cape, is the move towards greater acceptance of responsibility for these shared challenges and our common identity. In business this has been embodied in the recent announcement by the Afrikaans Handelsinstituut (AHI), the Foundation for African Business and Consumer Services (FABCOS), the National African Federated Chamber of Commerce (Nafcoc) and the South African Chamber of Business (SACOB) that they will, by September, come together under a more unified business banner.
Hierdie inisiatief was al lankal nodig en behoort interaksie tussen die Regering en die sakesektor baie meer effektief te maak. Die nuwe sambreelliggaam vir die sakesektor behoort 'n einde te maak aan uitgediende onderskeidings soos swart sakebelange en wit sakebelange of 'n verdeling tussen Engelse en Afrikaanse besigheid. 'n Enkele gemeenskaplike kontakpunt waaruit die hele sakegemeenskap met 'n enkele gemeenskaplike stem hom laat hoor, sal alle sakebelange grootliks verbeter.
One of the reasons that our Provincial Government welcomes this move towards greater business unity is that the process so closely mirrors that which has taken place in Government in the Western Cape. The NNP and ANC Coalition is premised on the same principles - that shared values, common objectives and a joint commitment to growth and development should logically lead to a unified front. The shared needs of our people far outweigh any outdated divisions along fault-lines of race, ideology, or history.
The example of Zimbabwe is often used to discourage people about the future of South Africa. On balance both business and government in Zimbabwe represented very narrow and exclusive interests. As a result all sides have been incapable of forming meaningful partnerships across the divides of history. Our hedge against a Zimbabwe-style crisis in South Africa is that we have already started to overcome these divisions, reaching a new level of political, economic and social maturity which looks beyond specific interest groups and to the greater good of the country and our people. South Africa and the Western Cape particularly is reaping the fruits of the strong consensus that has developed in the last decade in our country about our macro-economic policy framework, and the need for the free market to be balanced with a strong social conscience. In short, coloured, white, black and Indian South Africans succeed best in business, government and all other spheres of life, when building together in partnership.
Western Cape Economic Threats and Opportunities
The structure of our provincial economy offers both unique risks and unique opportunities. Although we have a robust and diversified economy in the Western Cape with 7 of the top 40 JSE-listed companies based in the province and many multinationals like BP and Shell making their national headquarters here, our economy is significantly geared towards trade and export. The manufacturing, and the financial and business service sectors account for the largest portion of our provincial economic activity - together contributing almost 40% of our Gross Regional Product and more than 20% of employment in the province.
Ons ekonomie is van nature redelik blootgestel aan nasionale en internasionale finansiële tendense. Aan die een kant word 'n aansienlike gedeelte van Suid-Afrika se spaargeld deur Wes-Kaapse instellings vir finansiële dienste en batebestuur hanteer en hoë rentekoerse asook hoë vlakke van binnelandse besparings raak die winsmarges van hierdie sektore. Aan die ander kant is ons vervaardigingsbedryf ver verwyder van baie van ons vernaamste markte terwyl die koste van brandstof, skeepsvrag en vervoer - veral gemeet in euro's of dollars - wins afhanklik maak van die waarde van hierdie geldeenhede.
'n Goeie voorbeeld is ons belangrike wynuitvoerbedryf - waar winsmarges sleg benadeel is deur die onlangse skommelings in die waarde van die rand. Bestellings is geplaas toe die rand tussen R14 en R15 teenoor die Britse pond gestaan het en R10 tot R11 teenoor die dollar. Die skielike en volgehoue versterking in die waarde van die geldeenheid het vir sekere uitvoermaatskappye verliese van tot 34% meegebring in plaas van winste van tot 58%. Hierdie blootstelling was natuurlik ook die voorland van baie ander sleutelgroeinywerhede wat ingevoerde kapitaaltoerusting benut of wat van buitelandse valutaverdienste afhanklik is soos die toerismebedryf.
We understand that this volatility severely impacts on planning and increases the risks inherent to doing business. We hope that the closing of South Africa's Net Open Forward Position by the Reserve Bank this month will contribute to more stable currency values. Ultimately though, confidence in our economy, both locally and internationally, will be the key driver of currency stability. In the Western Cape our coalition government will continue providing the political stability which economic growth requires.
Despite this volatility, there has never been a better time to invest in the Western Cape. With our outstanding network of transport and telecommunications infrastructure, our unique natural environment, our stable and delivery-focused Provincial Government, and our increasingly educated and skilled workforce, the Western Cape is an ideal investment destination and gateway to Africa. There are of course challenges which remain to be addressed, like the problem of port congestion which has led to the recent shipping surcharge, and the relatively high cost of the telecommunications monopoly - but these are challenges which we are addressing to make South Africa and the Western Cape even more attractive to further investment.
According to the latest summary of committed investment facilitated by Trade and Investment South Africa (TISA), foreign direct investment (FDI) flows to the Western Cape between April 2002 and January this year amounted to R391 million - more than that attracted by Gauteng, and second only to KwaZulu-Natal. FDI is important not only for the growth which it generates but also because it places Western Cape companies within global value chains and adds to long-term sustainability.
