Too much promise, too little action

19 Oct 2012 - by Ed Richardson

There is no doubt that the
Eastern Cape is a region
of great promise. It has
three ports, two industrial
development zones, vast
agricultural potential,
a globally competitive
automotive industry – and
not much else.
As the home of the
Struggle, the Eastern Cape
was punished by being
pretty much ignored by the
National Party.
Its two homelands –
Ciskei and Transkei – were
propped up economically
through generous incentives
that attracted Taiwanese
and other manufacturers to
rural towns.
Post 1994 the incentives
were dropped, and the
businesses moved on to
more profitable climes.
Unfortunately, all that has
taken their place in the
Transkei and Ciskei is an
economy based largely on
government grants.
The job creation
potential of the Coega and
East London Industrial
Development Zones (IDZs)
has also been limited by
the unwillingness of the
Department of Finance
to provide meaningful
incentives.
In a world with
hundreds of IDZs and
their equivalents offering
generous tax holidays to
investors, in addition to
competitive logistics, cheap
land and skilled labour,
the two IDZs face serious
handicaps over which they
have little control.
Ironically, therefore,
it can be argued that the
ANC government is doing
less than the previous
regime to create and
sustain jobs.
Yes, billions have been
invested in the IDZs and
the port of Ngqura, but that
is not enough.
Economic growth in the
old Transkei and Ciskei,
as well as the new Buffalo
City Metro, is stymied by
logistical isolation – the
port and rail links are
outdated.
So much so that
shipments in and out of
East London are routed
through Port Elizabeth,
over 300 kilometres away.
Without government
intervention through its
parastatals, the region is
condemned to economic
stagnation at best.
The situation in the
western half is a little
brighter, with some
investment flowing in for
Ngqura and its supporting
rail infrastructure from the
Northern Cape. However,
compared to the billions
being spent on the Durban-
Johannesburg corridor
and infrastructure, it is
minimal.
It is not only central
government that has an
approach best described
as “benign neglect” to the
Eastern Cape. Corporates
also tend to regard their
Eastern Cape branches
and facilities as the poor
cousins.
Pinning down the
reasons for the inability
of the province to turn its
huge potential into action
and delivery is difficult.
But, essentially, it boils
down to lack of leadership.
Eastern Capers are way
better at bemoaning their
lot than taking control
and lobbying and fighting
for what is needed. This
malaise is found at the
political, corporate and
social society levels.
But, dig a little and one
finds businesses led by
managers who are in the
Eastern Cape because they
want to be there – and
who are running good
operations by exploiting
the weaknesses and
strengths.
Some are featured in this
focus on the Eastern Cape.
Their innovative
approaches have the
potential to disrupt the
logistics industry way
beyond the borders of the
province.