Hon Chairperson, Minister Patel, Deputy Minister Mkhize, other hon Ministers and Deputy Ministers from the Economic cluster present here, Members of Parliament, distinguished guests, special guests of the Department of Economic Development, ladies and gentlemen, let us from the outset, congratulate the department for its positive audit outcome once again. [Applause.] Since its inception it has been receiving unqualified audit outcomes. This represents an institution that has good corporate governance practices.
There is a saying that goes that the future can be defined by where we come from. Thus defining the historical background will clearly define the Department of Economic Development, its mandate and its objectives. In addition, it would be important to give the highlights about the department's evolution. The policy origins of the department is to be found in the economic transformation resolution of the 52nd National Conference of the ANC held in Polokwane in December 2007. The conference resolved the following.
Firstly, in order to achieve the necessary economic growth and development, the building of the strategic organisational and technical capacities of government in the context of a democratic developmental state is essential. Secondly, a strengthened role of the central organs of state, including - through the creation of an institutional centre for government - wide economic planning with the necessary resources and authority to prepare and implement long and medium-term economic and development planning, have to be established. Lastly, the integration, harmonisation and alignment of planning and implementation across all three spheres of government and with the development finance institutions and state-owned enterprises, including - through the development of coherent intersectoral at national level and the alignment of local implementation in terms of the Integrated Development Plans, IPDs, of metro, district and local municipalities, had to be realised.
It was in the light of the above that the Department of Economic Development, EDD, was established in July 2009. It is just only four years old and it begins its fifth year. The department was created with the sole aim of creating decent work through meaningful economic transformation and inclusive growth. The ANC-led government through the EDD for the past four years, despite its young age, has managed to co-ordinate a response plan to the global economic crisis; processed its mandate on the alignment of jobs; completed the development of the New Growth Path in 2010; aligned the work in government to the New Growth Path; started implementing Outcome 4 on jobs and growth; and launched work on the infrastructure jobs driver.
It refocuses the Industrial Development Corporation, the Competition Authorities and the International Trade Administration Commission on jobs. It has initiated dialogues to develop social accords on key NGP areas. The latest one is the signing of the Youth Employment Accord. As the department, we recommend that we need to expedite the implementation of this accord.
We managed to consolidate small business entities, that is, merging the SA Micro Finance Apex Fund, Samaf and Khula Enterprise Finance into one entity now called Small Enterprise Finance Agency, Sefa. It has been fully integrated under the Industrial Development Corporation, IDC. We have launched and implemented the infrastructure plan and strengthened NGP focus on industrial policy.
The President, in his state of the nation address, re-emphasised the importance of infrastructure as a vehicle for job creation. A number of infrastructure projects were indentified for implementation. The department should be commended for its active role in the Presidential Infrastructure Co-ordinating Commission.
The Minister is the head of the Presidential Infrastructure Co-ordinating Commission's Secretariat. The department's key role is that of co- ordinating and integrating the work of various departments and providing secretarial services to the PICC with regard to the implementation of the National Infrastructure Plan. In the light of this we would like to commend the collaborative approach and efforts in the above regard by the government. This shows the dying of the silo approach in doing government business.
Having said the above, it is worth mentioning also that this could not be achieved without challenges. In the committee's engagement with the department the following challenges, amongst others, were noted. Firstly, the policy mandate of the department is quite clear. It was established to ensure integration of existing functions and mandates of government departments; to co-ordinate the work of finance institutions and regulatory agencies; and to implement the plans and decisions of the executive structures of government with the main focus being on ensuring achievement of better jobs and industrialisation.
The scope therefore tends to be wide and it cuts across other government departments. Thus it requires extensive co-ordination and co-operation with other departments. If not really attended to, this may pose a serious challenge to the achievements that we have made.
Secondly, there is a lack of an impact assessment and monitoring tool which would enable easy reporting of the department, entities and other stakeholders on the impact of development issues such as jobs, poverty, inequality, small, micro and medium enterprises, SMMEs, development, etc. Moreover, the existence of such a tool would have enabled easy monitoring of the NGP targets.
