As most of what is said in parliament goes unreported in the daily media, M&G have offered MPs this slot to raise the issues that concern them. ANC MP Billy Nair kicks off with a call for business to play a greater part in social development. This is an edited version of a speech in the National Assembly on June 22.
Government debt represents a colossal burden which is hamstringing economic growth and social development.
If we had a growth rate of 5 to 10 percent, we would have been able to settle this debt in a year or two. But this kind of growth is not taking place. This debt was incurred during the days of “total onslaught” and “total strategy”, which meant massive borrowings for war in South Africa and against our neighbours. The banks were only too happy to feed this every-hungry strategy, but this meant a serious drain on our resources.
We must appeal to the banking sector to give serious consideration to at least waiving the burden of interest on our debt. They will thus be helping create conditions for development.
In the past year there has been a steady increase in the import of equipment and a build-up of inventories, but this has not translated into major growth. The projections for this year are that growth will be less than 3 percent. Mines in the Free State are threatening to close. Gold and other mineral production has dropped dramatically. Mineral exports account for only 8 percent of the GDP, yet we are one of the world’s largest mineral producers.
Recently, steel exporters found the home market more lucrative. Instead of capturing foreign markets and establishing ourselves there, earning foreign exchange in the process, business bows to its first principle — profit maximisation — and hits the local consumer
This is borne out by the following figures. Tiger Oats lifted earnings by 25 percent, or R227,7-million, in six months, because of strong consumer demand; Investec lifted earnings by 84,4 percent; Nampak lifted earnings by 30 percent to R225,8-million in six months; CG Smith lifted earnings to R624,4-m in six months; Cookes Bros’ earnings rose 116 percent in a year; and Imperial Cold Storage Holdings lifted its earnings by 66 percent in six months.
It is also reported that over 17-million chicks are being put down in hatcheries each year. Similiarly, fruit, milk and other products are dumped or production is controlled with the sole object of maintaining high prices. Most of the above firms’ earnings belong to the food sector. Is it any wonder that food prices are constantly rising, thus pushing up the cost of living.
Some of my colleagues are going to protest that labour is making South Africa uncompetitive and unattractive to investors. They should remember that labour is far more expensive and that standards are very high in the developed countries, hence the attractiveness of the south to the would-be investor. Labour is comparatively cheap here.
If we look at the disparities in earnings and standards of living between white and black labour, we can appreciate the pressure from black workers to overcome these disparities. In other words, they are trying to “catch up” with whites.
Business has a major responsibility for changing the economic climate and making South African the haven it should be. Likewise labour, the community, the government, the NGOs and others are co-responsible for socio-economic upliftment. There is urgent need for a summit on social development along the lines of the World Summit recently held in Copenhagen.