Een van die vele Wes-Kaapse bedrywe wat uit hierdie belegging voordeel getrek het, is die sogenaamde inbelsentrum-diensbedryf. Met Lufthansa en Mindpearl as die twee vernaamste internasionale beleggers in die bedryf en 'n aantal derdeparty-vryskutoperateurs wat veral die VK- en VSA-markte bedien, is daar tans byna 7 000 mense in hierdie provinsie by inbelsentrums in diens terwyl die bedryf jaarliks met 20% tot 30% groei.
Western Cape: Trade, Tourism and Investment Conference
To showcase our achievements and the opportunities for substantial investment in our high-growth sectors like tourism, property development, film production, agriculture, ICT, Biotechnology, conferencing and many others, I am pleased to announce our Provincial Government will be sponsoring and participating in The Western Cape: Trade, Tourism and Investment Conference to be held at the Institute of Directors in London on 10 July 2003.
This important private-sector initiative, in collaboration with our Provincial Government, will provide valuable exposure for the Western Cape business and tourism sector in one of our largest export markets. I would like to take this opportunity to encourage Western Cape business to make use of this chance to gain further exposure in this market by joining Minister Rasool, Minister Gelderblom and myself at this event. The details will be included in the CD that will be forwarded later this week to all who are present here today.
Need for World Class Skills
Without the vast mining resources of many of the other provinces of South Africa, the most valuable natural asset of the Western Cape is our people. There are so many examples of how Western Cape businessmen and women have contributed to building our World Class Province - not only the Captains of Industry like Raymond Ackerman, Franklin Sonn, Mark Shuttleworth and Pam Golding but also the small entrepreneurs like Faldielah Gamieldien who sells fresh-cut flowers in Adderley Steet, Joe Tailor whose family tailoring business has been a Cape Town institution for generations, and Mbulelo Tshoko who supplies fresh vegetables to the Khayelitsha market. The people of the Western Cape are our agents of growth - and we must invest in their development. This is the reason for our newly created Western Cape Education Foundation to increase education excellence in partnership with business; our new Cape Teaching Institute opened last September, and our new Maths, Science and Technology Academy - a first in South Africa.
Vir my is een van die indrukwekkendste aspekte van gister se toeligtingsessie oor Ruimte en Satelliet Tegnologie wat ontwikkel word by die Universiteit van Stellenbosch, die wyse waarop die Fakulteit Ingenieurswese dit reggekry het om die doelwitte van uitnemendheid op die gebied van hoë tegnologie en die noodsaaklikheid van bemagtiging en transformasie - veral deur hul uitreikprogramme na skole - te kombineer. Dit is hierdie soort verstandhouding wat ons verder in die Wes-Kaap moet uitbrei. Ons moet ons standaarde van uitnemendheid handhaaf, maar terselfdertyd ook eienaarskap van daardie uitnemendheid uitbrei, veral in agtergeblewe gemeenskappe. One opportunity which exists for us to intensify our efforts in this regard is through learnerships.
Learnerships Could Add R3,75 billion to Western Cape Growth
Learnerships offer our private sector a golden opportunity to stimulate economic growth in partnership with government. At the same time they contribute substantially towards social development. Learnerships form a key part of our skills development strategy in the province, and they are prime examples of how corporate social investment makes fundamental business sense. The burning question is why more companies have not chosen to make use of this important job creation and skills development opportunity. Whether it is because of excessive red-tape or simply not enough knowledge about the opportunities, we must address the issue.
With 26% of our economically active population currently unemployed in the Western Cape, there is a large pool of talented and motivated people waiting for an opportunity to contribute to our economy. If a business enters into a learnership agreement with just one of these people, for a single year, that company stands to qualify for a tax rebate of up to R50 000. If all of the more than 25 000 registered companies in the Western Cape were each to enter into just three such learnership agreements, 75 000 people would be skilled and up to R3,75 billion before tax would returned to the Western Cape to boost our provincial economy.
I would like to urge all Western Cape businesses to make contact with their industry SETA's, to enquire about the learnership opportunities that are waiting to be utilised, and to help us build our World Class Province which Cares. Corporate social investment makes business sense, and for minimal overheads such as a work-station and annual group insurance premiums, learnerships will benefit both business and the people of our province as a whole.
Conclusion
The Western Cape Provincial Government is a government open for business. We are committed to building our World Class Province which Cares in cooperation with all of our economic partners. We urge you to engage with Government to help us in this endeavour.
On behalf of our Government and the people of the Western Cape, I would also like to thank you for the invaluable contribution that your efforts have made to the continuing success of our province. You have our undertaking that we, as government, will continue striving to create the best possible environment for growth, development and prosperity in the Western Cape. This is iKapa eliHlumayo - our agenda for Government as we work to build our World Class Province which Cares.
Enquiries: Riaan AucampCell: 083 778 9923
