Chairperson, Israel has approximately 7,5 million people. The country has been in a constant state of war since its founding and has no natural resources. Yet Israel produces more start-up companies than Japan, China, India, Korea, Canada and the United Kingdom. South Africa, a country with all the natural resources in the world, has much to learn.
Trade between African nations needs to be stimulated. We need a specific focus on the SADC group of nations. Foreign direct investment has an important role to play in the African development story. That said, we need to promote our own industries and enterprises and those of our fellow Africans.
Foreign direct investment needs to be properly monitored and regulated. Greenfield foreign direct investments, where new operations are set up rather than existing ones taken over, are most important. In the past, most of the benefits derived from foreign direct investment flowed to offshore shareholders. This needs to change.
Foreign direct investment in Africa decreased from R87,6 billion in 2008 to R50,1 billion in 2010, mainly due to the global recession. In South Africa, foreign direct investment came down from R5,7 billion in 2009 to R1,3 billion in 2010. However, South Africa seems to have been disproportionately negatively affected compared to other African nations. Nigeria received R11 billion in foreign direct investment in 2009, and the Uganda Investment Authority reported 323 investment projects in 2010, creating 149 000 new jobs. Minister, are we being left behind?
Aunde Cartrim is an international company with 80 branches worldwide. They currently operate in KwaZulu-Natal and supply the auto industry. Aunde employs 1 700 individuals in their leather goods supply industry. Three hundred employees have already been retrenched and the company is in the final stages of leaving South Africa and relocating to Turkey and Poland.
Three strikes in one year - Transnet, the leather tannery industry and an internal strike - have contributed to the company's decision to leave South Africa. The automotive and leather trim industries are intertwined. This will have a snowball effect and many more than the remaining 1 400 people will lose their jobs. We need to realise that in a modern economic society we need to be competitive on a global scale. If our policies and labour laws do not support economic growth and global competitiveness, we will lose our current investors and, therefore, jobs, and that will discourage potential new investors.
The reinforcing steel industry is in dire straits. The Cisco - Cape Town Iron and Steel Works - steel mill in Cape Town has closed down. ArcelorMittal South Africa has closed down its Newcastle furnace. These are just two examples of entities operating in the steel industry that have closed down. The building industry needs reinforcing steel, and now reinforcing steel is chronically in short supply in an already depressed construction market. Strategic planning and evaluation is obviously lacking.
The Department of Trade and Industry's total budget allocation for the 2011- 12 financial year is R6,8 billion in nominal terms. In real terms, this is an increase of 4,6%. Taking away the effect of inflation, the department has 4,6% more money to deliver on its mandate. This mandate includes job creation. The department's job creation initiatives will be guided by the New Growth Path through the Industrial Policy Action Plan, Ipap 2. However, Trade and Investment South Africa's budget has declined by 16,9% in real terms. Trade and Investment South Africa has an important role to play in foreign direct investment, which is important for our domestic economic growth.
Cope notes Ipap 2's ambitious targets for reducing unemployment by 5% over the next decade. Cope also welcomes the new programmes which include boat building, and oil and gas exploration. This will assist in diversifying the South African economy.
Cope is concerned, however, because of the increased state involvement in the economy. We are witnessing the poor performance of state-owned entities and we have no reason to think it will be any different this time around. Cope strongly supports the small, medium and micro enterprises as the main drivers of job creation. South Africa has recently been included in the new grouping of Bric nations - Brazil, Russia, India and China. This provides an exciting possibility for us. South Africa provides a gateway to the rest of Africa, and the other nations know this. South Africa needs to ensure that we get our fair share of the opportunity pie afforded us.
We do need to do more to promote emerging farmers. Black economic empowerment targets for agriculture set by the Department of Trade and Industry through agri-BEE have failed. The 30% target set for the procurement of produce from previously disadvantaged farmers has not materialised. Most black farmers do not even know of agri-BEE. They are struggling. Government and commercial farmers urgently need to assist with the integration of black farmers into the agricultural food security sector.
Cope understands that the DTI is proposing amendments to the BEE codes, specifically codes 600 and 700. The first amendment will impact on enterprise development. The amendment, we believe, could possibly open the room for fronting and manipulation of companies. The fact that the amendment looks at the whole amount spent during the year, rather than at the average annual value, is a problem.
Cope supports the DTI's Ipap 2 document that lists ambitious plans to boost renewable energy and local manufacturing of green technologies. Support and co-ordination of policies and programmes across departments, state entities and agencies are crucial. The DTI will attest to this fact. This has been the Achilles heel of past government initiatives. South Africa cannot afford any more delays, as we will not meet our renewable energy targets. I thank you. [Applause.]