Mr Speaker, I would like to begin by introducing the gifts before you to members.

In 2002, nine previously disadvantaged citizens from the community of Piketberg took control of their futures and established a company called INTABA, meaning "mountain". They received training on how to run a business and on the finer skills on how to produce top quality jams and chutneys. In 2003, production began and they remained a micro producer faced with the myriad of problems besetting such enterprises.

In 2004, we joined forces with the CSIR to transform, INTABA into a modern jam manufacturing plant. Our help resulted in the expansion of the production capacity to service sustainable retail markets, the commencement of building alterations and the purchasing of their first delivery vehicle.

But the story does not end there. They have begun passing on their skills and knowledge to others. For example, they have provided a four-day training course on the making of jams and chutneys to five Beaufort West residents.

In this way, in one small project, we have given effect to Black economic empowerment, women’s economic empowerment, enterprise development, employment creation, access to finance, skills development, promotion of beneficiation of our agricultural products, promotion of manufacturing, raising the standards of manufacturing, seeking new markets for our products and stimulating economic opportunities in rural areas.

For me, though, the best part is that we have established a model which can be replicated at many other sites in the Province without having to go through all the teething problems again. We believe that more producers will provide sufficient volume to interest the big retailers and overseas buyers.

In 2001, once again in partnership with the CSIR, we launched the Beaufort West Hydroponics Herb-Farm project as a small-scale income- generating project for women who had lost their social grants.

We had several objectives: first, to explore the development of new industries in the Presidential node of Central Karoo in order to create sustainable employment; second, to learn to grow fresh culinary herbs to export quality standards; third to test the model of a community-based and owned enterprise; and, fourth, as with INTABA, to develop a model for community-established, owned and managed enterprises which could be replicated easily in the district and elsewhere in the Province.

The following has been achieved:

Job creation: 40 people are currently permanently employed, with 24 interns. Some 80 jobs are envisaged which will make it a medium-sized enterprise. Some 90 percent of the currently employed are women, and 15 percent of these women are former beneficiaries of State-funded maintenance grants.

Skills development: Two of the participants have been trained as trainers in hydroponics. Several other participants have received job-specific training, which puts them in line for job promotion in the enterprise.

An increase in project assets and opportunities: The enterprise has purchased its own refrigerated delivery vehicle.

An increase in production capacity: The anchor clients have doubled their orders for both the domestic and overseas markets and additional greenhouses will be completed by the end of June 2005; and

An increase in standard of living of the local community: The enterprise has injected an annual salary and wage income into Beaufort West of more than R2-million.

This year, we will begin the exciting phase of replicating these two success stories across the Province

The simple gifts from the department you see in front of you are the products of these two enterprises.

Mr Speaker, this is a truly exciting time to be working in the Economic Development Portfolio.

For the first time in the Province’s history, we have a articulated a comprehensive plan for economic development; we have restructured, re-orientated and expanded the department to deliver against the plan and, in all three years of our MTEF budget, we have been provided with considerably more funding for taking our mandate forward.

Firstly, let me introduce the plan.

At present, my department is engaged in a mammoth exercise to put in place the first comprehensive Micro-economic Development Strategy for the Province. We are nearing completion of substantial research studies into 16 economic sectors and four cross-cutting themes in the economy.

I cannot stress the importance of this document enough.

These documents and regular updates of the research and analysis will form the solid platform of evidence and analysis upon which we will build all our economic strategies and interventions as a Province from now on.

This information and all future updates will be made available to the public so that all citizens, public planners, businesses, investors and our trade partners can have certainty about how we see developments unfolding in the economy over the medium term.

Every single one of these industry-based economic strategies will focus, in the first instance, on sustainable growth and the global competitiveness of sectors and sub-sectors. However, to be sustainable, growth must be shared. And so, each of these strategies will have detailed BEE, small business development and local economic development components, not as add-ons but as fundamental pillars.

The document will contain three levels of evidence and analysis.

At the first level, we have a detailed summary of the State-of-the-Province in each sector or theme. Researchers have also been asked to offer their views on what policy levers and actions Provincial Government can use to achieve our goal of a growing, highly flexible, robust, sustainable, globally competitive, labour-absorbing, shared economy.

