Public entities can advance industrial development

Tuesday, June 30, 2009

Cape Town - As a result of the current economic crisis, there is more room to make use of public entities to advance industrial development, according to Trade and Industry Minister Rob Davies.

Tabling his Budget Vote in Parliament on Tuesday, the minister said the scope to make "much more strategic use" of public entities and development finance institutions, particularly those close to the dti was now available.

"There is significant scope to make much more strategic use of public entities and Development Finance Institutions (DFIs), particularly those within the dti family such as the Industrial Development Corporation (IDC), to advance industrial development," he told the National Assembly.

Mr Davies said it was imperative that the IDC continues to reorientate its activities "towards a more developmental approach to investments in strategic sectors" through providing finance at well suited rates and conditions for recipients.

This, he said, will require government to pay "serious" attention to the corporation's balance sheet as well as be prepared to consider options for the strengthening the corporation's capital base.

Regarding competition authorities, the minister said though they have taken a more "activist" role and also have imposed sizeable fines for collusion, they "have yet to act on a scale that compels compliance by large transgressors."

Mr Davies said the authorities have been successful to a degree, adding that anti competitive behaviour was still a problem the economy faces.

"Anticompetitive conduct in the economy remains disturbingly pervasive.

"The 2008 Competition Amendment Bill, which we hope will soon be enacted, will allow the authorities to proceed against individual directors or managers taking decisions leading to anti-competitive conduct.

"This will be a strong signal that we intend to enforce real compliance," said Mr Davies.