House Chair, hon Minister Patel, hon Deputy Minister Mahlangu-Nkabinde, hon Members of Parliament, distinguished guests, ladies and gentlemen, the beauty and bounty of our magnificent country and its people are counterbalanced only by the ominous trinity of grinding poverty, gaping inequality and debilitating unemployment experienced by a growing legion of South Africans who seem to be trapped in these conditions.
The great gains we have made since our liberation in 1994 are constantly being challenged and even eroded by a rampant and unequal global political economy, escalating prices, a currency that is volatile in relation to others, skewed economic growth, and the collapse of service delivery in some areas in the country.
This is, however, not the time to be despondent and to allow these trends to describe the economic landscape of our country in perpetuity. The opportunities that abound, the potential that needs to be unlocked and the hope of our people enjoin all of us not to fail in our sacrosanct duty.
During the landmark Polokwane conference of the ANC in 2007, it was identified that the first weapon in our arsenal to restructure the economy and finally deal with unemployment decisively was to reshape the executive of the government. Out of this exercise, President Zuma announced the reconfiguration of Cabinet and the birth of the economic development ministry and department. As a stand-alone government department, it is the newest line function. It heralds the start of a new era in economic development in an effort to single out the decent work agenda as a defining factor in the mandate of the department.
Hon members, to establish a new department is no small and frivolous endeavour. The task at hand for this new department is gigantic indeed. Going forward, it has to be equal to the scale of the challenge in its response. To date we have seen an infant ministry and department that have been proactive, and their timely interventions during the recession attest to this. The fact that they were on the pulse quickly, playing a key role in formulating and implementing the framework of South Africa's response to the global economic crisis, further underscores this.
Hon Chairperson, allow me to congratulate Minister Patel, Deputy Minister Mahlangu-Nkabinde, director-general Prof Levin, the then advisor to the Minister, Mr Coleman, and their small team for submitting its first Medium- Term Strategic Plan. The strategic plan sets the tone for the performance of the department over the next three years, the nature of its operations and the resources required to fulfil its mandate. Moreover, from where we are sitting it will be the basis for the oversight of the legislature over the executive.
It should be welcomed that the Industrial Development Corporation, Khula Enterprise Finance and South African Micro-Finance Apex Fund, Samaf, will be at the disposal of the department as vehicles for economic development.
The most striking criticism of the strategic plan related to the notion of prescribed assets for retirement funds. As was noted by Ricardo Hansby in an article in the Business Day, which was supportive of the Minister, it is not as if prescribed assets do not entirely exist.
Ricardo aptly pointed out that the challenge for the department is to ensure that conditions and platforms are created to turn the many opportunities in the country into sustainable business ventures. That is where jobs are created. All our efforts need to be channelled in this direction.
Hon members, today is not an opportunity for unfairly lamenting the performance of a department barely out of the starting blocks. It is rather an opportunity to reflect on the challenges and risks this infant will face in its own development. With the benefit of hindsight, the department is in a unique and favourable position. It can learn from the experience of government over the past 15 years. It can avoid the trap of low or nonperformance, unnecessary bureaucracy and red tape, duplication, high staff turnover, indecision and rent-seeking. It is a rare opportunity to embrace excellence and efficiency as the cornerstones of its existence.
The most glaring risk in the Medium-Term Strategic Plan of the department is its all-embracing mandate. It is recognised that economic development is the responsibility of all departments. However, to initially expect such a small and new department to hold together the actions of all government departments on the economic development front, including the provinces and local authorities, has the potential to render the department ineffectual from the outset.
We recommend that the department should start from a manageable core and, over time, fan out as its systems, capacity and resources permit. It should focus on core areas of delivery and implementation. Policy coherence and co- ordination are simply not enough for a developing country.
