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ADDRESS BY HIS WORSHIP THE EXECUTIVE MAYOR OF AMATHOLE DISTRICT

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					ADDRESS BY HIS WORSHIP, THE EXECUTIVE MAYOR OF AMATHOLE DISTRICT MUNICIPALITY, CLLR SAKHUMZI SOMYO, AT THE GALA DINNER IN CELEBRATION OF THE BEE/SMME/AMATHOLE/INDIA TRADE FAIR & EXPO, REGENT HOTEL, EAST LONDON, ON 27 JULY 2006

Honorable Vice Consul of India, Sushil Dobhal, The Regional Representative of the National Small Industries Corporation, Mr. Ravi Kumar, The Regional Representative of the Engineering Export Council, Mr. M.K. Sharma, and The Regional Representative of EXIM Bank, Mr. Sanjeev Pawar All Protocols observed.

It is with humility that the Amathole District Municipality (ADM) is co-hosting, together with the Buffalo City Municipality and the Border Kei Chamber of Business, the Business-to-Business Expo, incorporating the BEE and Amathole India Trade Fair. In the same vein, I take this opportunity to salute the cosponsors of this gala dinner, the Amathole Economic Development Agency (AEDA) and the East London IDZ, for their effort to support the initiative in more ways than one. The success in coming together and co-operating in implementing the expo and the fair does not just demonstrate the ability, nor the need, nor the potential, but the obligation towards a common vision and strategy for business growth and the broader economic development in the region. The current draft national strategy called the Regional Industrial Development Strategy (RIDS), proposed by the Department of Trade and Industry, informed by global trends, demands the kind of institutional co-operation demonstrated around this initiative.

Ladies and gentlemen, we have just come out of the local government elections, in which a new mandate to govern was given to us. Part of the mandate is not only to understand the workings of a developmental local government, but also to

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define the implementation strategy for local economic development. The Amathole District Municipality’s Council mandated a feasibility of global trends around local economic development, and the outcome was the establishment of a Special Purpose Vehicle (SPV) to drive the stimulation of economic development in the Amathole region; thus a Council resolution which led to the establishment of the Amathole Economic Development Agency.

Accordingly, the victory of the local government elections should be seen in the context of the Election Manifesto, in which the delivery of the socio-economic services in local government will not be realized by government only. The Manifesto emphasises the need for partnerships between the public and private sectors, as well as a wide range of civil society, including the labour movement and the opposition across the political spectrum.

Indeed, the hosting of this trade and expo event has given us the opportunity to experiment, and its success thus offers all the reasons, not just to believe and hope, but to celebrate the predictions and demands of the Manifesto. Let us again, whilst rejoicing on this short-term gain, reflect towards a sustainable vision for partnerships.

The development of entrepreneurial activity is primary in the economic development of the Amathole region. Similarly, the support for business growth and development is key in economic growth. However, the challenge is to develop a central nerve wherein such services will be provided, and further monitoring and evaluation be undertaken to measure the impact thereof.

The Business Chambers, consisting of NAFCOC and the Border Kei Chamber of Business, have defined strategies towards the support for SMMEs. To date, in the past three financial years, the ADM procured R408 million from small businesses. However, the challenge is to count how many are still operational, as well as non-operational. Part of the challenge is to reflect on the kind of individual

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and collective support and opportunities among SMMEs. The last feasibility study on SMMEs, which highlighted the failures, identified government policy challenges, and low levels of entrepreneurship in the country, particularly among black SMMEs. Furthermore, the study shows that even though government provides opportunities for businesses, both in skills and finances, it is individuals who destroy viable and sustainable businesses. The biggest mistake common among those who command some of the biggest procurement opportunities from the ADM is the misplacement of priorities, both in their personal and business lives. This then poses a challenge on how quick we disburse procurement opportunities without monitoring the development of the whole business; how it contributes to job creation; how it contributes towards building the industry in which it is operating, and how this translates into the economic growth of the region.

The existence of the business support facilities like the Business Place in King William’s Town and the One-Stop Shop in Mdantsane are some of government and Private Public Partnerships (PPPs) currently being appointed as SEDA’s Enterprise Information Agencies (EIAs). This scenario creates opportunities for co-operation to some extent, but does not formally integrate services towards business development and entrepreneurship.

The creation of an enabling environment for business growth and investment attraction forms part of government primary policies and strategies for economic development. The formation of the Small Enterprise Development Agency (SEDA) to provide non-financial business support for small enterprises, the ECDC’s BDS services, the broader Department of Trade and Industry (DTI)’s business support products and services, and the specific provision of incentives for businesses, particularly investors; the establishment of the Apex Fund to provide financial support to small businesses, the Umsobomvu Youth Fund (UYF) to promote and support youth entrepreneurship, the existence of parastatals like the Independent Development Corporation (IDC), are some of

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the defining efforts through which government build and support businesses in South Africa. The commitment from business chambers and strategic players like commercial banks to develop businesses further creates a supporting role for business growth and development. The challenge then is to integrate all government services with those of the private sector.

