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Mr Speaker
Honourable Members
Provincial Ministers
Amakhosi
Distinguished guests
Fellow citizens.

Today we can be proud of being citizens of this Province. We have achieved peace in our Province. The coalition government has endured and succeeded in bringing about peace and political stability. Now we need to consolidate this tremendous achievement.

We have placed the interests of our people above party politics and this has enabled us to harmonise our actions and rise above our differences. We have balanced the books by applying strict fiscal discipline and introduced sound financial management. A lot of development projects aimed at meeting the needs of our people are being reviewed in order to strengthen and focus them more appropriately. We have built a sound foundation and we are now poised, better than ever before, to engage another gear and move this Province forward.

In my acceptance speech two years ago I emphasised the need to strengthen governance, to enhance service delivery and to leapfrog development. Today I would like to take stock of progress in these areas and to share with you my vision of how we should capitalise on the good work that has been done in order to speed up growth and development.

1. GOVERNANCE AND ADMINISTRATION

Mr Speaker Sir, strengthening governance remains one of the major priorities of my government as we look forward to year 2004. In this regard, the Provincial Cabinet and the general public have raised the issue of a constitutional framework for the governing of the Province. This has challenged us to clarify our position on the pertinent question: whither the provincial constitution?

Provincial Constitution Making

Within the political debates of our Province the issue of our provincial constitution has often been raised. This Province engaged in an 18-month process of constitution making which produced a provincial constitution unanimously adopted on March 15, 1996 by the Provincial Parliament. That Constitution never came into force because the Constitutional Court did not certify it on constitutional grounds.

Our Province has a history of constitutionalism and an inclination towards it. We carry the legacy of the Buthelezi Commission and the KwaZulu/Natal Indaba, which, for the first time in South Africa, expressed tangible constitutional proposals to move the country away from the oppression of apartheid into democracy. We are prone to constitutionalism. We believe in constitution making as one of the ways in which the gains of democracy can be secured and entrenched. We believe in constitutionalism. We will not engage in constitution making for purposes other than constitutionalism. We will not allow constitutionalism to become a public relations operation or an opportunity for politicking.

The KwaZulu-Natal Provincial Constitution of 1996 was drafted on the basis of a constitutional assumption, which was not accepted by the Constitutional Court during its certification. I was one of the key negotiators of that constitution making process in which we sought to expand the limits of the constitution making power of provinces to the maximum.

The key provision defining the limits of the constitution making power of provinces was set out in the Interim Constitution and required that a provincial constitution should not be inconsistent with the national constitution. Because of the peculiar use of a double negative, and in light of the history of this provision, we believed that the scope, force and effects of a provincial constitution could extend up to the point when a specific limit was encountered in a conflicting provision of the national Constitution.

In fact, the Interim Constitution did not require that a provincial constitution be consistent with its provisions, but rather not inconsistent with them. However, the Constitutional Court rejected this reading and effectively stated that with the exception of provisions relating to legislative and executive structures and procedures, the area, scope and effects of a provincial constitution are the same as those a province has in its legislative competence. That means that with the exception of executive and legislative structures and procedures, a provincial constitution can only legislate on the same area, subject matters and scope, as a provincial law would do.

When the KwaZulu-Natal Provincial Constitution of 1996 was adopted, there was also uncertainty on the relationship between a provincial constitution and national legislation, and it was thought that a law of Parliament could not just override a provincial constitution as it sees fit. We believe that once adopted, a provincial constitution could resist the whim of Parliament in Cape Town and had the power to entrench its provisions in respect of the changing winds of daily legislative politics. However, with the adoption of the final Constitution it became clear that a provincial constitution could be overridden by national legislation as if it were a provincial law. Therefore, in this respect a provincial constitution is exactly on the same level as a provincial law. It follows that with the exception of legislative and executive structures and procedures, a provincial constitution can only regulate and provide for that which can be done through a provincial law, and has the same force and effect vis a vis national legislation as a provincial law would.

Therefore, in many respects, adopting a provincial constitution is nothing more than adopting by a two-thirds majority a law that the Province could adopt by simple majority. We could do through a provincial constitution that which can easily be done through a simple law, except for the fact that once a constitution is adopted, the provincial law must be consistent with it and can be declared invalid if it violates our provincial constitution, which creates an internal hierarchy of laws which may complicate and impair our legislative function. Therefore, we need to identify with clarity what the scope and purpose of constitution making is under the present constitutional dispensation. The only relevant purpose and scope is that of changing executive and legislative structures and procedures. This, in effect, was the only purpose of the constitution adopted in the Western Cape, which changed the composition of the provincial government.

In our Province, it has been voiced that we should embark on an expensive, cumbersome and necessarily conflictual constitution making process for the purpose of increasing the number of Cabinet positions in our government. Drafting a constitution absorbs an enormous amount of political energy, public attention and government resources, which, under the circumstances, one must consider whether they would not be better, employed in formulating and adopting ordinary legislation which can improve on our delivery of services and promote development.

We must continue the constitutional debate, focusing on the real scope of provincial constitution making in the present constitutional dispensation, which, in effect, is limited to the possibility of changing executive structures and procedures. We must promote debate on this issue so that we can verify the need to embark on the constitution making process for reasons over and above increasing the number of Cabinet Ministers. For instance, we need to ask ourselves how the institution of the Monarchy relates to the executive and legislative structures and procedures of our Province and the position of the House of Traditional Leaders.

The Province should be more proactive in developing provincial legislation within concurrent legislative competencies. We cannot always wait for national frameworks to be developed before legislating. In the coming years, I would like to see a more active development of provincial policy and legislation. We must get clarity on the real role of provinces. What powers do provinces have and what is the role of provinces in concurrent legislative competencies?

In the next three years, the Province should re-enact all the assigned legislation and rationalise all pre- and post- 1994 laws, by repealing, amending and re-enacting them as provincial laws. Our legal services should assign and allocate all relevant laws to the various provincial departments.

