Business, govt must partner to curb effects of economic crisis

Friday, March 13, 2009

Johannesburg - Business and government must partner together to mitigate the effects of the current global financial down-turn, especially in countries like South Africa.

"During this current economic climate, countries [including South Africa] are likely to batten down the hatches and protect our own interests, but what we need to do is cooperate and rise above this economic crisis," said Business Trust Chief Executive Officer Brian Whittaker on Friday.

Speaking at the release of the organisation's 2008 annual report, the Mr Whittaker said that the Business Trust, through its various programmes and projects, aimed to limit the affect of the global recession on the poor and mitigate its effects on the economy.

He said capacity in the economy and in government must to be built, while simultaneously developing key sectors where the country can be competitive, he said.

The Business Trust, which is run by a board comprising various cabinet ministers and captains of industry, is involved in a number of projects including the Tourism Enterprise Partnership (TEP), Business Process Outsourcing (BPO), the Expanded Public Works Programme (EPWP), Joint Initiative for Priority Skills Acquisition (Jipsa), and Support Programme for Accelerated Infrastructure Development (SPAID), among others.

The Business Trust is funded jointly by government and big business in South Africa, and in 2008, the organisation's income grew from R100 million in 2007 to R136 million.

"Earnings from cash investments rose from R17 million to R21 million, and the level of funds paid to projects increased from R94 million in 2007 to R160 million in 2008.

"Cash funds available for projects rose from R231 million to R268 million, while retained income at the end of the year dropped from R198 million in 2007 to R194 million in 2008," Mr Whittaker said.

For the year 2008, government made a contribution of R71 million, while business contributed R65 million, with an additional R21 million accrued through interest, the chief executive reported.

For the period 1999 to 2010, government will have contributed a cumulative amount of R351 million, business R1.163 billion, and interest earned would account for R207 million.

One of the most notable successes in which the Business Trust has been involved is the EPWP, Mr Whittaker said, in which one million work opportunities were created ahead of schedule.

The Business Trust's support for the EPWP had been in place since it got underway in 2004, and has provided a partnership approach, business perspective and discretionary resources that helped with the achievement of the programmes result.

The BPO sector, which involves call centres and the training of individuals to handle after sales cliental care is an industry South Africa has the capabilities to compete in globally, and as such, government through the Department of Trade and Industry and the Business Trust have focused on expanding this sector.

As part of the Accelerated and Shared Growth Initiative of South Africa (Asgisa), tourism and the BPO sector were placed at the helm of investment and job creation strategies.

To date, 15 649 jobs have been created in the BPO sector as part of the Government Assistance and Support (GAS) programme, and investment of over R1 billion by 16 investors over a period of 18 months was committed.

With regard to Jipsa, Mr Whittaker said, the organization was pleased with the recent signing of an agreement by industries which sets targets for the number of engineers and artisans needed to grow the economy.

"We need to identify opportunities during this very difficult time in the global economic environment and work together to take advantage of these opportunities," the chief executive said.