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The DTI's mission is to promote both competitiveness and equity in the context of a global economy. In pursuit of this mission, the DTI takes government's microeconomic reform strategy as its starting point for determining its priorities for 2002-2003.

The structural changes introduced to the South African economy by government since 1994 are bearing fruit. This is demonstrated by the relative robustness of our manufacturing sector, the growth in value-added exports, and the attraction of significant domestic and foreign investment in the context of a volatile currency and a global economic slowdown.

The microeconomic reform programme, a carefully constructed, sequenced, and integrated set of actions to be taken by government, will continue to be the compass by which we set our course for the year ahead.

Today's briefing will highlight three important work areas that the DTI will undertake in 2002/2003:

* Strengthening institutional capacity to deliver to economic citizens
* Generating policy certainty
* Reviewing and improving the DTI's products and service, including building strategic partnerships to increase outreach and efficiency

IMPROVED INSTITUTIONAL CAPACITY TO DELIVER

The DTI has become a customer-focused institution committed to continuously improving its ability to deliver services to economic citizens in order to promote higher levels of economic growth, competitiveness and economic equity in South Africa. In 2002/2003, we will continue to build on the successes achieved thus far in institutional capacity-building:

* A more appropriate organisational structure has been put into place that gives greater responsibility to managers and this has speeded up decision-making and implementation.

* Deputy Director-Generals have been appointed to head up the six divisions comprising the new organisational structure, thus strengthening the management capacity of the department.

* The gender and racial composition of the senior management team is now representative of the demographics of South Africa.

* Corporate governance has improved significantly with the establishment of an Executive Board as the highest decision-making body in the department. All executive decisions are now properly documented. In addition, various subcommittees of the Executive Board have been put into place to expedite decision-making, including committees focusing on policy, offerings or products, and operational matters.

* We have made significant progress in aligning expenditure with the department's budget bringing down underspending, which was 38% of the budget in previous years, to under 3%.

* We have made great strides in promoting greater economic policy coherence amongst all government structures, including other national departments, provinces and local government.

* We have improved our services to our clients. As examples, we have reduced the time taken to register a company from 21 days to 3 days and the number of calls dropped by the DTI switchboard has been reduced by over fifty percent.

This year the DTI will introduce cross-functional teams to develop strategies to promote those economic sectors, clusters or value chains, and geographic areas that have a strong growth potential. This will fundamentally alter the work practices of the DTI divisions, increase the focus of our efforts, and improve the DTI customer interface.

In addition, our ability to monitor and evaluate the impact of our work on the economy generally, on specific key performance areas such as small business development, black economic empowerment, and competitiveness, is another area of focus for the DTI this year.

GENERATING POLICY CERTAINTY

In June last year, the DTI successfully launched an official policy journal, Sizebenza Sonke, in order to communicate with key economic actors about our policy positions (The journal has a global distribution of 5000 copies on a quarterly basis). This year we intend to deepen this dialogue and the department is convening its first policy symposium in April to bring together our stakeholders to actively discuss and debate key trade and industrial policy matters in a bid to broaden our policy-making processes.

In anticipation of this event, as well as the public hearings on industrial strategy to be held by the Portfolio Committee on Trade and Industry, the DTI is formulating a revised version of its industrial strategy discussion document. This second version will take on board many of the comments made by various stakeholders since the first draft was released last year. The document will be linked with government's microeconomic reform strategy and specifically address the nature of our support to sectors and value chains.

Further, the DTI will be releasing discussion papers on small business development and consumer protection later this year.

SMALL BUSINESS DEVELOPMENT

A more sectoral approach to small business development will be adopted in line with the DTI's decision to work specifically on the development of sectoral strategies.

Amendments to the National Small Business Act will be introduced into parliament later this year. These amendments will provide for the establishment of a voice for small business, revise the current definition of a small business, and also, in line with the President's announcement last week, provide for a revision of the mandates of the institutions established to support the small business sector.

Other initiatives to support small business include the consolidation of existing successful programmes such as Ntsika's mentorship programme, assistance with entering export markets, and the expansion of local infrastructure and support for the provision of business development services. In partnership with provinces we will be expanding the highly successful Manufacturing Advisory Centres.