Intergovernmental Relations

The Office and Department of the Premier are responsible for inter-governmental relationships, and intra-governmental co-operation between the various departments of the provincial government, including co-ordination of their actions and legislation. In this regard, the Provincial Cabinet, at its Strategic Planning Session on 24_26 January 2001, resolved to leapfrog the establishment of Cabinet clusters. Cabinet has approved an action plan, which directs MEXCO (a meeting of the Director General and Heads of Departments) to submit recommendations to Cabinet by the end of March. Our Cabinet clusters will start operating soon thereafter. Corresponding clusters of the heads of departments will support these.

These changes will necessitate a further strengthening of the Cabinet Secretariat, Inter-governmental Relations Unit, Language Practitioners, Research and Policy Unit in the Office of the Premier and Legal Services/State Law Advisers. The Premier's Office should be put in a position to be the effective and efficient heart and nerve centre of government. The Province must have the capacity to monitor and participate effectively in MINMECs. Cabinet should receive full briefings on MINMEC decisions. The provincial Cabinet must mandate provincial Ministers before attending MINMECs.

Our Province should adopt a more robust, yet non-confrontational approach, in intergovernmental fiscal relations. Is the formula for the sharing of the cake equitable to provinces, which suffered huge backlogs due to the inequities of apartheid? How far are we with the implementation of section 228 of the 1996 Constitution on provincial taxes? Draft framework legislation in this regard was available by early last year and it is important that we now take stock of the progress in this area.

Premiers need to be briefed on the deliberations of the Budget Forum and Council. They should be able to set political priorities in the President's Co-ordinating Council (PCC) that could be reflected in the budget. I would certainly be moving in the PCC that the allocation of resources should be one of the standing items.

The Premier's Office is supposed to link the Province with local and national governments. However, there are no effective mechanisms to do this. My Department will investigate the possibilities of setting one-stop-shop provincial interests offices in Cape Town and Pretoria. These offices will monitor developments in national departments and Parliament. They could even promote trade and tourism to the Province.

The provincial government does need a unit that will co-ordinate the twinning arrangements, the signing of memoranda of understanding (MOU) and partnership agreements and create regional and trans-frontier co-operation. This Unit should also promote intra- and inter-provincial co-operation, provincial and local government relations and provincial and national relations.

The provincial government should build a special relationship with local government, which is indeed at the coalface of service delivery. The Durban Metro and District Councils open new vistas for enhancing service delivery and the redistribution of resources. It is imperative that we provide the necessary support to local government to enable it to develop the administrative capacity necessary to carry out its constitutional mandate. This is the implication of the monitoring and support provisions of section 139 of the Constitution.

There is a need to look again at the allocation of functions and responsibilities:

* Local government should carry most of the administrative work while provinces should develop policies and the monitoring and support frameworks.

* Consideration should be given to what functions should be transferred to the new Metro and District Councils in the areas of health, education, welfare, safety and security, housing, environment, planning and economic development.

* Equally, national competencies should be reviewed with a view to giving more powers to the provinces in the areas, for example, of education, health, housing, welfare, land and safety and security.

We should enter into provincial and local government partnerships to enhance service delivery public private partnerships (PPPs).

Section 42(4) of the Constitution provides that the NCOP represents Provinces and should ensure that provincial interests are recognised and provided for in the national sphere of government. Is the NCOP a house of provinces? Has the concept of "provincial interests" developed or are the assertions that the NCOP is a mirror image of the National Assembly and a rubber stamp true? Only provinces can turn this around. In the next four years, we should strengthen the NCOP. We should campaign for more resources for the NCOP, more permanent delegates, and meaningful representation for local government and the Houses of Traditional Leaders. The NCOP should indeed reflect a microcosm of South African life and interests.

Rural local governance: the institution of Traditional Leadership

Rural local governance is in a state of flux. One must hasten to add that Amakhosi are not at fault nor are they intransigent or exhibiting any anti-democratic tendencies. It is once again the old story of promises made before elections are soon forgotten thereafter. Amakhosi have been betrayed!

Our Province is mindful that we bear the legislative competence and responsibility on matters affecting traditional authorities. In terms of our existing provincial legislation, traditional authorities have always operated as the primary local government structures of our people and have exercised all the local government powers, which the Constitution now ascribes to the newly elected municipalities in rural areas.

The clash between the powers of municipalities and those of traditional authorities has been the object of intense negotiations between the Coalition of Traditional Leaders (National House of Traditional Leaders, CONTRALESA and the Royal Bafokeng Council) and the presidency of the country. This process has continued for more than two years. During this process of negotiation, on several occasions President Thabo Mbeki has given his assurance that he would resolve the existing clash between powers and functions of municipalities and those of traditional authorities by ensuring that the powers of traditional authorities are either protected or restored. To this end, he repeatedly indicated his willingness to amend any legislation, including the Constitution. He made this statement to the Coalition of Traditional Leaders in a letter he wrote to them and also when he spoke in the National Council of Provinces in my presence last October. The Minister of Provincial and Local Government announced in the National Assembly on 20 February 2001 that a Bill will be soon be tabled in Parliament.

The solution of this issue still awaits presidential action. An agreement was reached on November 30, 2000 between the President and Traditional Leaders, which committed the government to amend Chapters 7 and 12 of the Constitution to entrench the possibility that the local government powers of traditional authorities be protected or restored. Such constitutional amendment is generally recognised to be necessary to provide a stable and long-term solution to the existing clash of powers and functions.

Traditional authorities have an essential role to play in the development of our communities. If their role is undermined, development will be severely hampered in all rural areas. The undermining of traditional authorities will also spell out the demise of the traditional model of societal organisation, including its laws, culture and traditions. We believe that traditional authorities should develop, grow and prosper in a form consonant with their societal features. They should not be transformed out of existence as a condition for their development. Traditions and modern progress are not necessarily terms of a contradiction, but can be reconciled for the social and material welfare of our people.

Therefore, pending the final solution of the clash of powers between traditional authorities and municipalities, which remains the responsibility of the central government, our Province has the obligation to apply its mind to what can be done in the interim. In the absence of a solution to this issue, a serious possibility exists that the clash between municipalities and traditional authorities may give rise to profound social instability. We must act to avoid such breakdown in relations. We must act to make up for the indecision of the central government. We must act because we are responsible enough not to take this problem lightly, as other people may have done because they are far removed from it.

