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Illegal activity threat to SA economy

Feb 24 2011 15:44 Sapa

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Cape Town - The so-called illicit economy is much more of a threat to South Africa's regular economy than previously thought, Trade and Industry Minister Rob Davies said on Thursday.

There was the question of illegal imports which were damaging industries and jobs, he told a media briefing at parliament.

But there were also a number of other attempts at illegal activity which were important.

One could cite company hijackings, which was a form of identity theft.

There was intellectual property piracy, which was particularly damaging to the South African music and film production industries.

"There are all sorts of other kinds of activities that are going on, and I think our understanding is that quite a lot of this is being conducted by increasingly sophisticated international-linked criminal syndicates," Davies said.

When one thought about intellectual property piracy, one perhaps thought that this was "some little street trader".

"Well, that is the one who sells the stuff; who produces it is a criminal syndicate probably also involved in abalone smuggling, drug dealing and things of that sort."

That was the nature of the problem being faced, he said.

The cabinet had decided there would be an intensive interaction between the economic cluster of ministers and the criminal justice cluster regarding the illicit economy.

"I think we have a better understanding of the nature of the problem.

"It's linked, I think, very much to the (draft) immigration (amendment) bill, because a lot of the people involved in this are probably also illegal immigrants coming into South Africa, involved in illegal acquisitions of property used for various nefarious purposes and so on.

"And I think what you can anticipate is that we will be working intensively on this issue, but also I think smarter and more effectively as we move further forward," Davies said.

On the example of the illegal imports, there had been a lot of inputs from the industry.

"We're working on this matter and I think that we're looking at ways in which we will become much more effective in combating the totality of this menace.

"Because what it does is it costs us jobs, and in fact if we're more effective we will save a considerable number of jobs in the South African economy."

Asked about the extent of the illicit economy in monetary terms, Davies said: "Being illicit, they don't report to Stats South Africa, they don't submit VAT returns, so to measure the size of it is a little bit difficult.

"But I think that what we are becoming aware of is that it is probably more of a threat than we thought it was in the past, and in that regard we're stepping up our work to combat its negative effects on job creation and on legitimate business activity in this country."

It was much more that illegal imports. It was a whole range of other activities which were harmful to productive activity in South Africa, Davies said.
rob davies  |  sa economy


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