(AsgiSA) Annual Report 2008 - South African Government Information
(AsgiSA) Annual Report 2008 - South African Government Information
(AsgiSA) Annual Report 2008 - South African Government Information
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
Accelerated and Shared Growth Initiative for <strong>South</strong> Africa<br />
ANNUAL REPORT<br />
<strong>2008</strong><br />
6.4 Priorities for 2009<br />
The main priority for 2009 will be to ensure a robust response to the international downturn. From the<br />
standpoint of industrial policy, three core tasks stand out:<br />
• Maximising the multiplier effect of public investment by enhancing local procurement. That, in turn,<br />
requires a review of practices in both the <strong>Government</strong> and SOEs. A central challenge is to support<br />
local production to meet quality requirements at an affordable price, for instance by providing sufficient<br />
notice, as well as securing adequate financing and technical assistance to gear up for new<br />
products.<br />
• Identifying sources of bridging finance for companies that, although severely affected by the downturn<br />
in the short run, have the potential to contribute to economic growth in the longer run. This<br />
process requires both clear criteria and the capacity to assess enterprises on a case-by-case basis. A<br />
related challenge is to ensure that the banks do not cut back unduly on credit to viable companies.<br />
• Reviewing sector strategies together with stakeholders to ensure they respond adequately to the<br />
new challenges (and opportunities) arising out of the downturn, most of which relate to a – hopefully<br />
fairly short – fall in international and domestic demand.<br />
At the same time, it has become increasingly clear that industrial policy interventions require a stronger<br />
system for planning government actions.<br />
From this standpoint, as <strong>AsgiSA</strong> notes, the biggest weakness has proven to be around the provision of<br />
infrastructure to support more inclusive development and sustained economic expansion. Specifically,<br />
infrastructure has to be provided in ways that meet the needs of economic actors, particularly in industries<br />
that can create employment opportunities on a large scale or that play a central role in economic<br />
growth. A major obstacle to this process is the fragmentation of infrastructure provision between different<br />
spheres of government under the Constitution, combined with a plethora of independent regulators.<br />
Particularly serious shortcomings have arisen around the provision of infrastructure for agriculture<br />
and mining, especially freight transport and electricity.<br />
67