Policies

South Africa 'all clear for take-off'

Clive Ndou

7 March 2005

Ten of the world's most powerful businessmen have told President Thabo Mbeki that South Africa is better placed than ever before to take economic growth and job creation onto a higher plane.

According to Business Day, the government has given itself until 2014 to achieve 6% annual growth in gross domestic product - the key level for tackling unemployment. Mbeki's International Investment Council, however, believes this target could be reached much sooner.

Govt, business leaders talk investment
SA's potential as a site for international business outsourcing, particularly for job-creating call centres, was a key element of the latest round of discussions between government and business.
The panel, comprising leaders of some of the world's biggest multinational companies, met with Mbeki and Cabinet ministers in Cape Town on the weekend for the eighth time since the council's inception. Its role is to advise Mbeki on economic issues, particularly on how to increase foreign direct investment in the country.

According to Business Day, the CEOs urged Mbeki's delegation to take a bolder macro-economic approach, building on the country's strong balance sheet to borrow more, tackle skills shortages and labour market constraints, and accelerate infrastructure investment.

Addressing the media after the two-day meeting, Reuters chairman Niall Fitzgerald said the international community "has shown strong confidence in the local balance sheet as well as the local currency. This in turn gives the government space to consider more options on how this could be used to accelerate economic growth to ensure that the aspirations of the people of South Africa are fully met.

"South Africa has to now use its strong balance sheet to further grow its economy", Fitzgerald said.

Mbeki told journalists that this strong balance sheet "gives us the possibility to change the rate of growth in a more significant way ... We have the basis to perform better, and now have to be bolder in our aspirations."

The panel advised Mbeki and his Cabinet to scrap all foreign exchange controls, relax labour market laws in order to create jobs, and import skills where the country lacks them.

DaimlerChrysler chairman Jürgen Schrempp said South Africa had to promote black economic empowerment as a a business opportunity rather than an obstacle.

"There is a consensus on the fact that black economic empowerment in South Africa is absolutely required, from a historical, economical and political point of view", Schrempp said. "All that needs to be done is for the South African government to produce a document on this so that everybody can understand its relevance.

"In that way black economic empowerment will not be construed as an obstacle but rather as an opportunity."

Other panel members who attended the latest meeting were Tata Sons chairman Rattan Tata, Commerzbank's Martin Kolhaussen, Astra Zeneca's Perce Barnevik, Mitsubishi's Masaki Miyaji, AngloGold Ashanti's Sam Jonah, Independent Newspapers chairman Anthony O'Reilly, Mittal Steel's Lakshmi Mittal, and Compahia Vale do Rio CEO Roger Agnelli.

SouthAfrica.info reporter