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Strategies for Industrial Development


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Grade 12 Economic Geography. SA curriculum. Strategies for Industrial Development.

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Strategies for Industrial Development

  1. 1. Learning objectives Overview of apartheid and post-apartheid industrial development strategies. The National Development Plan The concept of Industrial Development Zones (IDZ’s) and their distribution. Spatial Development Initiative (SDI’s) Case study of two SDI’s Issues associated with industrial centralisation and decentralisation.
  2. 2.  In the 1940’s the Industrial development Corporation (IDC) was established by the new government to promote economic growth through developing a broad-based industrial sector.  The main aim was to ensure that SA could be industrially independent and not have to rely on imported goods from the UK and Europe.  It aimed to Provide finance for start-up industries and to bring partnerships together for larger industrial needs.
  3. 3.  Apartied was proving to be an expensive policy to implement because of the racial separation and separate development which impacted on the development of the landscape, water , health care, education, sanitation and housing..  Apartied meant South Africa was to be a “white” republic in which black people did not feature as citizens. The Bantustan policy south to place all black Africans in a “homeland” according to their ethnic identity.
  4. 4.  Up until 1970’s economic development is SA was highly centralised, occurring predominantly around urban areas.  By the 1980’s there was a shift of focus to more even economic growth and a number of growth models were proposed E.g.. The Good Hope Plan (1981)  And in 1994 the policy of apartied was abolished leaving the country with without a policy and not in a very good economic state.
  5. 5.  The unsound economic and development policies were replaced with the Reconstruction and Development Programme or RDP in 1994.  The RDP came to an end in 1998 but did achieve significant success by improving water supplies in rural villages, creating new jobs in the water supply programme and provide 400,000 new houses.
  6. 6.  GEAR – Growth, Employment and redistribution.  This policy was put in place from 1996 – 2003    It aimed to expand the private sector, encourage trade, the use of better business practises, to improve output and to increase investment. The GEAR succeeded in attracting foreign investments and increasing demand but failed to reduce poverty and unemployment. Because of these failures many favoured the BEE policy.
  7. 7.  BEE – Black economic empowerment policy  The BEE began in 1995  It was introduced to rectify inequalities by giving economic opportunities to disadvantaged groups.  It did so by increasing the number of previously disadvantaged people who manage, own and control the countries economy.  The were many critics on this policy – see Pg. 299 in Focus text book
  8. 8.  B-BBEE – Broad-based Black Economic Empowerment  Introduced in 2007  This policy was introduce to meet some of the critics about the BEE and specifies codes of good practice to measure conformity with BEE in all sectors of the economy
  9. 9.  The National Development Plan (NDP) offers a long-term perspective. It defines a desired destination and identifies the role different sectors of society need to play in reaching that goal.  According to the plan, South Africa can realize these goals by drawing on the energies of its people, growing an inclusive economy, building capabilities, enhancing the capacity of the state, and promoting leadership and partnerships throughout society. 
  10. 10.  The NDP identifies the task of improving the quality of public services as critical to achieving transformation. Provinces must focus on identifying how to overcome obstacles. This will be reinforced by local governments requirement to fulfill their role.  Planning and implementation will be followed by the national government to make sure it is on track.  The President and Deputy President will be in charge of this initiative. Premiers and Mayors will need to be visible and active participants of the plan with their offices being the catalytic agencies to drive implementation at provincial and municipal levels.
  11. 11.  The NDP and its proposals will need to be implemented in the right order over the next 17 years. Four stages have been identified as will be seen in the image.  The Government has already started a process to join the long term plans of departments with the NDP and to identify areas where policy change is required to ensure positive results.  The NDP is a plan for the whole country. Government will engage with all sectors to understand how they are contributing to implementation and particularly to identify any obstacles to them fulfilling their role effectively.  The Plan will shape budget allocation over the next 17 years.
  12. 12.  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.
  13. 13.  To developed and improve existing transport infrastructure  To correct some of the damage done by the apartheid strategies  To create an attractive environment for private sector investment  To initiate and support economic activities along transport corridors.
  14. 14.  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) For more examples go to Pg. 302 of Focus textbook
  15. 15.  The Initiatives in the previous slide are expected to increase the range of economic activities performed in each area.  This will increase the productivity and wealth of the marginal areas of SA and raise the standard of people living there.
  16. 16.  The Industrial Development Zones (IDZ) concept was founded in 1996  It was to be supervised by 2 goverment departments  These are the core within SDI’s  The plan is to develop and upgrade the infrustructure and services that are needed to make the towns involved world class competitors with modern industrial zones
  17. 17.  IDZ’s are either in prots or near airports  The goverment 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)  These IDZ’s help to minimize international trade barriers, enabling importers and exporters to operate under better economic conditions.  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.
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  19. 19.  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.
  20. 20.  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 pipline from Mozambique to Secunda, Where Sasol converts natural gas to diesel and aviation fuel.
  21. 21.  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.
  22. 22.  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.
  23. 23.  Decentralisation was started in 1948 by the national party and was ended in 1994 at the end of aparthied.  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.  The issue with decentralization was that it encouraged racial segregation and not many people in urban areas.  So now rural towns are losing people due to urban sprawl, resulting in closure of very expensive infrastructure (hospitals, schools etc.) All of this infrastructure now has to be rebuilt in major centers to accommodate for the influx of people from rural towns.