2005-11-28,+Phumzile+Mlambo-Ngcuka+Manifesto,+Sunday+Times


 * Sunday Times, Johannesburg, Business, Front Page, 27 November 2005**

= **Economy set for a shake up** =

BLACK economic empowerment and protective labour legislation, both pillars of post-apartheid transformation, are under review as part of Deputy President Phumzile Mlambo-Ngcuka’s programme to boost economic growth to 6% of gross domestic product by 2014.

In her first major interview since she succeeded Jacob Zuma in June, Mlambo-Ngcuka announced a range of initiatives to remove obstacles to growth.

She said her Accelerated and Shared Growth Initiative for South Africa (Asgisa) had identified currency volatility as a major impediment to investment, but that the government’s options were limited beyond building up foreign reserves.

“We are not likely to do anything that is a big bang — not even on exchange controls,” she said.

Mlambo-Ngcuka will present a detailed proposal to the Cabinet in January for an independent labour market review to determine the actual scale of the unemployment crisis and to assess the unintended consequences of labour legislation.

The government and the ruling party have been at odds over labour policy since a mid-year conference of the ANC shelved Deputy Finance Minister Jabu Moleketi’s proposal for increased flexibility to tackle unemployment, which is officially estimated at 26%.

Mlambo-Ngcuka said terms of reference for the review would be agreed in consultation with labour and business, and that an agency would be identified whose findings would be acceptable to everyone. She said the International Labour Organisation could be an option. “We’re going to do this thing together.”

Mlambo-Ngcuka said implementation of the government’s broad-based black economic empowerment policy also would be tested against the goal of accelerated growth.

“I don’t think there is any virtue in pure BEE if that equals poor service. We’re looking at that in the shared growth initiative and also in the second- economy initiative,” she said. But she defended the concentration of equity ownership in a few hands, charging that there appeared to be different rules for black and white entrepreneurs.

Mlambo-Ngcuka inherited responsibility for the so-called second economy from Zuma.

In July President Thabo Mbeki put her in charge of a new growth task team including the ministers of finance, trade and industry and public works, as well as the premiers of Gauteng and Eastern Cape.

The team presented an interim report to the Cabinet last month and Mbeki is set to announce key strategies arising out of the project in his State-of-the-Nation address on February 3.

Mlambo-Ngcuka said the Development Bank of Southern Africa and the Business Trust were helping the government to identify and recruit people with the skills needed to radically improve the quality of local government and to manage the country’s five-year R320-billion investment in infrastructure.

Government, business and labour would establish a secretariat hosted by the Business Trust to research the need and availability of specialist skills.

Eskom, the power utility with a R95-billion capital expenditure programme planned for the next five years, already had identified about 200 suitably qualified South Africans in Britain and the Middle East willing to return.

“That is what we are encouraging — look first for South Africans,” she said.

Mlambo-Ngcuka invited private sector operators to give her details of difficulties in employing people, at home and from abroad, promising to take them up with Cabinet colleagues.

She said Mbeki had postponed finalisation of a project launched last year to redesign the structure of government until the ASG initiative had defined the needs and challenges of development.

But the final review would be open-ended, she said, and could even address the number of provinces.

She said the government would announce measures soon to cut the cost and complexity of regulatory compliance, estimated to set companies back at least R100000 a year.

The range of obligations would be reduced, with the focus on the burdens identified by business as the major obstacles to entrepreneurship.

More than two years after Mbeki’s policy unit first identified tourism and business process outsourcing as sectors with significant potential for growth, the government was now ready to implement concrete measures to promote them, she said. She did not identify the measures.

Mlambo-Ngcuka said the ASG initiative would also include a review of the maintenance backlog and the people and equipment needed to reverse it.

Sunday Times, Johannesburg, Business, Special Report, 27 November 2005

The blueprint for a new economy
Deputy President Phumzile Mlambo-Ngcuka is known for not pulling her punches. Here, she shares her thoughts with Brendan Boyle on the various issues relating to her role as head of the Accelerated and Shared Growth Initiative for South Africa

LABOUR REFORM AND SKILLS DEVELOPMENT
THE National General Council (NGC) of the ANC shelved proposals for sweeping labour market reforms in July, but Mlambo-Ngcuka says greater flexibility must be part of the shared growth initiative.

“The work on shared growth actually is not hampered by what happened at the NGC because what we are doing on shared growth is not policy reformulation; it’s better implementation of existing policies,” she says.