Thirdly, the role of the regulatory bodies in ensuring industry competitiveness, fair trade and addressing anticompetitive behaviour will need to be enhanced. It is clear that, going forward, we need to ensure that we also assess the outcomes of the decisions made by the regulatory bodies. This will enable us to determine the impact of those decisions on the poor and the development of the SMMEs and co-operatives. For example, we would want to be able to answer questions such as what happens after price collusions have been detected, confirmed and a penalty charged on food prices. Does the baseline price change or remain high to the detriment of poor households? As a consideration, do we need to enforce certain conditions that would favour poorer households or reciprocity commitments towards attainment of government goals?
Fourthly, there is the enhancement of co-ordination of the work of the national and provincial economic development departments. We still see elements of silos in some instances. We feel that this needs to be strengthened together with the human resource capacity that would ensure speedy processing and implementation of priority initiatives and projects by the department. We see this as a major challenge.
Notwithstanding the above challenges, we would still want to welcome and commend the department for having taken a positive approach addressing most of the above challenges. For example, an impact assessment and monitoring tool is in the process of being developed to monitor and assess the impact on the work of entities with regard to job creation and other development indicators.
Going forward, the entities that report to the department will be held accountable for direct impact on jobs and development. In future, the department would therefore be able to give detailed reports with regard to impact and progress made on jobs.
While we look at internal challenges we should not fall short of mentioning other external challenges that serve as a hindrance to the advancement of the work of the department and government as a whole. The external challenges that confront our country have been the subject of considerable debate both in the world economic forums, amongst economists and developmental economists. What has been central to these debates is that classical economic theory has contributed manifestly to the global economic challenges we have today.
The ANC-led government's response reflects the growing progressive economic theory posture that the state must of necessity intervene in the economy so as to ensure the necessary growth required to build the economy. Our countercyclical fiscal economic stance, as articulated in the New Growth Path, provides the strategic economic approach and provides for continued financing of the infrastructure programme and the industrial strategy, both of which will result in greater levels of growth in the economy over the medium-term.
It is also important to indicate that despite the department having made much progress within its four years of existence, there is consensus that more still needs to be done. The unemployment level is still high and youth unemployment in particular is still a challenge. I think we've heard the statistics by Statistics SA. I don't need to go through it, especially its impact on the youth.
The need to improve performance of productive sectors of the economy, like manufacturing, mining and beneficiation, agriculture and agroprocessing, cannot be overemphasised. More still needs to be done with regard to the development and financing of the SMMEs and co-operatives, especially with more focus on women, youth, the disabled and rural population. Together with the department, as the portfolio committee, we are prioritising our interventions in this regard. For instance, a round table forum is being organised to look at the challenges facing the survivalists, SMMEs and co- operatives, including women, people living with disabilities and those in the rural areas with the whole aim of finding appropriate and effective solutions. My colleague hon Mabasa will elaborate more on this subject.
The triple challenge facing the country is multitude and have manifested themselves over a long period since the apartheid era. The challenges require effective and honest dialogue, co-ordination and strong partnerships involving both the private sector and public sector, not forgetting civil society.
It is important to note that the Budget Vote today is well timed. It is happening against the backdrop of the World Economic Forum on Africa 2013, which is starting tomorrow just behind this venue, thus bringing hope to finding solutions to the economic growth challenges facing not only South Africa, but also the continent. We would like to join the leadership of the country in welcoming the distinguished guests and members participating in the World Economic Forum. We wish them successful deliberations and outcomes.
In conclusion, let us not forget that the socioeconomic challenges facing our country will need much more than the Department of Economic Development's effort, but rather a concerted effort from every member of this nation, including the partnership I have alluded to earlier.
Let me thank the department and its entities for their continued co- operation and wish them well in their 2010 endeavours. We would also want to thank the members of the portfolio committee and its support staff for their continuous wisdom in overseeing the work of the department. We recommend that the House supports the EDD Budget Vote, No 28, of R771,466 million. I thank you. [Applause.]