by Danielle Petterson
The trust deficit that often exists between government and the private sector, especially the manufacturing sector, must be overcome. This is according to the Deputy Director General of the Department of Trade and Industry (DTI) Garth Strachan. Speaking at the launch of a new air separation unit in Vanderbijl Park, Strachan explained that successful industrialising countries have been characterised by a very strong mutually beneficial relationship between government and private sector. For the DTI, overcoming the trust would include building its capacities to work much more closely with the private sector to undertake in-depth research and information gathering to ensure that the right regulatory policy mix is in place and isn’t a barrier, as well as ensuring that opportunities are made available to the private sector. “Flowing from the National Industrial Policy Framework adopted by cabinet in 2007, successive iterations of the industrial policy action plan have set out governments plans to support industrialisation, to prevent deindustrialisation – one of whose characteristics we have begun to see in our economy – and to ensure that government works very closely with the private sector as a process we describe as steering but not rowing,” said Strachan. He explained that the incoming administration has already signalled that much more has to be done to overcome the constraints of, amongst others, infrastructure and regulation, and to grow the enormous opportunities that exist for the industrial economy.
“Government as a whole applies a range of industrial policy support measures which include multi-billion rand incentives. Increasingly, as we indicated in the 2014 industrial policy action plan, these support measures have to be deployed with a stronger focus on dynamic companies and reciprocal conditionalities to raise our productivity, competitiveness, export capabilities, energy efficiency, carbon mitigation,” he said.
Clean production “In the long term, carbon mitigation strategies and energy efficiency will become a global competitive advantage.” The DTI supports energy efficiency and carbon mitigation measures, but Strachan said the department will do its very best to ensure that the roll-out of carbon tax measures are calibrated in such a way as they are not an additional shock, especially to the manufacturing sector. Notwithstanding the difficulties and constraints that face the economy, Strachan believes there are very significant opportunities down the road. These include, the enormous opportunity on the African continent, driven by the fact that in the not too distant future there will exist a free trade area and consumer market which involves 700 million people, and demand driven by massive resource exploitation on the continent. Secondly, and amongst other opportunities, the Industrial Policy Action Plan 2014 points to the fact that the country has to have a plan for the medium term prospect of gas. “Massive existing deposits of natural gas of the Rovuma basin in Mozambique, indicative and very positive signs of significant offshore deposits on the KZN coast and very large indicative deposits of shale gas mean that we have to do longer term planning and get the policy mix of infrastructure investment right in order to ensure that we create and strengthen the significant up and down steam benefits in liquids, chemicals and fuel value chains,” said Starchan.