At the second level, we have set in place a committee of very experienced supervisors of economic research to oversee the quality of the research, to integrate and synthesise this research and to prioritise the recommended actions to achieve our medium-term goals.

At the third level, my department and I will evaluate the recommendations of the researchers and the oversight committee and will translate these into a practical plan of action, the true Micro-economic Development Strategy, if you like. It will be fully integrated and harmonised with other relevant strategies of all spheres government and will crowd in funding and support of all other potential economic developmental partners through leadership and the effective use of this budget and successive budgets.

A draft version of about half the research and a first draft synthesis document has been delivered to your offices today. It looks like this.

Over the next two months, we will engage in intensive consultation with our social partners on the contents of the strategy.

The first full version of the document will be available in July 2005.

To deliver against such a strategy we need an appropriately structured and resourced department.

During the last two years, my department has been engaged in an intensive self-examination in the light of the new roles in will have to play as the implementer of the Micro-economic Development Strategy.

In December 2004, Cabinet approved the architecture of a new structure and authorised the implementation of the first phase of development.

In essence we have put in place units to deal with economic sector development, economic stimulation, economic participation and the regulation and development of a fair, supportive and encouraging business environment.

The budget gives effect to this through a new programme structure.

We will seek Cabinet approval of the final phase of this restructuring to be implemented in the 2006/2007 fiscal year.

If Government is to be taken seriously as a leader in initiatives to grow and transform the economy, we need to be able to bring to any endeavour, not only our influence, but also appropriate levels of resources to crowd in the resources of our social partners.

To this effect more than R145.1-million has been made available to this vote in the current fiscal year. This is 14.7 percent more than the anticipated MTEF amount.

In the 2006/2007 fiscal year, a provision has been made for R184.5-million followed by an amount of R202.7-million in the 2007/2008 fiscal year, which is some R88-million [or 77 percent] more than the Province provided for economic development in the 2004/2005 fiscal year.

Mr Speaker, given our situation of extreme fiscal pressure, there can, surely, be no more convincing signal than this that this Government is serious about growing and sharing the Western Cape economy.

I would now like to deal more specifically with the main thrusts of our work: Promoting Participation in the economy; Promoting Economic Growth and Global Competitiveness and Regulating and Improving the Business Environment.

I would like to turn to economic participation first.

In his 2003 State of the Nation Address President Mbeki said:

“Government must act to ensure that we reduce the number of people dependent on social welfare, increasing the numbers that rely for their livelihood on normal participation in the economy.”

As a consequence, we have made the quest to draw the historically disadvantaged and the presently marginalised into a single integrated economy as one of our two key priorities.

3.1] Let me begin with Economic Empowerment: We are in the process of finalising the Western Cape Implementation Strategy for Broad-based Black Economic Empowerment. Consultation with our social partners and players in specific sectors will take place during May and June 2005.

As part of the consultation process seven theme workshops will be held in across the Province. The themes will include: Skills Development and Employment Equity; Ownership, Scorecards and Charters in the Clothing & Textiles, Tourism, Wine, Fruit, Fishing, Film & TV and Construction sectors; Women’s Empowerment; Empowerment of Youth and people with disabilities; Preferential Procurement; and Enterprise Development. The resolutions taken at the theme workshops will be presented to a one-day Economic Empowerment Conference in June 2005. All recommendations endorsed by the conference will be harmonised with the Micro-economic Development Strategy and implementation will begin in the third quarter of 2005.

3.2] I would like to turn next to Enterprise Development: Last year we devoted a great deal of energy to the development and initial execution of the Real Enterprise Development or RED Initiative, our Province-wide, one-stop shop for both financial and non-financial support for small business.

In November 2004, the first RED Doors opened for business in Khayelitsha and Mitchells Plain. Up until the end of March 2005, more than 1 800 aspiring and existing entrepreneurs were assisted. More than 40 percent were women, 30 percent were youths and 2 percent were people living with disabilities.

Mr Speaker, a fascinating and totally unanticipated development unfolded. It just so happened that the two staff members of the Khayelitsha RED Door had expertise in assisting applicants with tenders. As a result clients of the Khayelitsha RED Door won more than R5.2-million in tenders by the end of March 2005 and that figure now stands at R8.8-million. This has resulted in us training all our RED Door advisers to be able to replicate this success story.

