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In certain respects, Cape Town is already a world-class city.

The fact that we have been chosen as a key destination for the 2010 Soccer World Cup, the biggest event of any kind in the world, is certainly evidence of this.

Our region is also one of the planet's top tourist attractions.

We are one of the most culturally diverse cities anywhere.

And we are home to internationally recognised universities and technical colleges, which turn out the kind of skills that the global knowledge economy demands.

But the most fundamental test of whether Cape Town can be called world class is whether we can compete in the global economy with other cities of a similar size.

There is growing consensus across the political spectrum that Cape Town must reach a sustained economic growth rate of around 8% per annum before we can do so.

It is also generally accepted that this growth must be driven by private and public sector investment, and by adequate education at all levels.

If we achieve this higher growth rate, we will see the beginning of a virtuous cycle: there will be more business and work opportunities, higher living standards, and empowerment of the poor across a broader base, which in turn will attract more investment and create more growth.

At the moment, however, we are stuck in a rut.

Over the past ten years the city's economy has only grown at an average of about 4% per year, and unemployment has hovered around 26%. This is our biggest challenge.

The high levels of poverty, together with sustained political volatility, the highest level of nett migration of any city in the country, and a history of race based inequalities, have created mounting developmental challenges.

Among other things, our growing population has led to a city wide housing backlog of 400 000 units, a figure which grows by around 16 000 per year.

So far, there are 285 informal settlements around Cape Town as a result of the housing shortage.

The growth in population is straining the city's ageing sewerage, electricity and water infrastructure.

And our roads are becoming increasingly congested.

Getting Cape Town out of its economic rut requires government to create an investor friendly environment.

Each sphere of government (local, provincial and national) has a specific job to do to in this regard.

On the one hand we share the responsibility of ensuring that we eradicate corruption in government.

On the other, we have to fulfil our specific governance and delivery functions, functions which are set out in Schedules 4 and 5 of the Constitution.

In terms of the Constitution, some of the steps that need to be taken to speed up growth, such as relaxing onerous labour regulations and forex controls, improving standards of education, and putting an end to the provincial ANC's repeated undemocratic attempts to grab power in the City, are out of the hands of local government.

Other roles, such as crime fighting, are shared functions, where we have a very limited role to play.

But there are things we can do, and our job is to do those things properly and on time.

We have identified infrastructure-led economic growth to promote job creation as the municipality's key role.

We have already begun to build new electricity sub-stations and distribution lines so that business, industry and residents will not be plagued with recurring power outages in the years to come.

We have also started work on building bigger wastewater treatment works.  Housing and industrial developments are currently being held up because of sewerage capacity shortages, and if this continues, the City's development with be stunted.

We are in the process of building new bulk road and transport infrastructure, and upgrading existing infrastructure, so that businesses can operate efficiently and cost effectively.

And we are putting systems in place to accelerate the delivery of housing opportunities by releasing serviced sites and bringing in the major banks to finance housing in the low-income market.

These are some of our core functions in terms of the Constitution.

In order to perform them well, we are improving the staff structures and capacity of the City administration, and increasing transparency and accountability in everything that we do.

In order to reach beyond the limits of our budgets and capacity, we are also seeking to work with the private sector.

By simply fulfilling our core functions, we will do more to attract investment and improve the lot of our people than through any other means.

Unfortunately, we still have a long way to go in this regard.

Our top priority is economic growth and job creation, but the red tape and legislative hurdles that currently exist in the City of Cape Town are actually more of a hindrance than a help towards achieving that goal.

To give just one example, there is a serious shortage of industrial land in this city.  In Atlantis, for example, which struggles under a massive burden of poverty and unemployment, the Council owns vast tracts of land in the industrial area.

Industrialists are crying out for that land and our government tried to speed up the process of putting it out to tender, not for land speculators but for the many people who actually want to expand their factories or build new ones, so that we create real jobs for real people.

But the City could not even put a piece of land out to tender within 9 months due to administrative delays and a lack of staff capacity.

