Trading our way out of trouble

Finance minister Pravin Gordhan says government is committed to helping business become more competitive internationally in order to trade the country out of the recession and create jobs. Delivering his mid term budget policy speech, Gordhan quoted from a recent report by the Commission on Growth and Development chaired by Professor Michael Spence, which said one of the key strategies followed by 13 countries that had expanded national output and incomes by over 7% a year for at least 25 years was that “they fully exploited the world economy… They imported what the rest of the world knew, and exported what it wanted”. Gordhan added: “To succeed in global markets requires South African firms to achieve new levels of productivity on a continuous basis. This quest has to be supported by effective public policies and public institutions.” Questions that Cabinet would be addressing include “what kinds of investment will contribute to more rapid poverty reduction, and to a more balanced distribution of income and opportunity?” and “how should we adapt to changing global trade opportunities, the realignment of east-west and north-south relations and the extraordinary dynamics of product innovation and technology change?”. As a first step, “we are further relaxing the approvals required for investing in Southern African Development Community (SADC) countries”. Gordhan also promised “increases in the rand thresholds applicable to outward investments by South African companies”, and “removal of various restrictions on rand conversion of export proceeds and advance payments for imports”.