My Office will propose ways and means to harmonise the establishment of municipalities with existing powers and functions of traditional authorities. Since it is impossible for two entities to be ascribed the same legal powers and functions, we should create incentives for municipalities to become part of the solution rather than being the problem. In terms of the Constitution, municipalities have the power to do what traditional authorities are doing. This overlap can only be solved by hoping that within their constitutionally entrenched area of discretion and autonomy, municipalities may recognise the wisdom to delegate the exercise of their powers and functions in rural areas to traditional authorities, together with budgetary allocations, human resources and logistical capacities necessary to exercise them.

Furthermore, as a Province, which is regarded as a home of the greatest number of Amakhosi, we are expected to show leadership and remove this impasse. In this regard, the Department of the Premier and the Department of Traditional and Local Government Affairs must, within 60 days from today, arrange a meeting between the Premier, the KwaZulu-Natal House of Traditional Leaders and the KwaZulu-Natal Local Government Association. The following matters should be on the agenda:

* An appropriate rural local government model for KwaZulu-Natal. This model can also be used elsewhere in the country.

* The establishment of a Forum for the Province, where Traditional Leaders and local government meet and discuss matters of mutual interest.

We can no longer sit and do nothing while our country is facing a potentially explosive situation. History and future generations will indeed judge us very harshly for "twiddling our thumbs while Rome was burning".

I have also taken note of the commendable work being done by our Department of Traditional and Local Government Affairs where R7.2 million has been spent on the following:

* 35 Amakhosi have attended management courses at the University of Zululand. A course for support staff is in the process of being developed.

* 182 Traditional Authorities do not have electricity and negotiations are currently under way with various parastatals in order to rectify this.

* A computerisation programme is being undertaken. 68 offices have been completed. The remaining 36 will be completed by the end of the 2000/1 financial year.

* Decentralisation has taken place with the appointment of qualified staff with development skills being placed within 3 Regions and 7 Districts. A total of 156 qualified staff members have been deployed in these areas.

Although this work is commendable, it will all be in vain if meaningful steps are not taken as a matter of urgency to create a meaningful legislative framework in which Traditional Leaders can fulfil their proper role.

Transformation of the Provincial Public Service

Transformation of the public service is essential if we are to enhance service delivery. I am aware that section 125 of the Constitution did not list the power to establish and restructure a public service, as one of the executive powers of provinces. However, within national norms and standards, we need to create a transformed public servant who is suitable and able to serve effectively, efficiently and professionally the Province of KwaZulu-Natal and its people. Appropriate provincial norms, standards and values should be identified and be used as strategic interventions to develop a KwaZulu-Natal suited public servant.

Public servants need to be dedicated and committed to the task at hand. They need to be innovative and go about their work in a focused and business-like manner. One of the ways to develop these skills is to promote alternative means of service delivery. This can be done by means of various forms of public private partnerships and private finance initiatives. I have taken note of the fine example that the Department of Health is setting in this regard with the commissioning of the Inkosi Albert Luthuli Academic Hospital. We need more departments to follow this example.

A new public service regulatory framework is in place with a view to transforming the public service and improving service delivery to the people. I must question however, how effectively this framework is being implemented and whether it does have the desired effect? How many departments have created capacity to implement Batho Pele, the White Paper intended to transform public service delivery?

We need to measure our progress in the transformation of public service delivery. In order to do so I urge departments to make use of the comprehensive Batho Pele self-assessment questionnaire developed by my Office. I also urge all managers to enter their service delivery units for the Premier's Good Governance Awards. By so doing they will receive an independent assessment of their standard of service delivery with a feedback report indicating strengths and areas of improvement. In this way we can bring about a continuous cycle of improvement.

Our capacity to timeously and efficiently utilise financial and human resources is still sub-optimum. This manifests itself in non-utilisation at appropriate phases of our programmes of financial allocations. In the face of unsatisfied needs of our people, we have un-utilised financial resources and surplus budgets. We also lack well-conceived and designed measures of impact, consequential to policies that we are implementing.

Government Communication

The increased communication capacity of our government will support the many programmes aimed at promoting public participation. Communication strategies should take government to the people and in so doing stimulate feedback. Indeed, we should be a listening, hearing and responsive government!

Development is intrinsically linked to communication, which should permeate all our development initiatives. The people of this Province require that type of knowledge which informs them about what resources there are, where they can be found, how they can be accessed and when to apply for them. They need to know what standards of services they are entitled to and how to complain if they are not receiving them. It is therefore imperative that initiatives that government is embarking upon are matched by strategies of communicating them to the people.

As a Province with critical human-interest issues, the important role of the media in informing and educating the public is important. We need the vital co-operation of the media with our communication units. The choice of medium in reaching vast and complex communities is an important aspect of our outreach programmes. All departments should create networks with non-governmental bodies and institutions supporting democracy in order to promote constitutionalism, enhance peace, deepen democracy, facilitate easy access to justice and empower and build self-sustaining communities.

Community Safety and Security

Safety and security is first and foremost on everybody's minds. It is a crucial issue, which manifests itself in different areas, and it therefore conjures up strong emotions from local communities often resulting in demonstrations and the handing over of petitions to the responsible MEC. What powers has an MEC over matters of safety and security? And yet it is a very localised issue. If we want to deliver to the people then this is an area that we should arguably be paying most attention to. The reality however is that we have no jurisdiction over it. This is a potential provincial competence that must receive our priority attention.

The involvement of local communities in the fight against crime is essential. I appreciate that efforts in this regard are being made by our Department of Safety and Security, but they are a tiny department with only a handful of people with very limited powers. What impact can they make? Once again this points to the need to address the question of provincial competencies.

Fraud and Corruption in the Public Sector

Mechanisms must be put in place to detect and root out corruption in the public sector. The slogan: "you've heard about it, you've seen it happen and now do something about it" should spur us on to greater heights of vigilance. In this regard a start has been made on drafting a protocol dealing with the co-ordinated investigation of the more serious fraud and corruption cases in the Provincial Government. I believe that it holds promise for the future. Good progress has also been made with the scheme to introduce courts to deal with commercial crimes, which will greatly assist in speeding up the hearing of fraud related cases, with a pilot scheme for these types of courts being introduced in the Pinetown area early in 2001.

