Don’t lose heart, says Davies

CityPress - - News - RA­PULE TA­BANE ra­pule.ta­bane@city­

Trade and In­dus­try Min­is­ter Rob Davies be­lieves South Africans should fo­cus on what works with the econ­omy rather than be­labour the prob­lems.

In an in­ter­view with City Press last week, Davies said: “We’ve got a choice. We have things we can build on, or we can beat our­selves to death and the head­winds will en­gulf us all.

“We do have chal­lenges, se­ri­ous chal­lenges, there is no ques­tion about it. But we can spend our time mak­ing ges­tures, dis­rupt­ing meet­ings or play­ing around, or we can come to­gether and try to build on the pos­i­tives, and I know that suc­cess­ful economies are the ones that do the se­cond.”

Echo­ing Pres­i­dent Ja­cob Zuma’s re­cent mes­sage about ex­ter­nal fac­tors that af­fect the econ­omy, Davies pointed to the de­pressed eco­nomic out­look world­wide and the re­ces­sions in Rus­sia and Brazil.

He said South Africa was hit by de­pressed com­mod­ity prices that have re­sulted in gold be­ing half the value it was a few years ago, and plat­inum and iron ore are only a quar­ter of what they used to be worth.

Davies said this was com­pounded by the worst drought south­ern Africa had ex­pe­ri­enced in decades, the full ef­fect of which would only be felt later in the year. “There is no magic wand that will make all those fac­tors dis­ap­pear. Th­ese are acute chal­lenges, but what we should not be do­ing is lament­ing those gen­eral ex­ter­nal pat­terns. We should be ad­dress­ing those things in­side our econ­omy that can help us bet­ter with­stand that.”

In­dus­tri­al­i­sa­tion and in­fra­struc­ture de­vel­op­ment re­mained the best stim­u­lus for growth, he said. Man­u­fac­tur­ing in the coun­try has also been neg­a­tively af­fected by the global glut of steel. But Davies was happy with how the cloth­ing and tex­tile in­dus­try had sta­bilised af­ter years of de­cline. He said re­tail­ers who al­ways im­ported cloth­ing were now ap­pre­ci­at­ing the value of lo­cal man­u­fac­tur­ers.

What also gave him hope was a new deal an­nounced by Mercedes-Benz, which would see it man­u­fac­tur­ing trucks in East Lon­don. An­other deal that in­volved food com­pany Nestlé and the chicory in­dus­try had led to the re­cov­ery of chicory pro­duc­tion in South Africa.

Davies said busi­ness had also agreed to work with govern­ment to avoid a credit down­grade. He added that by ad­just­ing its bud­get to take ac­count of new cir­cum­stances, the govern­ment had gained cred­i­bil­ity in­ter­na­tion­ally.

He said that even as the econ­omy was pro­jected to grow at less than 1% this year, “peo­ple must un­der­stand that less than 1% growth is still a pos­i­tive growth, but is still far off from the 5% we need and far short of the tar­gets in the Na­tional De­vel­op­ment Plan”.

Con­trary to many who be­lieved the Black In­dus­tri­al­ist Pro­gramme would al­low cronies to cash in, Davies said cri­te­ria to get into the pro­gramme were quite tight.

“It is very tightly de­fined. You have to be in­volved in man­u­fac­tur­ing and value-added ac­tiv­i­ties, and you have to be in a lead­ing po­si­tion in your com­pany.”

Rob Davies

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