A Framework: Trade and Industry Policy

A Framework: Numsa

1. Believes that to reconstruct and develop the economy requires an interventionist state especially with regard to industry and trade policy.

2. It dismisses GEAR as being inappropriate to address the socio-economic and political ills of apartheid industrial policy.

3. We reject free market purity in favour of interventionist policies. But we do not argue for the complete removal of market forces. Market forces on their own will not build internationally competitive industries and they will not always work in the national, social and economic interest. For example, market forces may not see the value in generic education and training but rather favour expenditure on narrow short term task-specific skills. An interventionist approach could employ taxation sticks and incentive carrots to encourage industries to invest in education and training.

4. We have to move our industrial policy away from the bias towards commodity production towards a strategy for the development of more high value-added products for both domestic consumption (import substitution) and exports. NUMSA believes that current strategies (e.g. cluster studies, Spatial Development Initiatives (SDIs)) place too much reliance on existing commodity and semi-processed raw material production as the basis of industrial policy. This is particularly important as the continuing support and extension of these industries (e.g. the new Iscor plant at Saldanha) encourages capital intensive production rather than labour intensive production.

5. We will argue out our interventionist policies in NEDLAC's Trade and Industry Chamber. Some hard thinking will have to be done about which sectors offer long term growth potential and which ones don't. There are some areas where the high skill, high wage scenario cannot survive and it will be necessary to develop adjustments for these industries or sectors. Some of these sectors employ COSATU members so our attitude will have a direct effect on their employment.

6. South Africa's economy and particularly its labour market are impossible to separate from the Southern African region. Since the election of a democratic government, our regional neighbours are complaining more and more that their less protected industries are swamped with products from South Africa. There is no value for South Africa in destroying the industries in the rest of the region as the affected countries will eventually be unable to pay for South African imports and our industries will suffer.

7. Instead we should see the region as the greatest long term potential market for South African goods and services. However the potential will not be realised as long as the region is economically underdeveloped. In the development of the Southern African economies we should not only rely on private investment, but also use the potential for collective action by public enterprise (e.g. transport, utilities) to increase regional economic growth.

8. In developing sectoral industrial policies we should be conscious of the potential for co-operative development, particularly in those industries that our cost structure cannot sustain as profitable. Japan's relationships with its Asian neighbours represent a useful, if not always savoury, model of this process.

9. Practically for COSATU this means a greater emphasis on international activity in our region.

  • Authors: NUMSA
  • Year: 1997
  • Organisation: NUMSA
  • Publisher: NUMSA
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