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10 February 2009

Madam Speaker
The Honourable President of the Republic of South Africa, President Kgalema Motlanthe
Honourable Members

We have a proud and rich history of struggle for freedom and inclusivity. We have every right to evoke it in our noble quest to champion a better life for all our people. What more, it is an objective, documented and well researched history.

Frieda Bokwe Matthews, the first black girl to pass junior certificate in South Africa who later became one of the few black women to graduate as a teacher from the then College of Fort Hare recalls in her simple and profound prose. "Well do I remember the day my husband and sons, with us concurring, first mooted the idea of a Congress of all the people of South Africa regardless of colour or race or party politics, coming together to discuss the possibilities of a non-racial constitution, one which would recognise that South Africa is multiracial, that all its peoples have contributed to its development."

Gratefully, today, we have a Constitution, which is second to none in the world. We owe our forebears and unsung heroines of our struggle like Frieda Bokwe Matthews gratitude for their vision and invaluable sacrifices. The prophetic and fascinating imagination of Ma Matthews shines through in her memoirs, entitled Remembrances which she started writing, according to the introduction by Janet Hermans, during a lonely and stressful period of her life, when both her husband, ZK Matthews, and her son, Gaobakwe Joseph Matthews, were detained during the Treason Trial in the late 1950s. Ma Matthews reminisces about her vision of a convention of the people that would chart a peaceful, prosperous, non-racial and democratic South Africa from the ruins of apartheid.

She writes, "The thousands would camp out and make it truly South African by using our wide open spaces. Where better than in Thaba Nchu? I put my views to the family, and the girls thought them exciting. The men-folk had reservations, we were going too fast, they said. It was innocently conceived as that. And yet there is no doubt that the Nationalist saw a deep-laid communist plot, inspired I have no doubt by communists in America and brought to South Africa by my husband."

Her mere mortal fault is that the Congress of the People that she and others in the Congress Movement envisaged and conceptualised in 1953 eventually took place in Kliptown in 1955, but not in Thaba Nchu. Thankfully, today, we have the Freedom Charter as our immortal policy lodestar which exhorts us all to uphold democracy. The Charter further proclaims, "The people shall share in the wealth of the country." We dare not abandon the poor. They are most vulnerable through no fault of theirs.

The current global financial crisis and the resultant economic meltdown pose a serious threat to the world economy including ours as we are a significant part of the world economy. Ours is the biggest economy in the continent of Africa. Moreover, South Africa is not an island insulated from the capricious vagaries of market forces. As a responsive and democratic government, sensitive to the plight of the private sector and businesses that remain the engine and drivers of our economy together with our other key stakeholders, our government has already stepped up to the plate.

The role of the state in the economy is no longer a matter for debate. However the state is not going to parachute in solutions to a global crisis and a societal problem. In his State of the Nation Address, the Honourable State President Kgalema Motlanthe made bold to say, "I am happy to report that in the interactions between the Presidency and leaders of various social partners, we agreed jointly to devise interventions that would minimize the impact of this crisis on our society. The task team dealing with these matters is still hard at work."

The proactive measures outlined by our State President, Kgalema Motlanthe in steering our economy through the turmoil and turbulence of these challenging times, deserve our unqualified and all-round support. Clearly, our government is well poised and ready to exercise leadership in these trying times.

As a responsive and democratic government steeped in the traditions of our forebears and alive to the frailties and vulnerabilities of the poor, our strategic intervention in mitigating the looming havoc and hardship portended by the global financial crisis cannot be questioned.

Madam Speaker, I am neither going to dwell much nor elaborate on the announcement made by the State President, save to expatiate on the implications of the present crisis to the minerals and energy sectors of our economy and our government's leadership in mobilizing an inclusive and commensurate response thereto. I will be the first to concede that our response is neither definitive nor exhaustive, but is rather, work in progress.

At the whiff of the sudden implosion of the global financial crisis at the end of the third quarter of 2008, it became apparent that the ramifications thereto would be severe. Mining operations were in jeopardy as mining companies fell under financial distress with resultant retrenchments of mineworkers. Government took the lead in instituting a Task Team comprised of the triumvirate of DME representing government, labour and the private sector represented by the Chamber of Mines. The Task Team was entrusted with the responsibility to fashion an intervention to mitigate the severity of the crisis in the mining industry and to develop recommendations that will ensure optimal development of the mining industry post this crisis.

