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Summit Summary 2009
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Topic: What prevents KwaZulu-Natal from becoming the premier investment destination in the country?
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SA GDP grew a factor of 5 and exports by a factor of 10 between 1994-2008. SA is receiving the largest number of FDI projects in Africa, but not by the value or quality of jobs. SA is competitive on many indicators, has strong clusters but overlooks expansion as a source of growth and is uncoordinated in dealing with investors. The DTI proposes a One Stop Shop concept – to systematically manage the Investment Promotion and facilitation lifecycle.
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KZN needs to focus on its competitive advantage which is logistics and the role to play in connecting the East and Africa. Impediments such as bureaucracy and crime require addressing. Radical ‘constraint reducing strategies’ such as extending the IDZ concept along corridors should be considered.
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South Africa has a responsibility to ensure competitiveness and reduce regulatory burdens. Entrepreneurs are the key to unlock opportunities. A clear choice for Govt is to increase welfare numbers or increase infrastructure – RMC a third way, increase the number of entrepreneurs
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Goals through PGDS provincial growth and development strategy are to accelerate and share growth and to halve unemployment and poverty by 2014. 3 million KZN people will urbanize over 5-7 years into 7 municipalities. KZNLGTA’s corridor development strategy matches investment activity to areas of high potential and high need.
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- 1994-2008: GDP expanded by a factor of 5, exports by a factor of 10
- Institutional improvements – WTO member, sound strategy
- Lots of good news amidst the gloom – in top 26 industrialized nations, JSE within top 20 Stocks Exchanges etc.
- 3 100 FDI projects in Africa between January 03 – July 09, peaked in 2008, marked slowdown in 2009.
- Source markets: 70% from 15 countries, mainly USA, France, UK, UAE…
- SA the largest recipient (# projects) but decreasing from 18% in 2003 – 15% in 2009, Nigeria leads on CAPEX, Morocco in quality jobs
- Manufacturing and services are leading FDI sectors
- SA is highly competitive with Eastern European and African competitors for FDI on many indicators (i.e. labour, sector strength, general doing business costs, investments, R&D, ICT)
- Strong Industry Clusters
- Policy coherence and IP Framework
- Expansions overlooked as source of Investment
- “The investor dream shopping list” and co-ordination thereof
- Rather reduce the cost of doing business (currently 34th)
- One Stop Shop concept – systematically manage the IP lifecycle
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- KZN is not homogenous as regards Investment climate
- Durban more than 50% of KZN economy
- Expected demand dictates investment
- Crime
- Low expectations of Govt
- Places like Riverhorse solve Govt’s delivery issues/bureaucracy
- Gauteng : Economies vs diseconomies of agglomeration
- KZN/Dbn considered but big factor = time/official impediments
- DTP a noted comparative advantage
- Agencies – DIPA’s role
- P.O.D. of Durban/KZN
- Logistics
- Port – but expensive
- Now addition of KSIA air
- Mr Price story – Real winner - connecting Africa to the East through logistics
- Build on strengths and POD, get unnecessary constraints out of the way
- Expand the RBIDZ along Provincial corridors?
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- Local entrepreneurs and business the starting point – need to give space to develop
- 13.4m on welfare (increasing by 2m in few years)
- 5.3m tax payers
- Responsibility to ensure competitiveness
- SA regulatory environment a hindrance
- Option of increasing welfare numbers or increasing infrastructure
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- SA and KZN challenges: poverty and inequality, unemployment
- Goals through PGDS – accelerated and shared growth, halve unemployment and poverty by 2014
- 3m KZN people will urbanise over 5-7 years into 7 municipalities
- How can this pattern be influenced?
- Good at planning, not as good at doing
- Requirements:
- Logistics and transport sector
- Energy and water
- Sound governance
- Sustained and inclusive growth
- Invest in productive infrastructure
- Invest in redistributive infrastructure
- Focus on high need and potential areas, channel development in activity corridors and nodes.
Agriculture
Industry
Tourism - Coordinate Govt. spend along corridors
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Including… - Question: Support Airport Cluster Concept ? – DTI/TIKZN to action
- Statement: ‘6 hours a day concept’
- Statement: Co-ordination between Govt and Business issue
- Question: KZN demand and supply matching issues
- Answer: SA poverty is an income poverty not necessarily an asset poverty
- Question: How will monitoring and implementation work? Gap between KZN Govt and municipalities.
- Statement: New Planning and Development Act to be in place by April 2010.
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- Experience of trade barriers. Even trading partners can put up trading barriers but we do not run into their barriers and these need to be addressed.
- Exports are still on primary products. Need to diversify into high tech products.
- Continued collaboration between government and the business sector is needed and wanted: around planning, show casing products overseas, financing of show casing products through the DTI.
- Good incentives and programmes in place but may not be communicated well to beneficiaries. So access to information is a problem, it’s a question of conveying information.
- Why export raw materials when we should have our own production hubs here.
- Questions around big companies helping smaller businesses around them mentoring
- Much interest in how smaller businesses would fare going forward/ do not want to be left behind by investment and export strategies. Looking to bigger business.
- Implementation of plans is more helpful/important than coming up with new ideas.
- Government image: the way we handle business/ attractiveness or otherwise to overseas business partners, corruption and fairness.
- Taxes are very heavy and this directs productivity.
- Martin Challenor (RMC Personal reflections): People in all sectors want to play a role
- Strategy: what we must do now so as to be in business in five years time.
- Coordination: where there is coordination between government and business, the sector does better than where there is no coordination.
Want coordination between government departments. At the same time government is talking about alignment and addressing bottlenecks. I did not detect hesitation on these points. - Great record keeping. Access to the records and data is no longer and not a problem what is at issue is finding points of sense, guidance, interpretation, going forward.
- Interest in who will write up the strategy documents, provided to all sectors for feed back and meaningful revisions. The investment and export strategies will be cast into legislation that will go before the provincial parliament next year.
- Helping people who want to secure overseas markets, which region should be accessed as a source of products. Which region would enhance foreign direct investment?
- Business people want leadership from government on what business wants government to do: to coordinate between government departments, open doors with other governments, open up doors with world bodies
- Business will do what it can do: sustain existing business, find new markets, with the hope that serving the markets will lead to a new jobs and more wages being paid.
- Needs to be more talking: this summit held at provincial level but what is needed also is similar talk at local council level.
- There will never be a point at which we could arrive and say we are there. Creating the future will always be on going work, working of the day.
- Great enthusiasm for the economic well being of the province, built around this most difficult human activity to conceptualise, enforce and create - entrepreneurship.
- People want to be involved
- People want to make a contribution.
- Looking to TIKZN to make it possible for people here to play their part and enhance the level of interaction.
- Investment climate survey with the World Bank will be approaching companies with questionnaires. Of course please help
- People fear they have a disjoined, not well linked desire to work for economic prosperity and hence the economic well being of the province.
- Now need TIKZN to bring to bring out and reveal that what could be seen as a disjointed intention towards economic prosperity can actually be expressed as a shared, powerful unstoppable economic driving force.
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