Presentation Transcript

1. Our future - make it work NATIONAL DEVELOPMENT PLAN 2030 StandardbankRoadshowFebruary 2013
2. Outline The NDP Labour question An inclusive rural economy Land reform Presentation to South African Clothing Textile Workers Union
3. National Planning Commission Background 2010 Apr President Zuma appoints the Commission Jun Diagnostic Report published Nov Draft National Development Plan released Public consultation Aug Handover to President and Nation Sep Cabinet adopts the Plan Dec ANC Conference adopts the Plan Focus on implementation 2011 2011/12 2012 2013 onwards
4. The National Development Plan is: Shaped by vision of the Freedom Charter & Constitution A plan for the whole nation A product of wide consultation Endorsed by all major political parties
5. Broad Goals of the Plan - Build a united country - Resolve historical injustices - Uplift the quality of life of all South Africans - Accelerate social and economic change - Eradicate poverty and unemployment and Reduce inequality - Expand the economy and distribute its benefits equitably
6. Objectives and Targets of the Plan Eliminate poverty and reduce inequality - Reduce unemployment Key Targets for 2030 - Improve quality of education - Provide quality public services (water, sanitation, electricity, etc.) - Inclusive rural economy - Better built environment - Critical infrastructure - Effective & affordable public transport
7. Improve public services Example: Produce sufficient energy at competitive prices Make high-speed broadband internet available & affordable Expand food production, including by small-scale farmers Entrench a comprehensive social security system Provide quality health care, promote health &well-being
8. Diagnostic of the SA Economy Under apartheid, the economy was oligopolistic: strong mining sector and sophisticated financial services sector Ownership and control patterns largely unchanged & contribute to high levels of poverty and inequality Low skill jobs have declined & high skill jobs grew significantly Loss of low skill jobs has raised inequality Too few skills to compete with advanced economies & high cost structure to compete with developing countries Our weak economic performance is largely attributed to poor export performance since the early 1980s Presentation to South African Clothing Textile Workers Union
9. A focus on the labour market Presentation to South African Clothing Textile Workers Union
10. Explaining the slow progress on jobs Harder to do Greater impact
11. Proposed measures to create jobs Promote manufacturing in areas of competitive advantage Grow agricultural output and focus on agro-processing Improve the functioning of the labour market to make it easier for young work seekers to get jobs Better coordination and implementation of economic policies Partnerships with business to increase investment in labour intensive areas Lower the cost of living and of doing business Undertake small business reforms Presentation to South African Clothing Textile Workers Union
12. Labour market reforms Active labour market proposals Transport vouchers for school leavers Provide incentives for placement agencies to recruit, prepare and place matriculants Wage subsidy to lower risk of firms taking on new work seekers Labour reforms Increase resources to the CCMA and the labour court Introduce simpler dispensations for small businesses Use probation as intended in the LRA Ease procedures around dismissal for misconduct and indiscipline Presentation to South African Clothing Textile Workers Union
13. A perspective on labour unrest and the minimum wage Migrant labour dilemma Service delivery protests Marikana De Doorns Cost of living Debt and conspicuous consumption ‘The grapes of wrath’ Presentation to South African Clothing Textile Workers Union
14. The consequences R105 pd is the threshold Lay-offs and mechanisation Unionisation drive Productivity push Competitiveness Winners and losers Trade policy A new deal? Presentation to South African Clothing Textile Workers Union
15. Economic transformation
16. How to transform the economy Economic transformation has two parts: Reduce poverty and inequality through rising employment and incomes Transform ownership and control patterns to reflect demographic trend How to address both parts? Better education, training, work experience, career mobility and savings will enable both Affirmative action in general achieves both A fast growing, dynamic economy that is diversifying will achieve both Tensions in making progress on both legs: BEE deals often tie up capital without increasing investment It raises the cost of capital for firms, raising costs for the economy It sometimes leads to short-termism in business decisions
17. Existing economic transformation instruments Present instruments Government licensing (mining, telecoms, energy, radio etc) Government procurement Land reform BEE scorecards DFI finance Broaden and make instruments more effective Effective SMME programmes Promote economic activity in townships Boost small farmers’ access to markets Promote enterprise development Presentation to South African Clothing Textile Workers Union
18. Social transformation and a decent standard of living Presentation to South African Clothing Textile Workers Union
19. Elements of a Decent Standard of Living Nutrition Clean environment Housing, water, sanitation, electricity Adecent standard of living Recreation and leisure Transport Education and skills Employment Health care Safety and security
20. Programme to Deliver the Decent Standard of Living Mobilise the nation & forge a social compact to attain the nation’s objectives Popular citizen participation in the process of development Develop capabilities of people and country Build state capacity & strategic coherence to implement policies Strategic, decisive and ethical leadership throughout society
21. Storylines of a premise Visionary Industrial Policy (Ha-Joon Chang) :Doesn’t matter if the cat is black or white, if it catches mice it’s a good cat” (Deng Xiaoping) 3 kids and a flute (AmartyaSen)
22. The Case for Agriculture Economic growth premised on agric and manufacturing (Linsey Whitfield) Labour intensive exports Hecksher-Ohlin Theory, Sameulson Urbanisation does not advance productivity (Chang & Lin) Two sectors (capitalist, non capitalist) Arthur Lewis. Tech change drives trade specialisation. Paul Krugman Opportunity of technical innovation from advanced commercial agriculture. Growth in cities depend on rural markets and rural growth depend on urban markets. Subsidisingagric is a political response to the unequal benefits of economic development Rich nations: positive capital flows to agric; Poor nations: Neg capital flows Labour absorption capacity Influences human settlement patterns Africa expansion potential Sustains rural areas Can address the homeland question Multifunctionality