Ladies and gentlemen, the above-mentioned scenario puts the demand for linkages and partnership into perspective. This perspective is as follows: the basis of the establishment of whatever we want to call it, a bizcafe, a one-stop shop, a business intelligence center, or a tradepoint, is predicated on a locally crafted common vision. The outcome of the common vision is critical, not just in informing, but also guiding the design and implementation of the Regional Economic Development Strategy, as a global demand for economic

development. The success in achieving this goal will then position us in giving meaning and direction to the current RIDS draft.

The failure to co-operate and establish linkages and partnerships in the past, and the success to partner and host the Business-to-Business Expo in the Amathole region, is a lesson. This lesson means that either we work together or perish together in the economic development history dustbin. Let us de-personalise the public space, let us de-individualise economic development. This is about poor people in this country. Otherwise we will devalue our liberation.

We are indebted to the Indian delegation. You have graced not only this event, but the whole Amathole region in its quest for economic regeneration, particularly in its effort to stimulate the agricultural sector, specifically, agro-processing, and generally the manufacturing industry.

Ladies and gentlemen, the relationship between South Africa and India is not an act of accident, co-incidence or miracle. If we skew our belief in that direction, then we might as well concur with those who claim that South Africa’s liberation

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was a miracle. The enslavement of people of Indian descent from India to South Africa in the Kwazulu/National sugar plantations, the 20th Century Mahatma Ghandi journey from India to South Africa to fight prejudice, the material and nonmaterial support from India during the ANC years in exile, the specific Indian campaign which led to the expansion of South Africa in the United Nations, and the ultimate sanctions against South Africa, bear testimony to the character of the Indian people and its government. You are among trusted friends, you are worthy partners, and we will continue to live and work with you in the quest to make this world a better place to live in.

Ladies and gentlemen, allow me to summarise the Indian economy. It is one of the fastest growing economies in the world, currently standing at 10% GDP growth rate, the second after China at 10,5%. The biggest contributor to the economic growth is the small business community, and within this community, more than 40% is constituted within agro-processing. In real terms, this means that India is currently one of the most attractive investment destinations.

A week ago, The Indian High Commissioner to South Africa, His Excellency Satyabrata Pal, made a call for economic relations between South Africa and India. His Excellency “asserted that India was in a concerted drive to increase exports to South Africa to 5% and imports to 1%. He said the year-on-year leap in trade of 75% could even be surpassed and that trade with South Africa had the potential to expand to $10-billion by 2010 from $2-billion at the moment. India was instrumental in the isolation of South Africa but prior to that we had high trade numbers at 5% for exports and 1% for imports. And now 12 years after those sanctions we should be able to get back to that depth and range."

He added that while political relations were very warm, he would have thought economic relations would have been much better than they were. He noted that plenty of promotional activities were planned for the next few months and this showed the importance South Africa now occupied on India's business agenda.

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This trade expo is a foundation for upcoming events involving South Africa and India. The Science and Aerospace exhibition in September, the Tri-Nations, as part of the Saitex in October, will be the culmination of this event. The penultimate will be the likely visit to South Africa of the Indian Prime Minister for the CEO’s forum.

In summing up his presentation, His Excellency argued that "South Africa is very much at the centre of our radar screen -- and this is not coming a moment too soon.” The trade with South Africa was at R14,5-billion last year, or $2,5-billion, a mammoth leap of 75% from the year before and now the challenge was to maintain and increase the pace of growth. When India reviewed its recent trade with countries like Russia and South Africa at around $2-billion, they determined it was not enough and would look to expand it to $10-billion by 2010.

Quantifying the impact of the second fastest growing economy in the world, His Excellency Pal asserted: "Three years back we had 30 Fortune 500 companies in India and two years ago we had 200. In the next few years the assumption is that all the Fortune 500 companies will have a presence in India”.

In understanding global economic dynamics, there are more business opportunities among developing countries, and in this instance, “there are obvious benefits to being involved in the second-fastest growing economy in the world." Similarly, the benefits accrued in global economic relations are critical in addressing the South African dual economy.

In addressing challenges of a dual and the specific support of small businesses, which are mostly located in the second economy of South Africa, there is a need for institutional co-operation among all stakeholders and role-players in the region. The success in such a co-operation will then assist in not just defining, but also practicing, new models of PPPs. The biggest strength of co-operation,

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linkages and partnerships is to lay a concrete foundation to link with global partners towards mutual economic benefit.

It is then in this context that the economic relations between South Africa, specifically between the Eastern Cape and India, is not just encouraged, and endorsed, but experienced through your presence and participation in the Business-to-Business Expo. We don’t just hope but believe that in the foreseeable future, expressions contained in His Excellency’s strategy will be realized first in this region. I thank you.

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