“We have agreed that we need to review the labour market. We have to agree on an institution that all parties will accept. The ILO [International Labour Organisation], who did it the last time, may be one option. The specific complaints that people are raising would need to be investigated. We just don’t want to have a knee-jerk reaction. It is too sensitive to do it clumsily.”

Turning to South Africa’s skills shortage, she adds: “A structured initiative between us, the private sector and labour is under way. In particular, we will be responding to the skills we require for infrastructure, for local government and for the priority sectors — tourism and business process outsourcing in particular.

“We’re going to have a secretariat that will be interacting with everybody ... it is a co-ordinated effort [whereby] we can exchange people within and amongst the institutions.”

Mlambo-Ngcuka says people deserve a better civil service. “It is about the skills level, but more than anything else it is people who have a service culture. I think it takes a particular mindset to be the kind of person who is looking for solutions.”

Finding South Africans with the right skills is first prize, she says. “In the case of Eskom, for instance ... they already know what the skills are that they need and can get in South Africa and what the skills are that they are recruiting from outside South Africa.

“In that regard, they have actually gone out there in the field ... and looked for South Africans who may have the skills. That is what we are encouraging — look first for South Africans ... When you look outside, look first for South Africans, look for Africans in the diaspora and then look for anybody who is available.”

Part of their job will be to pass on skills. “Eskom got a lot of retired people who are very excited at the opportunity to work around the assets that they created. Around each person who is a senior consultant or engineer, you have a team of about four people who are being mentored.

“For the young people, they also need to learn within a specific time [and] there are more people than you are actually likely to absorb, so there is competition. It is not a given that because they are part of the team that is being mentored they are going to get the employment.”

Mlambo-Ngcuka is also keen to help private-sector companies battling to import the skills they need.

“On the surface, our regulatory environment should make it easy, but people say it doesn’t really work.

“I have to say it is important to me that I intervene and that it works. The credibility of the initiative means that you do have to solve the problems when people bring them to our attention.”

BLACK ECONOMIC EMPOWERMENT
“IN THE shared and accelerated growth initiative, we are saying that we need to review the unintended consequences of the BEE policy and adjust. There never was an intention that jobs should be given to people who are not qualified — that is indefensible. We also cannot compromise urgent service delivery because of BEE.”

Ensuring broad-based empowerment was her primary goal, she said.

“Broad-based empowerment is about how many people who are working in an enterprise have an opportunity to break this glass ceiling through employment equity.

“For me, the best is about providing people with skills so that they can go and compete in the market.”

The benefits of empowerment should be spread widely, she said, but equity would remain concentrated.

“Equity was never meant to get Ma Dlamini from the back of beyond to get a slice of Absa. I mean that’s absurd. Empowerment at the grass-roots level is about giving people the chance to acquire skills, for instance, so that they can change their circumstances, sustainably and forever. It’s not about equity. Equity is and always will be for the few because we cannot force the banks to lend to people who are not credit worthy. So, yes, a few people will get richer and richer because we are in a capitalist system.”

GROWTH AND UNEMPLOYMENT
PRESIDENT Thabo Mbeki has put Mlambo-Ngcuka in charge of the overall growth strategy, including more than R320-billion in infrastructure spending over the next five years.

“It’s not a new policy, it’s being decisive on what infrastructure we are going to implement, financing it and addressing barriers to implementation,” says the deputy president.

An example she gives is the supply industry. “We need a comprehensive plan to make sure that you don’t have a big project being delayed in the middle of implementation because there is this one input missing that is so crucial. All of us have just realised that we need detail and we need to be meticulous. It’s driving me crazy, but it’s important.”

She says, however, that looking after both old and new infrastructure is a challenge and an opportunity.

“We have tended not to put maintenance high on the agenda. Not only are we putting it high on the agenda now... we have asked the Department of Public Works to produce a report; an overview of the maintenance challenges of South Africa — the cost of doing it, the size of the industry, the skills gap — so that we can launch it as an industry in its own right. Maybe it is not a super earner, but it can absorb a lot of people and it is on-going.”

Cost of Doing Business
Mlambo-Ngcuka said the cost and complexity of regulatory compliance is recognised as a barrier to the integration of the second economy.

“If we are saying that we are going to change the environment, we cannot just come with a broad brush. There are specific things which have been raised. If you come with generalities again, I don’t think that people are going to feel the impact.

“What we are saying is that the boldness is about taking more risks in regard to the second economy. For instance, we need to scale up on micro credit, knowing that you will not have 100% repayment. The level is just too low for what we want to do.”

Exchange Rate
The volatile rand exchange rate is also an obstacle to growth, but options are limited, she says.