We have also made good progress in the area of holistic risk management. A provincial internal audit committee has been in place for some time now. The Minister of Finance reports that the incidence of fraud is declining and prosecution of perpetrators has improved significantly. We would still urge colleagues to do everything possible to ensure that the long outstanding cases receive priority. If we continue to set an example of dealing firmly with fraud and corruption, we stand an excellent chance of rooting it out of our system. In this regard, I encourage all Accounting Officers to co-operate with the Department of Finance's internal audit component to ensure that our commitment to a clean government is achieved. The proactivity, with which Internal Audit approaches weaknesses in our systems, will prevent a situation where the Auditor-General finds problems later when the money and opportunity have been lost.

The Department of Works has embarked on a zero tolerance approach against fraud, corruption and mismanagement. All resources will be deployed in order to eradicate fraud and corruption. In a clampdown against fraud and corruption the Department of Works, after investigating 54 cases ranging from the misuse of state vehicles, conducting private business without authority, unauthorised use of First Auto cards, cheque fraud, awarding contracts to own businesses or relatives, has formulated charges against the identified offenders. As far as contracts awarded to SMMEs are concerned, incidents of contracts being overstated in value are being investigated, as well as incidents of cover quoting. Twelve dismissals have been effected and measures are being instituted to recover the lost money. In the Ladysmith regional office, for example, the Minister of Public Works, the Hon. Reverend C J Mtetwa, has taken an initiative of undertaking a full-scale investigation. For such an investigation to be successful and unimpeded, staffs were put on one week authorised leave.

The success of the Department of Works in its fight against fraud and corruption is attributed to stringent control measures such as the creation of an investigation component, participation in the KwaZulu-Natal anti-fraud and anti-corruption forum and making use of the internal audit component of the provincial Treasury.

Pluralism

The 1996 Constitution envisages in Chapter 9, the establishment of a Commission for the Promotion and Protection of the Rights of the Religious, Linguistic and Cultural Communities. Provinces such as the Western Cape have set up their own Commissions. How can we, as a Province, promote pluralism, multi-culturalism and nation building? We do have members of the Khoisan community and other vulnerable groupings among our Asian Communities.

2.ECONOMIC GROWTH AND DEVELOPMENT CLUSTER

State of the Economy

Under conditions of increasing globalisation principally represented by acceleration in the movement of information, knowledge, capital and trade, the South African economy has proved very hesitant with respect to sustainable job creating growth. Direct foreign investment is reported to be declining and foreign direct investment by local companies is on the increase. If this continues, South Africa will become a net exporter of capital. The rand has weakened tremendously and the benefits accruing to exports are being undermined by increasing cost facing imports in a country that generally has high import propensities. These negative experiences have cost push inflationary pressure in our economy and postpone further interest rate cuts. In fact, speculative expectations on increased interest rates do no good to the economy.

It is important to emphasise that potential benefits associated with globalisation are not a given. This means that globalisation should be strategically shaped and individual country's participation in an ever-globalising world should be based on carefully crafted strategies. While it could be argued that properly shaped globalisation might contribute towards the elimination of poverty from the world, it should equally be understood that it is equally possible that the poorest peoples, countries and regions of the world will become more impoverished and marginalised, notwithstanding growing affluence and abundance elsewhere.

Our economic performance has not helped us to reduce poverty and unemployment. Our manufacturing sector has been relatively robust and export oriented. But its weaknesses are as a result of spatial concentration; major concentration of capital-intensive industries and lack of internal integration. KwaZulu-Natal does not have, in relative terms, a highly educated labour force.

Agricultural potential has not been fully unlocked. It is reported that by fully utilising this potential about 360% increase in the present utilisation can be realised. Agriculture is also not effectively diversified. Sugar cane, forestry and cattle represent principal farming types, accounting for about 65% of the monthly turnover of farms.

The lack of integration of the rural economy to the urban mainstream economy turns rural areas into an economic liability in the Province. It also represents neglect and sub-utilisation of our human talents and natural resources. Rural development has also not been holistic and not based on the principles of local diversity, cultural pluralism and ecological sustainability. The culture of the rural people has been disembodied from their economies and economic efforts.

The development discourse, models and approaches that we have adopted and which inform our development policies and programmes have not transformed our Province and communities with respect to socio and economic inequalities; positive economic growth with growing unemployment and impoverishment; redistribution of resources in favour of the economically and socially marginalised; and intra social group inequalities and collapse of communities and families.

In South Africa as a whole and in KwaZulu-Natal in particular, the phenomena of poverty and unemployment are increasing, and becoming profound and lasting. If remaining unresolved, these processes of unemployment and impoverishment may lead to a durable structural division of society and the marginalisation of the majority of the citizens of this Province. Economic growth alone, even when sustained, will not solve this structural problem. The risk of developing two societies with impenetrable boundaries is increasing. We can now say with experience that economic growth alone does not solve the problem of uneven distribution of poverty and the continued marginalisation of a significant segment of our people.

Poverty has spatial, racial, age and gender dimensions. The same can be said of the spread of HIV/AIDS.

Using expenditure measures of poverty, poor households in KwaZulu-Natal fall between 20% and 39%. At district level SA Statistics identifies the following districts in KwaZulu-Natal as being poorer; Ixopo, Polela, Underberg, Maphumulo, Alfred, Msinga, Kranskop, Weenen, Mthonjaneni, Nkandla, Ubombo and Ingwavuma.

African headed households generally and female headed ones in particular experience impoverishment most. 59% of female-headed households are poor in KwaZulu-Natal against the national figure of 37%.

More than 72% of children under five years live in poverty; those between the ages 6 and 15 the percentage is just under 72%. It is reported by SA Statistics 2000 that almost one quarter (22,2%) of South Africa's total "poverty gap" is in KwaZulu-Natal. The Development Bank of South Africa reports that each income earning person in Northern KwaZulu-Natal supports more than five other people, demonstrating a high dependency ratio.

KwaZulu-Natal occupies third position with regard to the Household Infrastructure Index, with the first and second position being occupied by Eastern Cape and the Northern Province respectively. This Index measures provinces needing the most infrastructure development in relation to their population. With respect to the Household Circumstances Index calculated as a combination of unemployment rate, average size of household and children less than five years, KwaZulu-Natal takes the second worst position following the Eastern Cape. Both infrastructure and circumstance indices demonstrate provinces in most need of development assistance. The first index calls for improving the quality of life of the people through ensuring their access to basic needs (water, sanitation, health, education, acquisition of skills etc). The second index is related to people empowerment, job creation and human and population development.