The iKapa/ABSA programme, providing direct access to finance to so-called “unbankable” entrepreneurs has provided financial assistance to 159 entrepreneurs to start, expand or sustain their businesses. A total of R14-million in loan capital was disbursed. The entrepreneurs were also provided with mentorship for a period of at least 24 months. The success of the programme to date has prompted ABSA to consider rolling out similar programmes in two other provinces.

The big success story of our 100 enterprises incubation project was that, as a result of our assistance, one small business secured a sole service provider contract with a major enterprise in the airline industry.

In this quarter Red Doors we have already opened RED Doors in Hermanus, Atlantis and Oudtshoorn and will be opening Knysna, Beaufort West, and Paarl in the next few weeks.

I will continue to knock on the appropriate doors to raise the R50-million a year which I have promised to supplement the R14-million that ABSA and the Provincial Government contribute to our RED Finance scheme.

3.3] Earlier I gave two examples of our work in Local Economic Development. Our Local Economic Development Unit provides guidance, support and capacity to municipalities in the establishment of economic development units. Once established, these units will provide in-house capacity to municipalities to deliver on their economic development mandates. At present, all five district municipalities are in the process of establishing economic development units with our support.

As we are all aware, there is low capacity to undertake economic development planning and implementation in most Western Cape municipalities outside of the City of Cape Town.

One of the options open to us to address this is to go through a slow route of allowing municipalities to develop this capacity on their own and at their own pace. That has been our approach for ten years. We all know the results.

So we have developed a plan to fast-track the development of high quality economic development capacity in all those municipalities outside the Metro who want it. It is called Die Plek Plan, which is a contraction of the fuller name: die Plaaslike Ekonomiese Plan.

In effect, my department will “parachute” fully trained and equipped staff into municipalities areas over the next three years. They will help translate potential business opportunities as defined by the Micro-economic Development Strategy and local circumstance into real enterprises, which can be taken up by local citizens.

The unit will be staffed by personnel who are well trained, competent, with extensive understanding of municipal LED challenges, and focused on delivering a service to local authorities, citizens and businesses.

Die Plek Plan manager will be an ‘active-unlocker of blockages’ in that the unit will provide access, or source access to relevant business information, resources, and support services; as well as any available networking opportunities that would assist clients.

3.4] Mr Speaker, in the past few weeks, I have been shocked by some comment from the HAVES in our society at the notion of giving R1 000 to each of 1 000 unemployed people to start survivalist business.

One radio interviewer suggested that it was just enough to pay the average restaurant bill and, therefore, could not possibly serve as the basis for a sustainable business.

Well, I have to tell the HAVES that the HAVE NOTS disagree. Many resource poor, unemployed people who are genuinely excited about the possibilities of this initiative have stopped me on the street to express their enthusiasm.

I’d also like to tell the HAVES that we did not simply pluck this idea out of the air. We have already run a successful pilot. The Business Beat R 1 000 Challenge resulted in 70 percent of selected businesses becoming sustainable within three months based on start-up capital of R 1 000. These successful businesses have maintained a turnover of R 4 500 on average a month.

Given the enormity of our unemployment problem, besides creating jobs through growth of the economy, we also intend to use unconventional initiatives to address unemployment like our 1 000 X 1 000 Challenge. Every municipal area in the province will be represented among the 1 000. The project will not only see the establishment of 1 000 businesses, but will also provide for the training of at least 200 informal sector business mentors. The latter will mean that the Red Doors will then have access to these trained mentors after the project has been completed. These mentors will prove invaluable in addressing the needs of informal sector businesses.

Mr Speaker, I would like to turn now to the Growth-orientated programmes known as Economic Sector Development and Economic Stimulation. Together they account for some R80.6-million with some R67.1-million devoted to giving effect to sector-based interventions arising from the Micro-economic Development Strategy and the balance of R13.5-million allocated to stimulating the economy and increasing the strategic competitiveness of our workforce and our enterprises.

As I indicated earlier all the interventions in these areas will be firmly rooted in the Micro-economic Development Strategy. And even though, we still intend to consult widely on the nature of major interventions which we will undertake in future fiscal years, there are some interventions which we have identified to undertake this year which are already known to be supported by our social partners.