“I don’t think we are even pretending that we can fix [the exchange rate]. We also do not want to be understood to be saying that we want to fix the level of the currency.

“We are not likely to do anything that is a big bang — not even on exchange controls. There is so little of the controls that are left. When people talk about it they are talking more about a sentiment and in the market, between reality and sentiment, sentiment matters more.”

Governance
Mlambo-Ngcuka says Mbeki has delayed the finalisation of a new government structure until the shared growth initiative is complete.

“Our structure must respond to an economy and a state that wants to share the benefits, so let’s identify the areas and the things we need to do in order to be this sharing developmental state. Let us get more detail about what is it that we can and want to do in the second economy. Let us look at the shortcomings of service delivery and what needs to be done. We should make sure that the state that we are defining is responding to these needs.”

Mechanisms to ensure accountability might have to be refined.

“We have found that in delivery of anything that has got infrastructure, the rigmarole of tendering is just more than what is really necessary. I don’t know that I am on top of it, but I look at what are the reasons that those deadlines have been missed and it’s just a whole lot of almost self-inflicted injuries — some of them of course because you have to follow due process and be democratic ... and here and there a little bit of corruption.”

The government might even question the number of provinces, she said.

“I think we will get there — it’s not as if this is a no-go area. There are those who feel strongly that some changes need to be made and those who think that we should make it work better the way that it is.”

The goal, she said, would be to ensure that no more deadlines, like the unfulfilled promise to put every learner in a classroom, would be missed.

“Ja, I would be the first one to say: ‘Eish, I don’t think that we are standing in a pretty place as far as that goes. We just have to work more closely with the ministers on that one’.”

POLITICAL STABILITY
MLAMBO-NGCUKA said President Thabo Mbeki and his government were worried about the damage that in-fighting in the ANC could do to the country’s reputation.

“Everybody is concerned. We know that sometimes, globally, people are more concerned about what is happening in the ANC than what is happening in government, because they know that if the ANC is not holding it can have an impact on government. I don’t want to exacerbate the situation by defending — we’re just going through a bad patch. We’re managing in the best way possible, but we are damned concerned about getting it right, and sooner rather than later.

“The dilemma the President has is that when things and issues involve law enforcement and law enforcers, there is very little room for him to get involved without being accused of interference. It has been a very difficult situation for him as well, especially when he is being accused of being a part of the problem.

“Anything we do here, we should be able to defend in 20 years’ time. We should not leave behind a precedent where, if a similar problem were to arise, those people would be unable to take principled positions because, maybe, we took short cuts now.”

She said the government would not ignore the damning United Nations report naming South Africans among the villains in the abuse of the oil-for-food programme in Iraq.

“Really, we don’t want to drag our feet. It doesn’t help us, it doesn’t do us any good. The international expert we have hired is looking at the body of international law relevant in this case and then our own people are looking at the national laws and regulations that are relevant. Then, we definitely will take action ... we are going to check on everybody who was involved.”

AND FINALLY…
“IT’S been a bit hard, but I do intend to grind to a halt this December. We will go to the Eastern Cape, to our family, and we will sit and eat meat and drink beer.”

CURRICULUM VITAE
PHUMZILE Mlambo-Ngcuka tried hard to dodge the job of deputy president after Jacob Zuma was fired in June.

But once she was in the post she wasted no time in making her presence felt.

Mlambo-Ngcuka, 50, was elected to Parliament in 1994 and joined President Nelson Mandela’s government in 1996 as deputy minister of trade and industry.

But it was as minister of minerals and energy from July 1999 that she won the respect of business and industry.

She survived a global market storm in 2002 when a draft of a mining empowerment charter was leaked to the media, wiping R55-billion off the value of the industry in two days.

And she went on to manage the release and initial implementation of the charter over the next three years.

Mlambo-Ngcuka began her working life as a teacher in KwaZulu-Natal in 1981 after graduating from the University of Lesotho.

She built her community profile in Christian, development and education groups, mainly in Cape Town.

But critics within the ruling communist, labour and ANC alliance criticise her quick rise, saying she lacks a struggle track record.

As deputy president, Mlambo-Ngcuka is responsible for programmes to accelerate economic growth and for the nation’s fight against HIV/Aids and corruption.

She is married to former Scorpions boss Bulelani Ngcuka, now head of empowerment firm Amabubesi. They have two sons.

From: http://www.sundaytimes.co.za/Articles/TarkArticle.aspx?ID=1786080

And http://www.sundaytimes.co.za/Articles/TarkArticle.aspx?ID=1786099