Poverty reduction and economic growth and development can only be realised through effective participation of the majority that is currently economically marginalised in decision-making, access and control of productive assets. To realise this imperative, I intend, in the course of the year, to hold a meeting with representatives of black business and community based non-governmental organisations. The purpose of this dialogue will be to exchange views on how best the provincial government, in collaboration with these sectors, can improve service delivery and enhance possibilities for poverty eradication through appropriate ownership and utilisation. It will be important to determine, for instance, how the procurement activities of government can enhance the growth and spread of viable black businesses and community collective efforts.

Parastatal institutions such as Ithala Development Finance Investment Corporation, KwaZulu Transport Services and Nature Conservation Services will also attend the proposed indaba. It is important that the goals, strategies and activities of our parastatals must be informed by the priorities set by Cabinet for the Province as a whole.

As a result of poor household infrastructure and household circumstances indices, the Human Development Index in KwaZulu-Natal was reported in 1996 to be 0,602. This was the seventh position among the nine provinces, with first position representing high Human Development Index. With respect to Human Poverty Index KwaZulu-Natal occupies the sixth position. This captures a broader increase of poverty going beyond money and income, that is the measure of deprivation in basic dimensions of human development and the proportion of the people left out of progress. Similarly gender equality and participation indices give us low marks. These are represented by gender development and empowerment indices.

Gender equality

Gender equality is a critical focus area within the Province. It has been shown that the progress made with gender so far has been unacceptably slow. To achieve gender equality a number of activities within the Gender Equality Programme will be prioritised in provincial planning. This will include the drafting of a Provincial Action Plan for Gender Equality. This programme will, among other areas, focus on: prevention of violence against women; recruitment and promotion of women to higher management positions in the public service; the economic, social and political empowerment of women; and the harmonisation of patriarchal relationships in our families, households and communities.

Disability

Gender, disability and youth programmes are to be handled within a common platform and base: the Human Rights departure point. The solution to disability problems is to be emphasised; so is the monitoring, reviewing and strengthening of KwaZulu-Natal Integrated Disability Strategy Implementation Plan.

Economic Growth and Development Initiatives

The development of the economy of our Province can be seen as one of the most critical issues that we, as a provincial Government, are facing today. Until such time as the opportunity exists for every individual in this Province to participate in the process of building wealth and eradicating poverty, we cannot relax our commitment and vigilance in this regard.

In order to give effect to this vision a number of major programmes are being implemented. I will not report on all of these but merely highlight a small number.

One of the cornerstones of our strategy is the development of small, micro and medium enterprises as the engines of economic growth and employment generation. The government is an active partner in the Durban Manufacturing Advice Centre (DUMAC), which was set up to assist small and medium sized firms seeking access into export markets.

An agreement has also been concluded with DUMAC to establish and operate a satellite in Pietermaritzburg. To this end, grant funding of R 600 000 has already been paid out to expedite the establishment of the Centre.

Government is actively involved in organising producers of arts and crafts into business entities involving mainly rural women. A project has been developed, to assist with production and marketing and to improve the skills and business acumen of crafters. Some 250 crafters will be assisted through this project.

We are also focusing on the potential of creating small and micro rural businesses based on the informal fruit tree resources of Maputaland. Together with the CSIR, our project managers, we have focused on the training of entrepreneurs and supply of relevant technology. The first ten entrepreneurs, all women, have been trained in fruit processing and business principles and provided with cottage industry equipment to produce fresh fruit juice.

On the international front, a project to assist companies to obtain foreign markets has met with initial success. Ten SMMEs who participated in foreign trade exhibitions, received export orders valuing more than R 500 000.

As part of the programme to address the problems created by the violence of the past, Government allocated an amount of R 10 million to establish a Trust Fund to assist small businesses devastated by political violence during the period 1984 to 1994 in KwaZulu-Natal. To date, over 500 applications have been received, of which 400 were eligible to participate in the Fund and 17 loan applications have been approved based on guarantees issued.

It is unfortunately evident that emerging contractors have difficulty in securing big contracts as they lack extensive skills in technical, administrative, commercial and managerial areas. With government assistance to the emerging contractor programme, entrepreneurship and business management skills training have been offered to a number of emerging contractors.

Resulting from support and business advisory service to a number of emerging contractors, Sakhisizwe construction is an example of a company that, through nurturing, has become a successful medium sized construction company.

The overwhelming majority of consumers in our Province are not equipped with an understanding of their consumer rights and responsibilities. Government has therefore embarked on an educational campaign wherein consumers are informed of their rights and responsibilities.

Through our achievements in the past, government has managed to lay the foundation for sustainable economic growth in a number of areas in our Province. However, if we want to achieve the goal of a sustainable livelihood for all people in the Province, we will have to redouble our efforts and we call on private business to join forces with us in this quest.

Tourism

Tourism is arguably one of the main contributors to economic growth in our Province. It is reported that annually, there are 8.7 million domestic tourists and 500 000 foreign tourists visiting KwaZulu-Natal. The total market value of domestic tourists is about R 5 billion per year and that of foreigners is between R 2 to 3 billion per year.

However, much can still be done to develop the tourism potential of the Province and, more importantly, to change the tourism industry into a vehicle for economic empowerment by developing tourism in locations which will foster not only greater community participation but also ensure that there is greater benefit to communities.

In order to give this drive impetus I propose that an Indaba be held in the Province to take stock of where we are in this regard and to develop appropriate tourism models that will contribute to effective and sustainable rural economic development and empowerment.

It is pleasing to note that the construction of the all-important King Shaka International Airport is now also receiving attention at national level. My government will continue to promote this extremely important project, as an airport of this nature will fulfil a vital role in the economic development of our region.

Gaming and betting

Gaming and Betting continues to be a priority. The short-listing of members of the Gambling Board has been finalised and the new Board will be in place shortly.

