Bail-out packages for industries in distress imminent

South African businesses in distress due to the global economic crunch may be thrown a lifeline when the fist bail-out packages emerge in the next few weeks. This is according to Rob Davies, Minister of Trade and Industry, who said the first packages were expected to emerge by mid-June and were being guided by the government’s framework response to the global economic crisis. In a recent meeting with Business Unity South Africa (Busa), which has set up a series of engagements with government, Davies said job retention remained critical for government in the tough economic times. “The reality of job losses is what led to the crisis response and we are well aware of the issues,” said Davies. “Our priority is to preserve jobs and to preserve strategic industrial capacity.” He said they had fast-tracked their response measures to address the need in several sectors that were heavily affected and were hoping to conclude agreements to deal with the distress before the end of this week. “We have been engaging with stakeholders to determine what is needed and how we can address these needs while keeping in mind that job retention is the most important aspect.” He would not give details of what could be expected only saying that the Industrial Development Corporation (IDC) would be part of the plan. Davies said sectors such as mining, clothing and textiles, automotive and capital goods had been hit really hard and that these were the industries government was targeting for assistance. Asked what was expected of these companies in return for the bail-out packages Davies said much of the financial assistance would not come directly from government and they would not be expected to pay back loans, but it would be unfavourable to pay out huge bonuses to directors and shareholders. “We will have to grapple with these issues as they come along. At the moment our immediate concern is job retention and strategic investment.” According to experts, already more than a 100 000 jobs have been lost in South Africa following the economic crunch. It is said that some 35 000 jobs are lost every month. Earlier this month President Jacob Zuma committed to ensuring 500 000 jobs would be created in the next six months.