SPEECH BY HELEN ZILLE
MAYOR OF CAPE TOWN
WELCOME ADDRESS FOR ACCELERATE CAPE TOWN’S VISION 2030 FORUM
29 AUGUST 2009 - VICTORIA JUNCTION HOTEL, GREEN POINT, 10H00
On behalf of the City of Cape Town I would like to welcome you to the launch and opening
workshop for Accelerate Cape Town’s “Vision 2030”.
I thank Accelerate Cape Town, and everyone who has joined us today, for showing your
commitment to making this a world class city.
We have reached a critical point in Cape Town’s economic development.
We have all the right ingredients to be a global player – quality education institutions which
turn out the skills needed in the contemporary knowledge economy, a strategic position for
international shipping and oil and gas services, well established harbour infrastructure, good
agricultural land, some of the best tourist attractions and facilities in the world, and links to
international fibre optic networks.
But in January last year the Mail & Guardian newspaper published a story by Jocelyn
Newmarch with the headline “the Death of Cape Town?”
It reported on Old Mutual’s decision to move its headquarters to Gauteng, which Newmarch
described as “the surest sign yet that the Cape metropole has become little more than the
visdorp its detractors make it out to be.”
At the time, several other large companies had decided to make a similar move.
We have seen this pattern elsewhere in the world.
Most notably, during the 1980s and ‘90s the tourist magnet Rio De Janeiro saw a devastating
exodus of corporations, capital and skills to some of Brazil’s inland cities, which had better
links to the market. Among other things, its gini coefficient dropped by about 40%.
So I read that article in the Mail & Guardian with genuine concern.
I am glad, however, to see that Vision 2030 addresses some of the key issues that it raised.
Firstly, we need to build a credible identity beyond tourism, and beyond the worst case jibe of
being a ‘fishing village’.
Tourism will always bring in a solid baseline of income, but it also risks creating a very
narrow and limited perception of our city.
Secondly, we need to get big business more involved in shaping the future of Cape Town,
rather than feeling alienated, which is why I welcome the emergence of Accelerate Cape
Town.
And thirdly, we have to find out what our unique strengths are as a city.
This is especially important in the globalised world.
We have to compete with developed cities, and with great developing cities like Dubai,
Mumbai and Beijing.
And we have to compete with Gauteng’s strategic position in relation to growing markets on
the African continent.
In both cases, there are some areas where we simply cannot keep up.
For economies of scale in labour intensive industries, we will never be able to beat China or
India.
We are also not yet attracting a large amount of Foreign Direct Investment relative to other
cities. In fact, FDI only makes up around 10% or less of the GDP in South Africa, and less
than this in Cape Town.
On the other hand, for sheer size of the local market, we are not able to compete with
Gauteng, which is also linked to the much more populated northern areas of the country.
Gauteng accounts for a third of South Africa’s GDP and 10% of Africa’s.
That is why Cape Town is home to the headquarters of about 50 large corporations, while
about 600 are based in Gauteng.
There are no easy answers to the challenge of finding our niche.
Certainly we have got some ideas.
With our relatively high level of skills per capita compared to the rest of South Africa and
Africa (including among our councillors) we have started to become something of a hub for
IT and financial services.
Our developed IT infrastructure, a high level of English fluency, and our well positioned ports
also make us well placed to serve the global call centre industry, and business process
outsourcing.
We also do well with servicing the oil and gas industry.
And, or course, Cape Town is a desirable lifestyle location, which fuels the construction
industry and real estate.
We can also go further with major public-private interventions. For example, the Mayor of
Seoul recently presented a ‘Digital Media City’ – a zone where a partnership between city and
businesses provides infrastructure and technology for the digital media. This is similar to
Dubai’s Free Zone and Media City, which has attracted enormous investments from global
media corporations.
Government linkages with key sectors, including Special Purpose Vehicles for Business
Process Outsourcing, Call Centres, Ship Repair and so on are working well in Cape Town and
we should encourage them.
But to dig deeper, think harder, and find the things that we can do better and/or cheaper than
our competition will require a new level of creativity and collaboration.
Up until now, we have seen several attempts to forge strategies for economic growth in Cape
Town and South Africa.
The Department of Trade and Industry, for example, has defined a number of national focus
sectors that it seeks to support in the manner of the developmental state approach most
famously adopted by the Japanese Government after the Second World War.
Unfortunately, the focus sectors nearly all relate to the northern sections of South Africa, and
are not as relevant to our unique and somewhat isolated situation.
They also do not take into account the very limited nature of the South African state’s
capacity to fulfil the role of being a developmental state. This model worked in Japan because
it had a meritocratic bureaucracy, and laws that focused single-mindedly on economic growth,
rather than on redistribution and regulation. Things are very different here.
In the Western Cape, the Provincial Government also developed a Micro Economic
Development Strategy, which included the notion of a functional region as a tool to assist
with co-ordination and government planning. But, again, this was a top-down strategy, which
did not include adequate input from business, and which did not take into account the delicate
constitutional boundaries between the powers and roles of different spheres of government.
In order to move forward, we need a workable strategy that everyone involved feels they own.
I welcome the broadly collaborative nature of the Vision 2030 project.
The greater the buy-in from Capetonians, the better the chance of this vision being followed
up by real strategies, that can be implemented.
We need to build a critical mass of people and organisations that want to make it work.
This is the way to avoid complacency, where officials or businesses or politicians find
problems for every solution, not solutions to every problem.
Benjamin & Rosamund Zander, who will be speaking to you in a moment, are famous for
being champions of possibility.
It is exactly the kind of spirit with which we need to enter this process.
And, more importantly, it is the kind of spirit that the end product should engender.
I would like to take this opportunity to assure you that I will do all that I can to assist and get
the City of Cape Town on board.
As you know, our Integrated Development Plan is focused on promoting economic growth
and job creation by investing in infrastructure, and creating an attractive, highly functional
urban environment.
We are making some progress in this regard, having tripled our fixed investments in public
infrastructure over the past two years.
We are also investing heavily in a new public transport system which, if it is fully
implemented, will put 75% of Cape Town within 500 metres of public transport by 2018.
These kinds of projects are our contribution to the cause of making Cape Town a world class
economy.
But I suspect that with your input, we can find many other ways to fine-tune and target our
interventions for even greater effectiveness.
We have already learned a lot about some of the major blockages to investment in Cape Town
through the recent WESGRO investment constraints study.
And we have engaged with various representatives in business around the city.
I look forward to working with Accelerate Cape Town, and everyone else involved in the
Vision 2030 project.
And I would like to wish everyone well for the rest of today’s programme.
I thank you.