Speeches were made by the Minister of Trade and Industry, Mr Alec Erwin, the Minister of Public Enterprises, Mr Jeff Radebe, and the Minister of Communications, Dr Ivy Matsepe-Casaburri. The Minister of Finance, Mr Trevor Manuel was not in attendance.
This is a synopsis report of the Minister’s responses to questions posed by the media. Not all questions are contained.
Questions and Answers: (Q) What is envisaged for South African companies to invest in other African countries?
Minister Erwin: There are no specific incentives, although some programs do exist such as the Credit Guarantee Program in DTI, and we are considering introducing an Export Credit Program that would make it attractive for businesses to start exporting their goods into other African countries. The growth in South African companies investing in neighboring countries is considerable. There have been extensive investments placed in Mozambique and Tanzania.
(Q) Is privatization happening?
Minister Radebe: We are definitely taking a look at state-owned options. If the private sector can provide better services to the people, then we are currently, then we will move towards privatizing services. Our main concern is ensuring the best possible service to South Africans. Included in privatization is the selling of state assets that are either not used, no longer needed or not functioning as fully as possible.
(Q) Is there a target on how much money will be raised over privatization in the next five years?
Minister Radebe: We do not have the exact figures, but it will be in the area of multi-billion rands per year. This will be addressed in the Budget.
(Q) Will there be job losses over privatization? and can you give us details of the debt-restructure?
Minister Radebe: It is inevitable that with privatization there will be job losses. We cannot give specific figures as to the number of jobs, but it will not be all at once. If assets are sold they will be sold entity by entity. We do not want to make abrupt moves that will lead to changes in the market. As far as debt-restructuring, in the next few weeks a timetable and schedule will be made available that will clearly outline what our plans are.
(Q) Are you now making mention of business proposals with Brazil and India as a way of threatening the European Union to come through for South Africa?
Minister Erwin: Absolutely not, we have had business initiatives with both Brazil and India long before the problems with the EU. At the World Trade Organization (WTO) in Seattle last year we had discussions with both countries about expanding business in SADC countries. India made a proposal in 1996, and meetings were held in 1997. We then took a delegation to India last year, so dialogues have been going on for some time. It is not a response or a threat to the EU. 40% of the trade that South Africa does is with the EU, but our most rapid trade is done with Brazil. We realize that the future of the world economy depends on increasing trade in developing countries. We need more stable and suitable partnerships with both Europe and SADC countries.
(Q) Is there a clear social plan?
Minister Redebe: There is a framework being developed by Nedlac, and we are calling for parastatals to work with the Department o f Labour to develop a social plan that helps those workers who are effected by the restructuring of these entities. The social plan will include such things as training programs, and focus on increasing the utilization of the workers.
(Q) Are there any plans to amend the Competition Act?
Minister Erwin: Our focus is on whether 3(d) of the act allows for concurrence. We have already started making amendments to the Act, especially around the Competition Tribunal. It became inevitable that the Government would have to get involved. We are currently circulating an internal discussion document stating our options and outline. When that is done, we will go to Cabinet, but the amendments are coming. What is needed is clarity.
(Q) With downsizing occurring, how do you expect to bring South Africa into the 21st Century?
Minister Matsepe-Casaburri: The most important step is to deal with reality. We are restructuring state assets because we can no longer carry out the full functions of these assets. We want to be able to deliver the best services to South Africans, so let those who can provide those services do it. To have massive fiscal exposure, and increase our financial burden, and go into more debt is a suicidal strategy. We need to mobilize for the maximum chance of success, and in order to accomplish this we are enabling the best mechanism run those functions so that the needs of the people are met.
Minister Radebe: We need to be at the forefront of work in this country. These actions are in the best interests of the country as a whole, and will enable us to design strategies to profit the working class. The restructuring of state assets is crucial to the survival of South Africa.
(Q) Can you give us details on selling your shares in Telkom? and What is the value of those shares?
Minister Matsepe-Casaburri: At this time, we have decided on which bidder is accepted. We are now being appraised of recommendations that have been made. I cannot say what the value of those shares are. There is a considerable amount of speculation, but I can say the value has gone up.
(Q) Regarding the Foreign Investment Council, Has this Government given up on domestic investments? Is the Government saying foreign investment is key to bringing jobs to South Africa?
Minister Erwin: Foreign investment accounts for 2,5% of the GDP. We had set a target of 3-4%, so we are not that far off, however, domestic investments account for 23% of the GDP. The world scale average on foreign investment is 6%, so we are no where close to having an excessive amount of foreign investment. What these figures illustrate is that foreign investment does not drive the economy of any country. Our domestic investments have always been above the growth rate. Domestic investments are our first priority, and foreign investment is secondary to that.