Although we have arrested the economic downturn and stabilised the situation pertaining to the concomitant losses of jobs during the recession, we have not actually turned the corner yet and the scale of the task at hand remains daunting. To this end, an unbalanced focus borne out of a fixation on macroeconomic policy should be avoided. While macroeconomic concerns, such as the impact of the exchange rate on exports, remain important, the department should focus on restructuring the real economy by focusing on boosting output in the productive sectors.
The potential of the value chains in agriculture, mining, tourism and manufacturing remains largely untapped, and the department needs to demonstrate that it will develop new approaches to unlock actual opportunities and turn them into business ventures. Again, that is where jobs are created.
In an economy like ours, with its many structural problems, we cannot merely rely only on policy instruments. The hallmark of a developmental state is implementation, and we encourage the Minister to lead this department down this difficult path. This is what the President had in mind when he encouraged government to work faster, harder and smarter.
The cluster system has worked to the benefit of this department. It ensured support from related departments. However, to say in the strategic plan that the department will work "collegially" with other departments is also not sufficient. The department needs to demonstrate that it will actively and in a structured manner integrate its efforts with other departments in the economic and employment cluster. As a structure of oversight, the Portfolio Committee on Economic Development will continually work with fellow committees to ensure that outcomes are integrated, and we expect the same from the department.
It is laudable that the economic development and the DTI have worked together so well from the outset. We are concerned that the DTI will be expected to deliver on key policy outcomes while the agenda is perceived to be set by the economic development department. This is exactly the disjointedness we were trying to avoid when the executive was reconfigured in the first place.
This has the potential to lead to further confusion and operational inefficiency. Economic development and the DTI need to work together by all means but need to ensure that the outcomes are more optimal. The department is, therefore, encouraged to sharpen its focus and, over time, take full control of areas in its functional purview. This will lead to a seamless progression from policy to implementation.
Parliament is concerned about the slow pace of appointing capable and delivery-oriented public servants. Media reports shockingly suggest that on average it takes 18 months to fill public service posts. We are concerned, Minister Patel, that this will not be a defining characteristic of your department too. The strategic plan makes provision to appoint the department's staff complement of more than 200 over three years. While it is understood that this needs to be balanced with concerns over service delivery, surely the one cannot proceed without the other. We, therefore, encourage the department to redouble its efforts to appoint most of the key staff members over a shorter timeframe. I know it is there in the plans but we must make sure that it is fast-tracked.
Our government is replete with leading intellectuals. I want to put it to this august House today that the challenge is not one of policy as such. We have some of the best in the world. Our challenge remains one of implementation. So, even if we change the macroeconomic policy completely tomorrow, our afflictions will not disappear. Economic development requires political will, hard work, diligence, consistency and quick decision- making. It is asserted in the strategic plan itself that "economic development refers to more than the quantum of growth. It embraces the impact on the quality of life of South Africans".
The strategic plan, the Industrial Policy Action Plan 2, and other policy prescripts do not adequately address the "how" of developing this economy. Critical concerns remain about the institutional platform required, the nature of the partnerships the department intends establishing with the social partners, how programmes will be packaged to unlock the economic potential of the country, and so forth. In other words, we are saying that this includes its approach to economic management and the specific components of the economic management machinery, which will put together and lead the onslaught on unemployment, poverty and inequality.
The Portfolio Committee on Economic Development is aware that the strategic plan was not meant to address all our concerns. It is hoped that many of the gaps I have highlighted will be addressed in the eagerly anticipated new growth path that the Minister will table in June of this year.
In the meantime, the committee will be vigorous in terms of its role in relation to the department. It will be vigorous in scrutinising the details, but it will do so in a way that adds value to what the department has set out to do. I am sure I speak on behalf of all the members of the committee when I say the department can rely on our active support. To this end, the committee has tabled its report on Budget Vote No 27: Economic Development, with its recommendations. We recommend that the Budget Vote be supported.
Let me thank the Minister, as the leader of the department, and the Deputy Minister for the work done so far and for their continuous co-operation with the committee. I would also like to thank the members of the committee for their attendance and participation. I thank you. [Time expired.] [Applause.]