Betting tax is a consistent source of income for the Province and I anticipate that a total of R36, 5 million will be collected from bookmakers and the totalisator in taxes by the end of the current financial year. It is important that this source of income is protected, particularly as the betting component of the gambling industry faces stiff competition from its rival brother, the casinos. It is for this reason that a fresh approach to regulating the industry is needed and I am hopeful that this will, in part, be achieved by the new legislative proposals to be made.

Draft legislation to replace the Regulation of Racing and Betting Ordinance, 1957 has been prepared and should be tabled in Parliament in the near future. This legislation is the product of extensive investigation into the betting industry and is intended to modernise the regulatory framework that governs betting operators, namely bookmakers and the totalisator.

Steps are being taken to develop a policy on Problem Gambling, which, inevitably, is a consequence of gambling. Fortunately problem gambling can be managed by carefully constructed interventions and programmes that promote responsible attitudes to gambling by both the licensees and gamblers.

Agricultural Initiatives

The actions of professional staff in our Department of Agriculture to contain the outbreak of foot and mouth disease deserve special mention. Within hours of the diagnosis, classic containment and eradication measures, which are up to world-class standards, were put into place. Assisted by veterinary teams nationally and by other Provinces, as well as the SANDF, SAPS and others, working long and exhausting hours, often in appalling weather conditions, they succeeded, with only one exception, in containing the outbreak within the 10 kilometre radius.

The establishment of the Agricultural Development Trust enhanced the funding of agricultural projects, rural upliftment and poverty relief projects by overseas governments and other interested parties. The concept of using "ring fenced" donor funds for projects that donors particularly support, is proving successful. As part of this initiative exploratory contact with private sector companies and other institutions to source funding for the establishment of food processing plants based on local production, will now commence.

The success of the Xoshindlala campaign, set out as an emergency food security measure, suggest that it could be the start of a more ambitious campaign to unlock the real agricultural potential of our Province. Government has been very active in assisting both commercial and small farmers in the traditionally settled districts. In particular, assistance to emerging farmers serves to encourage this sector to develop their productive capacity and in so doing, help them on their way to becoming part of the commercial farming sector. This approach embodies the very essence of poverty alleviation providing people with a means to uplift them.

Closely associated with the Xoshindlala campaign, is the new farmer settlement programme where government plays a facilitating role in gaining entry for previously disadvantaged individuals to the commercial farming sector through assistance with obtaining land, providing financial advice and administrative backup. This programme will be considerably enhanced in the coming year when significant tracts of state land are to be released by the national department of land affairs for the settlement of new farmers. I firmly believe that this will give tremendous impetus to the movement of the previously disadvantaged into commercial agriculture with the added advantage of increasing productivity and creating an important new market for the agricultural supply industry.

Transport Programmes

Our Provincial road construction industry has been revitalised through the establishment of the staged advancement emerging contractor programme.

During the past financial year, over 3500 km of roads have been built in rural areas to help link disadvantaged communities to the mainstream economy. Our emerging contractor programme was rated among the top 300 Impumelelo Black Empowerment "Companies" in South Africa.

The programme promotes equity in the civil contracting sector by creating more work opportunities and the development of emerging entrepreneurs through the promotion of sustainable business development. Since its inception the number of emerging contractors has increased enormously. Some 81 contracts totalling R 25,1 million have been awarded to emerging contractors to date.

In the coming year opportunities for the programme will increase dramatically when government will aim to promote and support emerging entrepreneurs by ensuring that they can aggressively compete for work in the open market.

On 27 January 2000, the Government launched the Zibambele contract system, which uses labour intensive construction methods. The programme employs destitute families with no income and encourages flexible working hours so that people can continue with farming and other income generating activities. More than 4500 destitute rural families benefited through earnings generated by the Zibambele project.

Zibambele creates sustainable work opportunities and at the same time maintains public assets that are valued by rural communities. Long-term economic opportunities are created by allocating contracts for the routine maintenance of roads. Thus far, 98% of the Zibambele contracts have been allocated to households headed by women.

The Zibambele programme was selected as one of the 25 finalists for the Impumelelo Innovations Award Programme. In September 2000, finalists presented their programmes to the Selection Committee and at a Gala function on 24 November 2000, Zibambele was announced the winner.

The Impumelelo Innovations Award Programme is aimed at rewarding innovations in government and public private partnerships that reduce poverty and address key issues of national concern. Some of the aims of the programme are as follows:

* identify and highlight innovative and effective examples of service delivery in the public sector;
* reward projects that successfully focus on the reduction of poverty and the improvement of the quality of life of the poor.
* improve the delivery of services in South Africa.

In the coming year we plan to increase the number of Zibambele household contracts from the current 2700 to 6000 with an eventual target of 40 000.

Government has increased public awareness and active participation in road safety campaigns through Asiphephe. To date more than half of the Amakhosi in KwaZulu-Natal have signed a pledge to become patrons of road safety. The Road Transport and Education Committee chose the KwaZulu-Natal Department of Transport's community youth project as the best in the country. This was because of its participatory educational techniques project, piloted for the first time this year in KwaZulu-Natal.

The Motor Licensing Bureau is committed to service delivery and over the last year opened up service centres at Bulwer, Ingwavuma, Mahlabathini, Mkuze, Mtubatuba and Umbumbulu.

3. SOCIAL SECTOR

Housing delivery

Significant progress was made in the field of housing delivery during the review period with 19,188 housing units constructed and 20,525 serviced sites completed at a cost of R317 million. Government also approved 17 projects at a cost of over R150 million in respect of slum clearance. Special housing projects totalling R69 million to provide housing opportunities for flood victims and victims of political violence were also approved.

In respect of rural housing delivery, 16 projects valued at R125.5 million were approved to provide over 6,700 housing units to people in rural areas.

Government also supported the "people's housing process" by way of providing subsidies and technical and administrative support to communities to build their own homes. The establishment of partnerships with municipalities and local communities in housing development also gathered momentum during the period.

In order to promote grassroots economic development, government has utilised emerging contractors and developers, many of them women, in the housing delivery process. Government also ensured that established contractors employ local labour and emerging contractors for their projects.

Social welfare initiatives

Social Welfare initiatives have been concentrating on old age pensions, disability grants and child support. Great improvements have been achieved in these areas. These measures, however, are ill focused and inadequate to reach those living with no income and the employed poor.

