Rob Davies talks South Africa and the NDP

By on May 11, 2015

By Ryland Fisher

Trade and Industry Minister Rob Davies, who is at the heart of the transformation of South Africa’s economy, believes that it is important for South Africans to acknowledge their problems and that they have a plan – the National Development Plan (NDP) – to deal with them.

Davies said the NDP talked about the diversification of the South African economy and needed to be seen in conjunction with the Medium-Term Strategic Framework (MTSF), which guides the work of government in line with Vision 2030.

“The NDP and MTSF build on some of the existing work in government and, in our case, the Industrial Policy Action Plan. There’s a line of sight between the work that we are doing and where we need to end up.

“When we came to office in 1994 there was a major change in the world with the phenomenon called globalisation. There were new trade laws and liberalisation which undercut much of the very highly protected and inward-focused industrial economy that existed. We faced a very serious set of challenges.

“In the early years we adapted to that and we attempted to use trade liberalisation as a tool to support more competitiveness in industries and to carve out a bit more space for South African products in export markets.

“For some of the quarters in the period from 1994, there was growth of five percent but this was in a minority of the quarters. Where we are now is that we have to make structural changes. We cannot occupy that kind of place in the global division of labour. We have to move up the value chain.

“Countries that are successful, except for very small economies or ones with small populations or one with huge resources like oil, have all passed through a stage of value addition, including manufacturing. More than 60 percent of oil trade is now intermediate products.

“The worst place where you can be in the global division of labour is where we were historically. This is why we have to support reindustrialisation. Through industrial development, we can move up the value chain. Our trade policy stance is informed by that fundamental reality of industrial development.

“We are focusing on regional integration, not to prioritise institutional arrangements that deepen integration within existing communities but rather to broaden integration across the regional communities with the eventual destination of a continental free trade area but also recognising that tariff arrangements are not on their own going to crack it.”

For the full interview see Vision 2030, published July 2015 – please contact Fiona Wakelin at Topco Media for further enquiries.

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