4.1] In the primary sector, we have established the Western Cape Beneficiation Initiative to enhance development of primary products. This year, the Initiative will spend R400 000 to investigate beneficiation opportunities in selected biodiversity or natural products sub-sectors, such as, Rooibos, Buchu, essential oils and seaweed.

We will support the small-scale fishing sector with an emphasis on women.

In the Freshwater Crayfish, we will help establish the first Marron crayfish hatchery in Africa. Marron is the most sought after freshwater crayfish species and produces the highest processing yield. We will invest R500 000 in this project that will boost Black Economic Empowerment over the medium to long term through enterprise development, human resource development, and employment creation and will contribute to the increase of exports.

We will continue to support the Rooibos Trade Mark case in the United States up to an amount of R250 000. I am pleased to report that early intervention on our part last year appears to have placed us well to win back the rights to the exclusive use of this important indigenous product.

4.2] In the secondary sector, we are exploring a possible partnership with the Indian Institute of Gems and Jewellery to implement a Human Resource Development Project in the fine jewellery industry. We are also exploring the possibility of a domestic jewellery school.

The tooling industry is crucial for the development, competitiveness and expansion of the manufacturing. We also outsource a large proportion of our tooling needs because the dearth of domestic toolmakers. To address this issue, we have sent 12 mechanical engineering graduates to undergo training at the Indo-German Tool Room Programme in India. When they return, they will serve as trainers at a technology training centre to be established in the Western Cape which, when fully resourced, will result in the training of 240 tool designers and manufacturers over the next five years and has the potential to generate 2 000 additional jobs in the tooling industry alone, as well as increasing the industry turnover by an estimated R800-million a year.

The clothing industry’s pilot cluster initiative, the Cape Clothing Cluster, seeks to make the industry more responsive to the needs of the market, has been met with support from firms employing more than 10 000 workers.

Last year, about 1 000 employees at SME clothing companies have increased job security from a targeted skills development programme run in their firms by the Department and it’s partners. This year this project will evolve into a multi-lateral effort by various local and international institutions to transfer best practice to 60 small businesses and their 3 000 employees in the form of a competitiveness club.

We will continue to support the Cape Craft & design Institute to develop the craft sector. Last year, 507 enterprises who employ more than 4 000.

In the oil and gas sector, my department and I are in advanced discussions with national and international players to bring our West Coast off-shore gas on shore and to prepare for the impact that this will have on the creation of downstream opportunities, including the possibility of an independent power producer and other uses.

Our work continues with national Government and business to position Cape Town and Saldanha Bay as an Oil and Gas Supply service hub for the oil and gas industry of the West Coast of Africa.

We have begun talks with national and international players to explore the development of a petro-chemical hub in the Southern Cape.

My department is also engaged in initial work around the downstream opportunities in the petrochemical industries in the South Cape.

In the tertiary sector, our efforts to develop Cape Town as a market for the international call centre industry have begun bearing fruit. This sector has extraordinary potential to create jobs in Cape Town, particularly for the historically disadvantaged, particularly women and young people.

Last year, CallingtheCape, our partner in this work, secured R380-million in new international investment, resulting in 2 000 sustainable, high quality jobs being created through eight new international companies and a host of smaller local start-ups and expansions. This year, there are four new investments already and more in the pipeline.

Funding and direction was given to the Cape IT Initiative, a non-profit promotion agency for the ICT industry with a mission to grow the WC into an international ICT hub. The Initiative’s pioneer project was the establishment of the Bandwidth Barn, which hosted 66 ICT small businesses. In addition, we funded a pilot programme called the Launchpad Programme targeting BEE ICT start-ups. We will continue to support these and other innovative projects in the ICT sector.

We will continue to support the work of the Cape Film Commission, in their growth and development programmes which serve to attract big budget features, increase production capacity, improve skills via a development fund initiative and make the Cape Region film friendly for both foreign and domestic producers and investors.

We have made provision for the second payment of R15-million to finance the development of a film studio in the Western Cape. The land has been purchased and site-clearing work is underway. All parties have been incentivised to speed up developments as a result of consideration of the Western Cape as the location for a major blockbuster if the studio is operational in time.

Whilst tourism growth in terms of volumes and turnover continue unabated, equity remains elusive. As a result, we are looking at two kinds of equity distribution in this sector. The first being a spatial distribution of benefits and the second being demographic.