According to the UNDP Human Development Report 2000, this means that even if social welfare departments effectively reach the intended beneficiaries, 30% of the very poor and 40% of the poor households would continue to receive no social assistance. Obviously, in the context of unemployment and jobs shedding economic growth, the plight of these households is extremely bad. It should now be recognised that mere working, whether in informal, semi-informal or formal sectors, is not an answer to poverty.

HIV/AIDS and poverty, though existing in non-causal terms, have a high correlation in so far as poverty influences behaviour that makes individuals more vulnerable to HIV/AIDS and the sufferers of HIV/AIDS become unable to earn a livelihood and the orphaned children descend like an avalanche to poverty fields. The latest (1999) National Department of Health statistics estimate KwaZulu-Natal HIV prevalence rate at 33,5% and HIV prevalence among women attending antenatal clinics has more than tripled since 1993 and more than doubled since 1994.

In regional terms it is reported that in 1996, the highest prevalence rate have more than 20% were concentrated in Durban, Empangeni, Ulundi and Jozini. By 1999 the regional prevalence rate in Pietermaritzburg, Durban, Jozini, Ulundi, Ladysmith, Newcastle and Port Shepstone was above 30%.

It is forecast that the population of KwaZulu-Natal could be one quarter smaller in 2016 than it would be without the presence of the HIV/AIDS pandemic. The active labour force will be hard hit. There will be considerably fewer children under five years and people aged 25 to 40 years. The cumulative number of orphans arising from the death of parents from HIV/AIDS is increasing at a high rate.

Private welfare organisations run a number of children's homes with AIDS orphans who are HIV positive. A 1997 survey revealed that there are more than 100,000 orphans in KwaZulu-Natal and the figure is rising every day. This fact, coupled with poverty rates, over-stretches our welfare budget in foster care provision and general care of children. In order to address this issue the Department of Social Welfare has, in conjunction with the Education and Health departments, identified suitable centres around the Province to look after affected and infected children.

One of the ways in which we can tackle this scourge, is through educating our citizens and in particular, the young. The Department of Education and Culture has embarked on the implementation of a major new, nationally and provincially co-ordinated HIV/AIDS education programme, which is being funded from national level.

The Department of Social Welfare and Population Development is also setting an example for the rest of the country with the payment of social security grants. These grants, which include pensions, have in the past been be-devilled by fraud and corruption.

The re-registration project undertaken by this Department to eliminate "ghost recipients" was completed in October 2000. The confirmation of information was done through personal interviews of every current beneficiary at a number of points throughout the Province involving well over a million interviews. This exercise has resulted in a saving of approximately R17 million per month. This is indeed a best practice for KwaZulu-Natal, which is now being, emulated elsewhere.

The Department of Social Welfare is now actively pursuing a policy of taking its services out to the people particularly previously disadvantaged people. For example with regard to the responsibility in caring for the elderly and children in need, there is now a concerted effort to also provide these services in rural areas. In rendering services to people with disabilities at the two centres that the department runs steps are being taken to train people in skills that would enable them to establish an own business. In the area of drug abuse, the department has initiated an outreach programme to raise awareness in communities, and particularly in schools.

An innovative initiative in the social welfare field is the introduction of village banks. Village banks are financed from the National Welfare Fund and allocated to the financial service association to open village banks in deep rural areas. Village banks are community banks targeting rural areas, which have no access to financial institutions. They aim to promote economic development in rural communities. They involve rural communities by providing them with training to run the bank. Members of the local community also become shareholders in their community banks.

Village banks have been established at Obonjeni (Kwajobe), Nkandla, Qhudeni, Ingwavuma, Msinga, Impendle, Kranskop, Bamshela and Maphumulo. More village banks will be opened at Hlabisa and Nquthu. Establishment of village banks is indeed a challenging exercise. For many of our people this is the first time they are being introduced to banking and it is also the first time that they have the opportunity to become shareholders in a business.

Education and culture

The Department of Education and Culture can feel a sense of achievement in the improved matric pass rate for the past academic year, which can be attributed to the strategies, which have been employed by the Department, particularly in the rural and disadvantaged areas of the Province. In this regard, R10 million was spent in providing those schools which had a less than 50% pass rate with regular trial examinations on those subjects which caused the greatest difficulties. Subject Advisers and Superintendents of Education also identified and worked with those schools, which needed special attention. Although the pass rate has improved, I would encourage all those involved in education to redouble their efforts and continue with these interventions to ensure that we never again look at our pass rate with shame.

The Ministry of Education is in the process of establishing the Premier's Education Lead Projects. These projects will include, inter alia, the Premier's School of Excellence and the Premier's Sports Awards. These are, indeed, commendable initiatives.

According to schedule 4 of the Constitution of the Republic of South Africa of 1996 and the Higher Education Act of 1997, all tertiary education is a national competence. Consequently, all colleges of education administered by provincial education departments closed down on 31 January 2001 (Government Gazette Notice 1383). The KwaZulu-Natal Department of Education was responsible for 15 colleges of education.

Five pre service colleges of education (Edgewood, Eshowe, Esikhawini, Gamalakhe and Indumiso) and one distance education college (SACOL) were incorporated into higher education institutions. The national Minister of Education, Prof K Asmal, published a final declaration on colleges of education that were earmarked for incorporation into higher education in Government Gazette Notice 1383. The KwaZulu-Natal colleges were declared as follows:

Edgewood to be taken over by the Natal University, Esikhawini and Eshowe to be incorporated into the University of Zululand, Gamalakhe and Indumiso into the Technikon Natal and the South African College for Open Learning (SACOL) will be incorporated into UNISA.