With this in mind, one thing is clear.

We cannot try to be all things to all people. We simply have too many challenges to address before we can even get our most basic functions right.

Unfortunately, political populism often tempts political office bearers to stray from their core responsibilities.  This has especially been the case in Cape Town, where, to this day, side shows around airport name changes and public extravaganzas have often taken precedence over real delivery issues.

Following a Presidential imbizo in 2005 to deal with the poor state of delivery in Cape Town, the ANC government produced a rescue plan entitled 'A Proposed Agenda for Action'.  This document, driven by the Presidency, states that under the ANC in Cape Town 'a "hit parade" culture has predominated with a shifting series of flawed high profile initiatives, but no sustained implementation and follow-through'.

In this regard, we must also learn from the policy failures of projects such as the N2 Gateway, which promised 20 000 houses by last year but which delivered less than 2000, and which tied up most of the city's readily available housing land.

This project slowed down the overall provision of housing opportunities in the city, and demonstrated that the state cannot solve the region's housing crisis on its own.

The 'Proposed Agenda for Action' also identifies another key problem with governance in Cape Town: the failure to maintain services and infrastructure.

It states that 'there has been a systemic under investment in the core urban infrastructure needed in a context of urban growth and intensified global competition.  This under-investment is particularly pronounced in the transport area, but is also true of waste [disposal] and energy'.

This has been made worse by four years of below inflation rates and tariffs increases by the City of Cape Town, and a failure to act against those residents who can pay for services but won't.

It has now become clear that political expediency and populism come at a very high price in the long run.

With the release of the City of Cape Town's 2007/8 Draft Budget, we have put forward a proposal to increase state investment in infrastructure and services considerably, which is intended to attract, in turn, further job creating investment from the private sector.

We believe that we cannot afford to delay this process.

Our City is at a point where it can either slide backward by delivering on fewer and fewer of its constitutional mandates, which will invite economic depression and deepening poverty, or it can begin to see growth in its key industries.

By fulfilling our core constitutional mandates, we intend to encourage the latter.

Cape Town already has a solid economic backbone of tourism, services, agriculture and construction, but there is scope for our city to become Africa's main information technology hub, a centre for business process outsourcing, and an established link in global supply chains.  Local Government can help in this regard by improving access to information technology and by cutting red tape for businesses.

We also have a well positioned commercial port, which is being upgraded, and which will enable us to benefit from the up-and-coming West African oil and gas industry.

These are all factors that improve Cape Town's chances of reaching a sustained economic growth rate of 8%.

The huge investment of about R6bn in transport and other infrastructure from National Government in preparation for the 2010 World Cup will do a lot to get us started down that road.

But the City will not receive those funds if we do not host a 2010 semi-final, and it is therefore tragic that some people in Cape Town wish to de-rail our 2010 preparations at this stage.

Apart from infrastructure investment, 2010 has also put Cape Town and the rest of South Africa in the spotlight, giving us the chance to shake off some of the Afro-pessimism that still discourages investors both in and outside of our borders.

Within our City, it also has the potential to focus our citizens on making Cape Town a global player.

In this politically charged city, it might benefit us to remember that the real competition is out there, beyond our borders, in the global market place.

Until we accept that reality, we run the risk of fighting among ourselves while the rest of the developing countries in our league leave us in the dust.

Of course, if we succeed with raising Cape Town's performance over the years ahead, we also need to be prepared for the increased challenges that come with success.

The more job opportunities that are created, and the higher the standard of services we implement, the more people seeking a better life will be drawn to the city, which will put still further strain on our resources and push the demand for land up even further.

In addition, with increased growth and development comes an increased burden on the natural environment that is valued by residents, visitors and the tourism industry alike.

One need only look at the water and air pollution in rapidly developed cities such as Taipei or Ho Chi Minh to see the terrible price paid for their industrial success.

These challenges mean that the relevant government departments and leaders will have to keep on adapting, and never stop raising their game.

That is what it means to be a world class city.

Helen Zille is mayor of Cape Town.
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