The Integrated Tourism Development Framework (ITDF) is the blue print for how provincial government and its stakeholders will develop tourism over the next 10 years. The framework identifies 11 tourism development areas. We plan to focus on the following development nodes this year:

• Plans for the Cederberg Gateway: Development plans have been completed and negotiation with a private partner is underway.
• Business plans have been completed for the Northern Gateway in Beaufort West and the project has been short listed by national government to receive a possible R2.4-million for infrastructure development.
• The Eastern Gateway is a joint initiative between my Department, Cape Town Routes Unlimited and the Eastern Cape Tourism Authority. We are in the process of identifying a suitable location in the Storms River area.
• A final set of proposals for the Cape Flats Tourism Development Framework is due by the end of July 2005.
• Funding was made available to conduct an economic impact assessment on Route 62 and a final report is expected September 2005.
• The final business plan and feasibility study has been completed and we are in the process of finalising the precinct plan for the Southern most tip of Africa at Agulhas.

We will continue support for the many tourism enterprise development initiatives that we run like The Tourism Business Training Programme, The Cape Tourism Showcase and The Tourism Mentorship Programme. All these programmes were accessed through our extensive network of entrepreneurship support agents or Tourism Help Desks that have now been established in most municipalities.

An amount of R3-million has been allocated to tourism empowerment initiatives this year like:

• Access to the Cape, which was launched to create opportunities for marginalized communities to explore and experience our major tourism attractions.
• The Provincial Tourism Bursary Fund, which offers access to the wine industry and wine tourism fields of study for undergraduate students.
• The Youth Tourism Indaba, which, last year, gave an opportunity for some 300 youths to interact with us on pertinent tourism issues.

We provided financial and strategic support to 17 community tourism development projects last year and will continue this grassroots work.

The department and Cape Town Routes Unlimited will develop a unified system for the collection, collation, distribution, monitoring and evaluation of both supply and demand side statistics in the tourism industry. This is in response to problems identified in the Micro-economic Development Strategy research.

The Integrated Tourism Entrepreneurship Support Programme, a partnership between the Development Bank of South Africa, Cape Town Routes Unlimited and ourselves was initiated in 2004. The programme focused on developing a network of agents who could assist tourism business with market access. An amount of R3-million has been allocated to this programme. This year the focus will be on utilization of professional business analysis to improve the development of SMME tourism businesses.

By far our biggest single initiative is Cape Town Routes Unlimited, our destination marketing organization that we co-sponsor with the City. This year our contribution to our tourism-marketing agent will be R22.8-million.

Its task is to establish a winning brand; ensure an inclusive and equitable industry; maximise marketing impact and resources; and improve the business to leisure tourism ratio.

The targets which we have set for Cape Town Routes Unlimited this year are: An increase in foreign visitor of 3 percent and domestic arrivals of 7 percent; An extension of the length of stay of the leisure tourist by 2 days and the business tourist by 1 day and Visitor receipts of R3.6-billion from the domestic market and R17-billion from the foreign market.

Mr Speaker, I would like to turn to our plans for direct economic stimulation.

This year we will establish a Strategic Competitiveness Unit that will focus on innovation and technology, knowledge economy issues and workforce development. Its primary aim will be to ensure that our enterprises and our citizens are able to hold their own in the rough-and-tumble of the global economy.

Our province suffers from an anomaly: unemployment and unemployability, whilst at the same time, experiencing skills shortages particularly at intermediate and high skill levels, and in technical occupations that are underpinned by the foundational learning fields of mathematics and language, but equally, by the physical and biological sciences and ICT. Part of the explanation is that skill formation and supply is not sufficiently responsive to opportunities that are available in the economy.

However, the relationship between the supply of skills and labour absorption in the economy is a complex one. We believe that skill formation needs to link political, economic and industrial strategies and matters of work organization, technology, and product markets. Such an approach coordinates HRD strategies with demand-side policies. To give effect to this, we plan to establish a Workforce Development Unit during the fiscal year.

We will continue our support for the Learning Cape Festival, which, inter alia, is playing an important role in building social capital among the many diverse players in the lifelong learning field. An exciting development in the broad human resource development field has been the agreement by the social partners, business, labour, civil society and government to establish a Learning Cape Initiative to formalise the on-going dialogue in this sphere.