Nine of the 15 colleges of education were not earmarked for incorporation - Adams, Appelsbosch, Durban, Ezakheni, KwaGqikazi, Madadeni, Mpumalanga, Ntuzuma and Umbumbulu. It is proposed that the physical resources of these colleges may be utilised as follows:

Durban College: utilised as a head office component

Adams: converted into a high school

Ntuzuma: converted into a high school

KwaGqikazi: taken over by the Ulundi region

Appelsbosch, Mpumalanga: if sufficient funding from private enterprise is not available to establish community training centres, the buildings may be handed over to the Department of Works for utilisation by other provincial departments

Ezakheni: taken over by Mnambithi

Umbumbulu: no firm decision has been taken. Various options are being considered

Madadeni: to be temporarily retained by the Department of Education and Culture to accommodate students and youth into science, technology, engineering and mathematics (SYSTEM)

Personnel are in the process of being absorbed in the Departmental Regions/Districts and Head Office. After absorption, college educators and administrative personnel identified by Higher Education Institutions may be seconded to these institutions. The above-mentioned is in accordance with the Public Service Council Bargaining Chamber (PSCBC) resolution: Framework for the management of personnel in the process of incorporation of Teacher Education into Higher education. The resolution was signed on 14 December 2000 and this agreement is valid until 31 December 2002.

Youth development

The capacitating of our youth to enable us to move away from a dependency on social grants is essential. The establishment of the Youth Commission and the Youth Indaba held last year are examples of the high priority placed on our future generations.

In this regard, Government has been very active, particularly in the less advantaged areas, in the establishment of skills centres, which offer alternative forms of training to enable those members of the community who make use of them, to become more self-sufficient, and in many cases to develop entrepreneurial skills. These centres are proving to be very successful, largely due to the fact that they are essentially initiated by the communities themselves and as such, are based on real community needs.

Health

In the health environment, the cholera epidemic that began in August last year has unfortunately escalated. By the middle of this month, over 47 000 cases had been recorded. The World Health Organisation team who visited our Province declared that management of the disease had been exceptional, praising the commitment of health personnel and the Joint Operations Committees representing various sectors, which was a good management tool.

I applaud the Department of Health for the dedicated and professional way in which they have approached the management of this disease, which has kept the death toll fairly low; it is of great concern that this epidemic is merely a symptom of a greater problem. The need to deliver basic infrastructure to our citizens, particularly those in the deep rural areas, is an area, which must now be given undivided attention by government. We call upon all involved in the delivery of basic infrastructure, whether from the Government, NGO or private sector, to do their utmost to ensure that our people have affordable access to such basics as potable water.

There is no doubt that HIV/AIDS remains a major challenge to our Province and, based on the Cabinet Aids Initiative, the Department of Health has established the Provincial Aids Action Unit. The 13th of June 2000, saw the launch of the Provincial Aids Council which comprises members of both the public and private sectors in line with norms laid down by the national Cabinet and adopted by the National Aids Council and we look forward to seeing significant progress being made in the co-ordination of our efforts in the fight against HIV/AIDS. Accordingly therefore, an integrated response is going to be adopted.

Basic health care goes hand in hand with good nutrition and the integrated nutrition programme, which aims at facilitating a co-ordinated inter-sectoral approach to solving nutrition problems with emphasis on building long-term capacity of communities to be self-sufficient in terms of their food and nutrition needs. At present over 2700 primary schools participate in a primary school feeding programme. The benefits include decreased absenteeism and improved concentration in class, resulting in improved general health.

4. CONCLUSION

In conclusion, Mr Speaker, Honourable Members, I must point out that I have only highlighted a few of the many challenges and opportunities facing us. I give the assurance that my Cabinet and I have accepted these challenges and we have, at a recent Indaba resolved to tackle them with renewed vigour and determination. We decided that we can best serve the interests of all the people of the Province by making our main areas of focus: first, the strengthening of governance, secondly, poverty eradication and the reduction of the spread of HIV/AIDS and thirdly, human capability development.

As far as the strengthening of governance is concerned, this was taken to be inclusive of provincial, national and local government relations; effective and efficient public service management; effective participation by citizens and organised civil society in public policy making and management; synergetic relationships between political and management/administrative authority levels; safety and security and the eradication of racism.

The eradication of poverty and reduction of the spread of HIV/AIDS should be achieved through the formulation of appropriate growth and development strategies. The development paradigm of the past which emphasised only economic growth, urbanisation and modernisation, have not solved the problem of uneven distribution of poverty and marginalisation of a significant segment of our people.

What is being experienced is an active process leading to diminishing access by the majority (especially in the rural areas) to options, resources and entitlements.

The emphasis is going to be on development strategies that are premised on local knowledge, people, experience, institutions and culture. Participation by individuals and communities in economic growth and development and in human development is the essence of development. This approach will lead to organised efforts to control resources and regulatory institutions by those who have been excluded in the past.

Cabinet also emphasised that poverty eradication will be achieved through this provincial government's participation in development efforts initiated by individuals and communities; through supporting citizens to support themselves; and as a result of the effective utilisation of resources possessed by individuals and communities.

As a response to the under-development in rural areas, the Premier has launched an Integrated Rural Development Programme. The Office of the Premier has been charged with the responsibility of co-ordinating the implementation of this programme.

This approach emphasises the need for an aggressive and properly focused rural development programme, which is premised on self-reliance, people's initiatives in terms of investment, institutional development, assets, experiences and knowledge. Given the interplay between poverty and HIV/AIDS, an integrated response framework has been designed as an answer.

This leads on to our third focus area of human capability development. It includes formal education at different tiers and broader aspects of human development leading to the acquisition of knowledge, skills, culture and the achievement of autonomous development and self-reliance.

The Province of KwaZulu=Natal is endowed with no less than four universities (including the UNISA satellite) and four Technikons (including SA Technikon). There is, however, no structured and mutually rewarding relationship between these institutions of higher learning with the provincial government. Abundant opportunities for research, public policy testing and specifically designed training and development programmes, are subsequently lost. Equally, internship opportunities within government for students and academic staff are sacrificed.

In order to give impetus to such important development focus areas, our Province will be hosting a series of indaba or major events on topics that will encourage public participation and bring about a meeting of the minds on crucial issues such as integrated rural development, tourism, youth affairs, the institution of traditional leadership and effective communication with our people.

I believe, Mr Speaker, that if we become truly focused on these areas of development, and if we build on the sound foundations of political tolerance, peace and stability that we have established for ourselves, we shall make our Province attractive to investors and tourists.

Our clarion call as a government for the next four years will be:

* Consolidate peace and stability, strengthen governance and leapfrog development.

I thank you.

Issued by Office of the Premier, KwaZulu-Natal

26 February 2001