Our unwavering commitment as a democratic and responsive government as clearly articulated in our policies is not merely confined to promote economic growth but also to create sustainable jobs to combat poverty and reduce inequalities in our society. Already, the Task Team released an interim report on the 18th of December 2008, highlighting a number of consensual short term recommendations intended to minimise the job losses and propose alternative to retrenchments in the mining sector, amongst many others. Our mantra still remains freedom and inclusivity.

It is crystal clear that the role of the state has to go beyond the regulatory function and extend to playing a strategic role in exercising leadership and facilitating a developmental trajectory for our economy. Our industrial development agenda demands no less, the latter being the topic I have to explore today.

Madam Speaker, it is worth mentioning that our macroeconomic policy priorities have evolved to the extent of placing the state at the centre of development. We are not apologetic about that as evidenced by our massive public sector investment in public infrastructure, expanded public works, larger and reformed social security system.

In advancing our industrial development agenda, the role of minerals beneficiation cannot be overlooked. Our beneficiation strategy will not only advance the objectives of Accelerated Shared Growth Initiative for South Africa (AsgiSA), the Mining and Petroleum Resources Development Act (MPRDA), the Precious Metals Act and the Diamond Amendment Act and energy growth plans, amongst others, but also compliance with the Kyoto protocol. Implementation of this strategy will create hundreds of thousands of jobs and contribute to economic growth.

Energy poverty is a grim reality to many of our people who are still trapped in poverty and underdevelopment. Access to affordable energy is fundamental for a developing economy. The provision of energy is a prerequisite for socio economic growth and development. The reliable supply of affordable electricity and other energy carriers is critical for industrial development, employment and poverty alleviation in our country. Power outages and energy poverty militates against development. Renewable energy must be key to energy generation, but most importantly, the technology for renewable energy must be manufactured in South Africa. That would create the necessary industrial capacity. As Davos also suggested that the stimulus packages that countries will be embarking on must have a green package.

In the light of the energy challenges that confront us, government has devised and implemented an emergency response plan which makes mandatory provision for incentives and support programmes that are aimed at increasing energy efficiently. This plan has already borne fruit, as the gross domestic product (GDP) growth has grown from 2,1% in the first quarter of 2008 to just under five percent in the subsequent quarter.

The plan is an interim measure intended to make provision for economic growth to continue on the basis of improved efficiencies in energy consumption in the short and medium term, whilst enabling us to increase our reserve margin by strengthening our energy efficiency measures whist at the same time bringing on stream new capacity in the medium to long term.

Key solutions being investigated by the National Energy Task Team (NERT) include the implementation of demand side management initiatives to reduce overall demand by 10%. The Power Conservation Programme (PCP), Demand Side Management (DSM) and co-generation form the pillars of the national demand management strategy.

Until sufficient new plant capacity is commissioned, the electricity challenges remain a reality. The next few years are crucial in the successful execution of the build programme. The speedy implementation as well as the restructuring of the distribution sector cannot be overemphasised. In the meantime, we must intensify our demand side management efforts, as demand reduction will be the only real differentiator in the short to medium term. It is important for all South Africans to make a real effort to reduce their electricity demand, while cogeneration guidelines are still in the pipeline.

Kindly allow me, Madam Speaker, to make a clarion call to energy-intensive industries like smelters and other value addition processes to establish cogeneration power plants from their vast heat and gas producing processes. The economic meltdown will come to pass.

It is not a permanent feature. What becomes important is how we position ourselves to take advantage of the economic upswing when that situation arises. The FIFA 2010 Soccer World Cup Tournament is a case in point. It is a major event that has given impetus to plans that were already underway. Plans to reconstruct and develop our economy and society as driven by our energy demands and skills base.

In the process of developing our capacity we must prioritise the rural areas to ensure that we deliver the infrastructure necessary to entice investors, i.e. roads, water, electricity and telephony. This will assist us to bridge the rural-urban divide.

Madam Speaker, it is fitting to tap into our proud and rich history for inspiration and guidance, particularly when confronted with vexing challenges like ours. Solomon Tshekisho Plaatje, the author, journalist, political activist and one of the founder members of the South African Native National Congress, (later the African National Congress) travelled to Aliwal North to deliver the presidential address at the at year-end Cape Native Voters’ Association during the severe economic depression of the early thirties, in December 1931, to be precise.

His message and wisdom are prescient and relevant today as they were 78 years ago. He is quoted by author, Brian Willan in his biography entitled, Sol Plaatje as saying, "If standing shoulder to shoulder, with a pull together, we can make manage to keep South Africa solvent , we surely could combine in our interest, for that power lies in our hands."

I thank you.

Issued by: Department of Minerals and Energy
10 February 2009