We have outsourced our investment recruitment, trade promotion and exporter development functions to Wesgro, which is also becoming active as a Provincial industrial development agent. We have set them targets of attracting R5-billion in direct investments as well as increasing the number of exporters by an 800 over the three years to March 2007.

During 2004, Wesgro played some role in securing over R1, 536-billion in direct investment and helped to register over 400 new exporters. The bulk of the investments received were from new investments at R576-million, with R267-million being invested in expansion of initial investments.

The breakdown of new investments leans heavily in the services sector at R449-million followed by manufacturing (R112 million) and resource-based industries (R15 million).

My department has also recently established a Unit to provide support to businesses in matters related to HIV/Aids in the workplace. A budget of R600 000 has been allocated for its first year of operation.

I’d like to conclude with the regulation of the business environment.

6.1.] Recently, Cabinet approved a liquor policy for the Western Cape that will form the basis for provincial liquor legislation that will serve before this House in the next few months.

The proposed legislation will replace the currently outdated Liquor Act, No 27 of 1989 and will give effect to the new provincial mandate to regulate the retail and micro-manufacturing tiers of the industry in line with the provisions of the National Liquor Act, No 59 of 2003.

The legislation will not, repeat not, provide extraordinary measures to facilitate the entry of existing unlicensed traders or shebeens into the regulatory system. We have decided to delay giving effect to this aspect of the policy until enabling provincial planning legislation is in place to ensure a coordinated approach to the vexed question of the licensing of shebeens within residential areas.

On the other hand, we will be stepping up programmes to deal with some of the other objectives of the liquor policy document like raising awareness around foetal alcohol syndrome and the implementation of mandatory training for new licence holders.

6.2] We have appointed members of the Consumer Tribunal and have drafted regulations for its operation and the Tribunal is set to hold its first hearings by July 2005.

But it is easy and inexpensive access to advice and assistance by the ordinary man and woman in the street that is the real jewel in the crown of our efforts to protect our consumers. Whilst the tribunal represents the teeth of the protection measures, ordinary people, going about their daily dealings with businesses and other service providers, want the assurance that they will be assisted quickly and efficiently, only having to take the legal route when all other means of obtaining redress have failed.

We already have a network of 28 Advice Offices that provide Consumers with access to advice and assistance in places as far afield as Vredendal, Prince Albert and Kwanokuthula outside Plettenberg Bay. Each of these 28 advice offices have been equipped with a new computer and printer and, in some instances, furniture during the past year. This year we will furnish these offices with an electronic complaints management system that will make them even more responsive to consumers and enable the department to provide inputs on more complex complaints much more rapidly.

We are all also about to distribute an innovative A to Z Consumer Reference Guide.

6.3] Our Tourist Guide Registration Office will focus on the transformation and development of the Tourist Guiding industry by facilitating the training and mentorship of historically disadvantaged individuals as tourist guides in programmes like the Community-based Tourist Guide Training Course in partnership with the Cape Peninsula University of Technology and the Environmental Guides for the Cape Peninsula Programme.

In the absence of national legislation aimed at curtailing illegal guiding, we have published an Illegal Guiding Awareness Pamphlet that will be distributed by dedicated tourism traffic officers.

6.4] In the tourism signage regulation portfolio, the Route 62 and the West Coast pilot projects will be completed and marketed later this year. Three routes in the Overberg region the Whale Route, The Agricultural Route and Southern-most Tip Route are in the process of being developed. We are also a partner in the Cape to Namibia tourism route project along with Northern Cape Tourism and Namibian Tourism.

6.5] In December 2004, we launched a pilot tourist victim support programme called the Tourist In Distress Campaign which set out to respond to the immediate needs of tourists who had been the victims of accidents or crimes. Our aim was to help the victims and their travelling companions and families by assisting with their immediate needs and by demonstrating a responsive and caring attitude. In this way we hoped to ameliorate the possible negative perceptions that could arise as a result of the incidents.

The Tourist Victim Support Programme dealt with over 40 incidents during the high season. The majority were cases of robbery. Unfortunately, a few serious cases of assault were reported, receiving adverse publicity. The Tourist Victim Support Programme was able to act in such a manner that we received very positive newspaper reports in relation to a Japanese woman and a Polish man.