Chairperson, hon Minister, hon Deputy Minister and the House, Cope accepts that there must be proper co-ordination to make the economy grow. As a nation, we are depending on economic development to help us in transforming the economy so that key components of our economy, namely decent work and agrarian reform, can be transformed to ultimately ensure food security, universal and affordable education, a national healthcare system and a comprehensive plan to fight crime and corruption, and to ensure that we deliver and achieve clean governance.
We therefore agree with the need for proper co-ordination across all spheres of government. We also take cognisance of the commitment of the Minister, the Deputy Minister and the team at the Department of Economic Development, EDD, to achieving this goal.
However, we would like to sound a word of caution, drawing on the lessons and history of the Redeployment Development Programme, RDP. The four fundamental and key pillars on which the RDP rested were meeting basic economic needs, developing human resources, building the economy and democratising the state and society at large. Because the RDP department tread on many toes and did not have its own line functions, it was rendered futile and had to be shut down. We sincerely hope that this will not be the case again. If this were to happen, it would set back our economic development and would have wasted valuable resources.
Therefore, for the department to be respected as a delivery mechanism in our country, it would do good to develop its own profile and its own niche.
For Cope, the central issue of co-ordinated planning is the elimination of poverty through job creation and ensuring that we are dealing with unemployment through the development of entrepreneurship. However, in regard to the budgetary allocation, we believe the amount allocated to entrepreneurship, the second economy, is completely inadequate. This was noted by the portfolio committee.
If we are to deal with the scourge of unemployment that is facing us, we need to focus on the second economy so that its potential can be unlocked. We know that a large number of people in our country derive their livelihood in this segment of the economy. Therefore, we need to invest a lot in the second economy.
For 16 years, the greatest challenge to our state has been that of defeating poverty and creating decent jobs on a massive scale. Without a concentrated drive on teaching and stimulating entrepreneurship across all strata of society, no success can be achieved. For us in Cope, developing entrepreneurship is key in addressing income, wealth inequality and the serious challenges of unemployment and rural underdevelopment.
Fundamental to this drive is access to finance and speeding up delivery. For entrepreneurship to flourish, it is important that finance be made available. The Industrial Development Corporation, IDC, Khula and the South African Micro-finance Apex Fund, Samaf, all need to be adequately capitalised. We were excited by the elaboration given to this House earlier on the amount that will be injected into these institutions.
Furthermore, we need to draw lessons from the Brazilian model: it is important that the cost of borrowing for emerging businesses is reduced. For our people to be self-sufficient in the economy, they need to borrow at a relatively low cost. Cope is of the view that legislation must be introduced to make it possible for Khula to lend directly to the entrepreneur cheaper than commercial banks. It is clear that we have the infrastructure, like post banks and post offices. Therefore, it is important that we take this decision swiftly.
Cope agrees that the EDD will have to monitor closely how these development finance institutions, DFIs, perform with regard to economic development in our country. However, it means the department would have to have the capacity to do this. At the present moment, we are not sure whether the department will have that kind of capacity.
A very important component of our economy is the Competition Commission, which the Minister referred to. It has achieved a number of victories yet it is incapacitated. It is not used as the very important tool it can be to transform our economy.
Minister, while the growth path is still under discussion and has not been submitted to Cabinet yet, we believe that the point of focus should be the elimination of poverty, nothing else. You gave examples of the communities you visited and they make it clear that our people are living in grinding poverty. Therefore, our growth path must actually focus on the elimination of poverty and unemployment.
Meanwhile, Cope fully endorses the portfolio committee's request that EDD produce quarterly progress reports in respect of the Economic Development Index, IDI. Likewise, the committee is correct in asking for the establishment of a database on the real economy by the fourth quarter. The work of monitoring will require accurate information and statistics to be produced. There should be no sucking of information from the fingers.
The issue of the protection of intellectual property is very important to Cope. There are lessons to be learnt from countries like India, Taiwan and South Korea, because South Africa is number one in our continent with regard to creativity and innovation. Thank you. [Time expired.]