Madam Speaker, hon members, the world, and, in turn, the South African economy, are in distress. Much has been said over the past few months about this crisis, and many predictions, assumptions and possible remedies have been put forward. We all know that the current situation is very bad, and many are predicting that it will get even worse.
Ultimately, we don't know exactly how bad the situation will get and exactly how much damage it will cause. All we can do is speculate. In the interim, we must be proactive and implement innovative policies and plans to best deal with the current situation, as well as to ensure that we do not ignore our long-term growth and development needs. When we do emerge from this downturn, we must be in a position to continue on our growth path and reach our economic and social targets. The economies of the developed world and our main trading partners are in a panic, with many of the traditional economic powers in recession and facing the prospect of an unprecedented number of job losses.
The hon Minister of Finance indicated to this House that 2,6 million US workers lost their jobs last year. This year, the state of California alone is to start notifying 20 000 state workers that they may lose their jobs. While these problems might seem a million miles away, they do have a direct effect on the developing world and our prosperity.
The World Bank has said that about 53 million people in developing countries will remain poor because of the world economic slowdown, and estimates that 40% of the world's 107 developing countries are highly exposed to the global crisis. This crisis will undermine efforts and gains that have been made in reducing poverty.
The effects of the economic stagnation are already being felt harshly right here in South Africa. According to a report by the Motor Industry Bargaining Council, 36 500 jobs were lost in the local motor industry between July and last month. This number is set to increase as more jobs in the industry are in jeopardy. This is terrifying when you consider that jobs will most likely also be lost in other sectors such as mining, manufacturing and textiles. The social ramifications of these retrenchments are enormous. In his state of the nation address, our hon President stated that alternatives to layoffs would be explored, including longer holidays, extended training, short time and job sharing. The IFP hopes that some of these interventions will be implemented urgently and that assistance is given to ailing sectors.
Turning to job creation and growth, during periods of relative prosperity there were still not enough jobs being created to meet the needs of our growing population. We acknowledge that there are impediments preventing us from attaining a higher growth rate of at least 8%, which we believe will be needed if we are to create the amount of jobs that we want.
These impediments, such as rigid labour laws and ageing infrastructure, must be removed, and an environment that is conducive to growth, development and investment must be created. We must also make it easier for emerging businesses and SMMEs - small, medium and micro enterprises - to obtain finance and other support from our development finance institutions. These institutions must also be properly financed and staffed with professionals who are capable and able to provide a high standard of service. The promotion of SMMEs is especially important for the creation of employment during this difficult time.
In his Budget Speech, the hon Minister of Finance indicated that the Umsobomvu Youth Fund had been allocated R1 billion. This fund was created in 2001 to help youth development, but it has not been successful in this regard and has serious shortcomings that have left scores and scores of young people marginalised and excluded from its programmes ...