Strategies for industrial development

Apartheid industrial development strategies The policy of apartheid meant that SA was to be a ‘white’ republic in which black people did not play a role. Black Africans had to live in ‘homelands’ – ‘Bantustan’ policy. Homelands had few opportunities. Border industries were introduced with incentives like tax concessions, labour concessions and transport subsidies. After 1994 many of these industries were unsustainable and closed

Apartheid industrial development strategies

Post-apartheid strategies Different strategies aimed to improve economic, political and social development of South Africa The main aim is to develop less developed areas in SA The main industrial initiatives are the Spatial Development Initiatives and the Industrial Development Zones

Post-apartheid strategies – The GEAR strategy GEAR – Growth, Employment and Redistribution. This policy was put in place from 1996 – 2003 It aimed to create a fast growing economy and sufficient jobs. The GEAR succeeded in attracting foreign investments and increasing demand but failed to reduce poverty and unemployment. BEE (Black Empowerment) and Asgi-SA(Accelerated and Shared Growth Initiative South Africa) are part of GEAR.

Post-apartheid – The BEE policy BEE – Black economic empowerment policy The BEE began in 1995 It was introduced to rectify inequalities by giving economic opportunities to disadvantaged groups.

Post-apartheid – Accelerated and Shared Growth in SA Asgi-SA was introduced to achieve economic growth and to halve poverty and unemployment by 2014.

The Spatial Development Initiatives The Spatial Development Programme (SDI) are used to initiate and support a series of development corridors stretching across parts of SA and in some cases, other countries. The SDI’s are an extension of the existing GEAR policy, which focused on growth, employment and redistribution.

SDI’s aims To promote growth in those parts of SA that are underdeveloped but have the potential for growth. To developed and improve existing transport infrastructure To create an attractive environment for private sector investment To initiate and support economic activities along transport corridors.

SDI’s – Transport corridor examples Maputo Development Corridor (which helped agriculture, transport, mining, tourism and port development) Wild Coast and Lubombo SDI’s (helping agriculture and transport infrastructure) Fish River SDI’s ( helping agriculture, manufacturing, tourism and port development) Platinum and Coast to Coast SDI’s (supporting transport corridor)

Industrial Development Zone concept The Industrial Development Zones (IDZ) concept was founded in 1996 These are the core within SDI’s The plan is to develop and upgrade the infrastructure and services that are needed to make the towns involved world class competitors with modern industrial zones

IDZ’s IDZ’s are either in ports or near airports The government offered some incentives to new investors as well as offered assistance to the IDZ’s by developing new road and rail links where needed By 2012, three IDZ’s were operating: Richards Bay, East London and Coega ( which is the most successful one) The costs of IDZs are high. The government contribute to investment and to attracting foreign and domestic private/public investment by creating very good infrastructure. This infrastructure includes roads and railway connections and building harbors.

Issues with industrial Centralisation Centralisation is the concentration of industries in urban areas. It refers to the fact that there must be something on the surface that is attractive to people. Can lead to uneven distribution of wealth, opportunities and development. Centralisation in SA has occurred around four industrial core regions (Gauteng, Durban-Pinetown, PE, CT) The problems with industrial centralisation include lack of housing, lack of piped water, lack of jobs and traffic congestion. On the positive side, industrial centralisation of economic activities provides competition for goods and assists businesses.

Issues with industrial Decentralisation Decentralisation was started in 1948 by the national party and was ended in 1994 at the end of apartheid. It was used mainly as racial segregation making it hard for black people to move to from rural to urban areas as well as forcing urban black people to go back to rural areas. After 1994 , apartheid laws fell away. South Africans can now decide where they want to work. SDI’s and IDZ’s create job opportunities, but it is in underdeveloped areas, where there is a lack of hospitals, entertainment, universities, etc. People prefer not to live there.

Maputo Development Corridor SDI: Case Study This is the largest and the most successful development corridor in SA. It connect SA’s economic hub Gauteng with Mozambique's capital, Maputo. The corridor also has links to agricultural products and minerals of Mpumalanga and Limpopo.

Maputo Development Corridor SDI - Achievements: Case Study The reconstruction of the Maputo N4 toll road Better customs posts at the boarder for quicker transits Expansion The new Mozal aluminium smelter near Maputo with a capacity of 500.000 tons a year A gas pipeline from Mozambique to Secunda, Where Sasol converts natural gas to diesel and aviation fuel.

Maputo Development Corridor SDI – conclusion: case study The successful MDC is an example for other SDI’s A reason for its success was the efficient NGO overseeing all aspects of the initiative.