23. An Inclusive Rural Economy

24. Broad proposals Job creation (11m jobs) Regional growth Solve Land reform Water & conservation Advance the Green economy Improve labour markets Spatial inequities Uneven public service
25. An inclusive rural economy-proposals- Expand irrigation Develop communal areas Jobs upstream & downstream Linking smaller farmers to markets Tenure security in communal areas Umzimvubu valley and Makathini flats Invest in Adaptive research Improve and expand training
26. Vision The vision consists of at least five elements: better integration of the country’s rural areas, driven by successful land reform integrated with successful employment creation AND successful poverty alleviation measures AND strong safeguards for the environment The driving force is the expansion of irrigation agriculture supplemented by the expansion of dryland production, and starting with current smallholder farmers with market access
27. The identification of “winners” Three approaches to identify industries that can contribute to significant growth in employment: Large export industries with high labour requirements High volume imports that can be substituted with locally produced goods Growing small industries with high labour requirements
28. The employment creation matrix
29. Summary
30. Food security In most years, South Africa is food secure at the national level, and has been so for a number of decades
31. Food Security Maintain positive trade balance Regional strategies Public works programmes Nutritional education Farming-nutrition link Product development
32. THE ROLE OF AGRICULTURE IN THE RECONSTRUCTION OF SA Land question Employment Human capabilities Research & Development The homelands Food security Trade Productivity Regional development Sustainability
33. NPC Proposals Inspired by the Green paper (proactive acquisitions, LMC) Focus on people, not land (incubation) Intended to remove uncertainty and get closure Purpose to integrate support measures Make the 30% target Reduce failure rate Build investor confidence Reward commercial farmers who contribute Remove land price speculation Avoid land market distortion

34. The LAND Question

35. A PRAGMATIC LAND REFORM SCHEME First, each district municipality where there is commercial farming land in South Africa should convene a committee (the District Lands Committee) with all agricultural landowners in the district as well as key stakeholders such as the private sector (the commercial banks, agribusiness) the government (Departments of Rural Development and Land Reform, the Provincial Department of Agriculture, Water Affairs where relevant, etc.), and government agencies (Land Bank, ARC, etc.) This Committee will be responsible for identifying 20% of the commercial agricultural land in the district, and then for giving the current commercial farmers the option of assisting in the transfer of this 20% of agricultural land to black farmers. They go about this in the following manner: To identify land they would first look around their district for land that is readily available from any of the following categories: land that is already in the market; land where the farmer is known to be under severe financial pressure, land held by an absentee landlord willing to exit, in an estate, etc. In this manner 20% of the land could comfortably be found without distorting markets. Upon identification, the land is obtained by the state at 50% of market value (which is closer to its fair productive value). The 50% shortfall of the current owner is then made up by cash or in-kind contributions from the commercial farmers in the district who volunteer to participate. In exchange, they are absolved from losing their land in future and they gain BEE status. This should remove the scourge of uncertainty and mistrust that surrounds land reform and the related loss of investor confidence. A stepped programme of financing would address most of the financing problems of land reform beneficiaries, gives the implementers of land reform the comfort that beneficiaries have the necessary skills for successful farming, and spreads the fiscal cost of the programme between future earnings of the farmer and the pockets of the taxpayer. This can be done for example by giving successful applicants a two or three years rent-free probation period and if they successfully demonstrate that they are capable of farming they then move to a long-term lease of say 40 years with the full commercial rental phased in over four years and a part of the rental fee applied to a sinking fund held at the Land Bank that eventually gives them full title to the land.
36. Land acquisition at 50% concern 50% state subsidy Other 50%= private contributions and/or development finance, targeted subsidies (CASP, etc) Private contributions: Landbank bonds, extension, mentoring, incubation, marketing, harvesting, collective buying, guarantees, schemes, financing, other concessions, education, Landbank 30-40yr mortgage Landbank bonds: 10yr guaranteed return for land reform BEE status for commercial farmers who contribute Willing sellers still get market price !
37. Presentation to South African Clothing Textile Workers Union