SONA and the WHERE of growth and jobs

Yesterday evening President Zuma delivered the State of the Nation Address. When one considers the state of a nation you need to mention a number of things. He started with the familiar challenges of unemployment, poverty and inequality. He mentioned that unemployment is structural and made the case that government have been taking steps and will be taking steps to meet the challenge. These steps include increased spending on social security, infrastructure development to stimulate the economy and the establishment of the National Planning Commission. President Zuma also reviewed some of the progress on the undertakings made in last year’s SONA – it is easy to forget about the Jobs Fund, incentives for new industrial projects, local content procurement regulations and the R10 billion that the IDC set aside for job creation. The president’s overview shows that these things take time to get going, never mind produce any results and I think that this is a key point to keep in mind about this year’s promises.

The address identified a number of key issues for 2012. These are being discussed everywhere (see Carien du Plessis’ list) and I do not want to get into all the details again. The list includes:

• An infrastructure development drive

This is driven and overseen by the Presidential Infrastructure Coordinating Commission. It includes five geographically focused programmes and social infrastructure programmes. The argument is “The massive investment in infrastructure must leave more than just power stations, rail-lines, dams and roads. It must industrialise the country, generate skills and boost much needed job creation”.

• The extension of basic services, including housing, housing, electricity costs and water supply.

• Education – where the President argued that the focus on education is paying off and 300 million rand is being allocated for the preparatory work towards building new universities in Mpumalanga and Northern Cape.

There was also mention of:

• Health

• Land reform

• BBBEE

• Crime and corruption

With something as broad as the state of a nation there are many things to mention and commentators found their hobbyhorses in the stable: failures in education and healthcare were glossed over, crime and corruption were mentioned in passing, there was hardly a mention of SMMEs, women or the environment.

My concern is with where economic activity occurs and there are quite a few aspects that have clear spatial implications. Something like the Gauteng-Durban logistics corridor makes sense as it is already a main freight corridor, but there are serious questions about the manganese export channel through the Port of Ngqura. It is also not clear that there are sufficient agglomeration forces at work to establish a successful South-Eastern node to improve the industrial and agricultural development and export capacity of the Eastern Cape region. Government may revitalize Mthatha and add some infrastructure, but what about the pooled labour market and supplier of intermediates that an agglomeration requires? I have similar questions about the “enormous potential along the West coast. Related to the spatial story is the question of provincial and local capacity to deliver. The major infrastructure projects may be driven by PICC, but a large share of everything that the government sets out to do have be delivered at Provincial and local government level and in many aspects they are failing.

I realise that the questions cannot be answered be answered in a state of the nation address, but I do think they should be kept in mind for the Budget Speech on the 22^nd of February and for the Department of Trade and Industry’s budget vote.