Trade and Industry Budget Vote Speech 2006 by Avril Harding
2006-03-29. Madam Speaker, the Department of Trade and Industry set itself the goals of “raising investment levels, broadening economic participation and increasing competitiveness”. Almost needless to say these are very important goals to make the implementation of ASGISA as effective as envisioned. Be assured that the Independent Democrats certainly supports the ASGISA initiative that aims to half poverty and unemployment by 2014, as well as strengthening the Informal Economy.
South Africa today has a good growth
story, the current account deficit isn't large by global standards
(4.5% of GDP) our fiscal surplus is rising.
Our foreign reserves of over $22bn our now double our $11.bn short term foreign currency debt due within one year. The rule of thumb used to be that reserves should at least equal such short term debt to guard against a foreign exchange crisis. Larry Summers in a recent speech argued that central banks of developing countries may want to apply a more conservative two times cover. We now fall squarely inside the Summers argument.
Economic growth coincides with appropriate infrastructure. The past few months have proven that our current infrastructure is indeed not adequate to support the growth we have been experiencing and that we anticipate for the future. Our rail commuter service is substandard and trains are so overcrowded during peak hours, to the point where people literally hang out of the doors – that is, if the trains actually show up in time.
Our SMME-sector has suffered great financial losses due to electricity failures throughout the Western Cape, never mind the grave inconvenience suffered by residents of the province. These two major areas have serious repercussions for both current and future investment in our country, not only foreign but also domestic investment.
The ID wants to stress the importance of international trade and investment, particularly with China. Although such bilateral agreements are beneficial, the department must take precaution to not sacrifice the jobs of thousands of people in our textile industry. A report last year found that SA exports relatively low-value, capital-intensive products to China that face fairly low tariff barriers and that SA imports relatively highly protected, higher-value, labour intensive products. However, a trade analysis which identifies commodities with high export potential in China’s markets, found positive exporting prospects for SA. The challenge is to maximise the potential gains from and reduce the costs of trade through perhaps a preferential trade agreement.
The ID supports the R372 million of ASGISA for infrastructure development but must warn about aligning the targets against capacity building plans as outlined by the State President in his 2006 State of the Nation Address.
The ID supports this budget vote.
Issued by the ID Media Office
Steven Otter – 084 233 3811
Our foreign reserves of over $22bn our now double our $11.bn short term foreign currency debt due within one year. The rule of thumb used to be that reserves should at least equal such short term debt to guard against a foreign exchange crisis. Larry Summers in a recent speech argued that central banks of developing countries may want to apply a more conservative two times cover. We now fall squarely inside the Summers argument.
Economic growth coincides with appropriate infrastructure. The past few months have proven that our current infrastructure is indeed not adequate to support the growth we have been experiencing and that we anticipate for the future. Our rail commuter service is substandard and trains are so overcrowded during peak hours, to the point where people literally hang out of the doors – that is, if the trains actually show up in time.
Our SMME-sector has suffered great financial losses due to electricity failures throughout the Western Cape, never mind the grave inconvenience suffered by residents of the province. These two major areas have serious repercussions for both current and future investment in our country, not only foreign but also domestic investment.
The ID wants to stress the importance of international trade and investment, particularly with China. Although such bilateral agreements are beneficial, the department must take precaution to not sacrifice the jobs of thousands of people in our textile industry. A report last year found that SA exports relatively low-value, capital-intensive products to China that face fairly low tariff barriers and that SA imports relatively highly protected, higher-value, labour intensive products. However, a trade analysis which identifies commodities with high export potential in China’s markets, found positive exporting prospects for SA. The challenge is to maximise the potential gains from and reduce the costs of trade through perhaps a preferential trade agreement.
The ID supports the R372 million of ASGISA for infrastructure development but must warn about aligning the targets against capacity building plans as outlined by the State President in his 2006 State of the Nation Address.
The ID supports this budget vote.
Issued by the ID Media Office
Steven Otter – 084 233 3811