This year, the DTI will concentrate on the promotion of sustainable livelihoods by supporting the micro-entrepreneurial sector of the economy. The DTI is currently working with several NGOs on the question of micro-financing for productive activities. The needs of the micro-sector differ from other small and medium enterprises, for example, the size of loans required are generally much smaller, between R300 and R10 000. Further, rural African women dominate the micro-sector; the poorest group in our country, and support to this sector will contribute towards poverty alleviation. The role of government in supporting this sector is being examined and the department has set aside resources to capitalise a fund targeted at the micro-sector.

BLACK ECONOMIC EMPOWERMENT

The President announced government's approach to black economic empowerment in his address on Friday, 8 February. The DTI is reviewing the products that it offers to support black entrepreneurs and firms; this includes a more integrated approach to financing BEE initiatives. The DTI is also adopting a sectoral approach to the issue of black economic empowerment and will seek to identify opportunities for historically disadvantaged individuals to participate meaningfully in sectors with a high growth potential. In this area, the DTI is also examining ways to support different forms of enterprises, such as cooperatives, to allow for different kinds of participation in the economy.

LOWERING THE REGULATORY BURDEN

The DTI is conscious of the need to reduce the regulatory burden on firms in an appropriate manner that also protects the public interest. In 2002/2003 the DTI will commence work on a corporate law reform programme. We will introduce several pieces of legislation into parliament this year, including the Small Business Act amendments mentioned earlier, legislation to establish a commission for international trade, further intellectual property rights reforms, amendments to gambling legislation, and new liquor legislation. The National Department of Agriculture and the DTI have agreed that the DTI will take over the function of the registration of cooperatives thus making it easier for cooperatives to register and thereby gain access to government support schemes.

THE DTI's PRODUCT OFFERINGS

Last year, the DTI embarked on a process to catalogue our product offerings to the DTI's customers. For the first time the department has a comprehensive product register and we are now working through this register to assess the relevance and effectiveness of every single product including incentives, non-financial support schemes, matching grant schemes, trade agreements, and other offerings. We are working with our own DTI sector people, stakeholders, as well as local and international experts and practitioners to look ahead to develop new or revised products appropriate to our economy. We will also pay greater attention to how these products will be delivered to our customers and will be investing in innovative delivery mechanisms.

This year we will be introducing some new products. The Strategic Investment Programme is an incentive scheme to promote large-scale strategic investments by both domestic and foreign investors in the South African economy. This scheme, announced by Minister Manuel last year, is ready to receive applications. The regulations have been published and an adjudication board is in place to adjudicate applications. The Export Marketing Assistance Scheme has been reviewed and an updated, more streamlined, scheme will be introduced later this year. (For the moment, the current scheme is still in place).

Furthermore, the DTI will develop additional products to promote a more equitable geographic spread of growth and development. Currently, the Industrial Development Zones and Industrial Participation Programme are the only products with a spatial dimension.

Our pursuit of greater competitiveness and equity occurs within the context of a global economy that is, in many ways, structurally biased against the developing world. This is particularly the case in regard to international trade. Developing countries need to work together to promote fairer trade with increased access to the markets of the industrialised nations. The agreement to launch a new multilateral trade round under the auspices of the World Trade Organisation is an important development in this regard. In recognition of this, the DTI has invested in the creation of greater capacity to support South Africa's participation in the trade negotiations.

Other initiatives in strengthening South Africa's position in the global trading system include the establishment of a new commission for international trade administration, and work on trade agreements with countries with large domestic markets such as Nigeria, India and Brazil. Regional economic integration will remain on our agenda.

STRATEGIC PARTNERSHIPS FOR DELIVERY

In order to promote efficient delivery to our customers, we are developing strategic partnerships for delivery with a range of stakeholders including provincial departments and metropolitan councils. We are also seeking to develop such partnerships for delivery with trade unions, NGOs and the business community. We also plan to build closer working relationships with our SADC counterparts to learn from each other and promote regional economic integration.

The DTI will achieve these priorities by effectively utilising the resources of the DTI Group. The DTI Group consists of fifteen agencies reporting to the DTI, including development finance institutions like the IDC and Khula, regulatory agencies like the competition authorities, and service providers like Ntsika. Approximately 40% of the DTI's budget is transferred to these agencies and a council has been established to strategically align these agencies behind the objectives of the DTI.

Issued by Ministry of Trade and Industry

14 February 2002