Wolfgang Thomas

When the first issue of Garden Route Investments headed its cover article "A Garden of Eden lifestyle" it reflected very aptly the image widely existing about the Southern Cape or Garden Route/Klein Karoo: a tourist mecca shaped by an exceptional quality of life. Yet, however flattering for the area, this image is far too narrow and superficial to capture the real uniqueness of the Southern Cape's economic environment and its full development potential. Tourism is but one of about a dozen significant growth sectors of the area, with the interaction of these growth forces constituting the real uniqueness of the Southern Cape - probably one of the most promising growth regions of the new South Africa and a region with only a few parallels in the World.
Let us explain this unique structure with reference to a number of dimensions.
1. Economic Geography: The Southern Cape is halfway between the Cape Peninsula and Port Elizabeth, with Mossel Bay just under 400 km from Cape Town and George just under 300 km from PE, whilst the more densely populated 'Garden Route' stretches for about 200 km along the Indian Ocean coast line. With the N2 and N12 national roads as east/west and north/south road axes and the R62 as popular inland east/west axis the area is well-accessible by road, supplemented by George's modern airport, a less streamlined rail network and limited coastal shipping facilities. Although not without weak segments - one thinks of the long delayed Knysna Bypass - this transport grid effectively links the region to the West (Cape Town), the east (PE/EL and KZN) and the north (Free State/Gauteng), as well as the rest of the world.

2. The natural and built environment: In our increasingly competitive world the natural environment or quality of life of an area has become a significant determinant of inward investments, entrepreneurial initiative and - as a consequence - economic growth. Not the raw materials of an area but attraction for enterprising people shape an area's longer run growth. The Southern Cape boasts a unique combination of fertile land, valleys and mountains in close proximity, sea and rugged as well as smooth coast line, arid veld and lush vegetation - and all of this with a mild, semi-Mediterranean climate.

Adapted to this natural environment we have a well-spaced grid of cities, towns and villages all across the region, with each unique in its own particular way and with a good balance between larger and smaller settlements - a far cry from high density metropolitan areas or poorly developed, isolated rural places which are often negatively rated in preferred settlement patterns.

3. Population, labour and skills: Including all eight municipalities, the Southern Cape/Klein Karoo has a mid-2002 population of 450 000, which is about 10% of the Western Cape's and one percent of South Africa's population. With each a populations in excess of 75 000 George, Mossel Bay and Oudtshoorn are proper cities, with their own complex growth momentum, whilst places like Knysna, Plettenberg Bay and Riversdale are towns with distinct growth momentum. Apart from these, the area has more than half a dozen small towns - Wilderness, Sedgefield, Herbertsdale, Stilbaai, Albertinia, Ladismith and Calitzdorp - with each a distinct characteristic and potential for expansion. Finally, there are a few villages, several with a long and proud history (like the old mission villages Zoar and Dysselsdorp), which could at least maintain their size with a steady improvement in living standards.

4. The approx. 110 000 households in the region create a labour supply of about 175 000, of whom about 80% are employed in either the formal or the informal sectors of the economy. In fact, during the tourism and harvesting high seasons the Southern Cape utilises additional outside contract labour. The annual increase of the population is close to 12 000, half of whom can be ascribed to inward migration from either the Eastern Cape (mostly African) or the north (mostly white/coloured). In fact, the westward migration of Africans, moving from the Eastern Cape to Cape Town, gradually reshapes the ethnic balance of the Southern Cape, making it more representative of South Africa.

Due to the relatively high level of (pre-) retirement immigrants from Gauteng the Southern Cape has a favourable skills supply, which also strengthens the growth momentum of the region. In addition, the proximity of both Cape Town and PE help supplement the ad hoc supply of local skills at minimal time delays.

5. Sector growth: Leaving aside metropolitan Cape Town, the Southern Cape has a share of 31 percent in the Western Cape platteland's Gross Regional Product and in its population. In fact, with proper measurement of informal sector contributions the GRP share could even be higher. The real significance, however, lies in the sector spread of the more promising areas of economic activity. We can briefly look at some.

Tourism: Little needs to be said, except to stress the diversity of tourist attractions of the region - from the Cango Caves and ostrich rides to luxury beach recreation and backpacking as well as fishing, mountain climbing, surfing, gliding, golfing and Waterfront strolling. It is exactly this diversity of settlement urban areas and seaside resorts that strengthens the attraction for tourists.

Agriculture: It is often forgotten just how diverse the different agricultural areas across the Southern Cape are. Sheep, some cattle, plenty of ostriches, vegetables and fruit, some field crops, intensive dairy production and even some grapes and wine are part of local agriculture. This diversity also makes for significant food or agro-processing.

Fishing: Both mari-culture and aquaculture have significant potential along the coastal belt, with the latter only at the start of expansions.

Manufacturing: Whilst the small and scattered population precludes large industrial centres in the Southern Cape, an increasingly diverse cluster of industrial niches - like petrochemicals in Mossel Bay, food processing, clothing and textiles and IT/Biotech in George and timber processing along the coastal belt - add up to at least the minimum necessary for further steady growth. With so much in modern, competitive industry depending on the quality and experience of the entrepreneur and technical leader of smaller enterprises the attractive living environment of the Southern Cape makes it possible to attract and "keep" such people in the region.

Professional Services: Modern telecommunications and IT have made it possible for suppliers of high quality professional services to operate from home or leave home only for short trips. Thus, once again, the quality of life in the Southern Cape, combined with good air and national road links, encourage professionals to settle here but operate all over the country, if not beyond its borders.

Construction: The popularity of the Garden Route for retirement and pre-retirement holiday accommodation helped to maintain a reasonably diversified construction sector, capable to also tackle other projects. In addition, larger construction companies elsewhere in the Cape - both West and East - are only too keen to tender for Southern Cape contracts, thereby creating tough competition for locals.

Retailing: The small and scattered population distinctly limits retail turnover in the area. Yet, relatively high incomes of some of the population strata, supplemented by the high per capita spending of (foreign) tourists significantly increase the relative size of the local market and have helped to attract modern retail facilities.

Property services: With a booming and rapidly expanding residential property market, the property and related business services sector in the Southern Cape is also on a growth path.

Education and Training: The region already has a number of top quality high schools and a consolidated network of Further Education facilities (the former technical colleges). The extension of PE Technikon towards a George Campus is the first step towards local "Higher Education" facilities. In addition, private training centres, branched out from larger centres in the Country, have found the Southern Cape an attractive market. This is the case even before this region has been properly 'discovered' by foreign students and educationists as an ideal environment for further and higher (private) education. Plans about an Afrikaans (Flemish supported) private university in Oudtshoorn fit as much into this pattern as the rise of various short-programme supplying institutions in places like George, Mossel Bay, Knysna and Plettenberg Bay - e.g., programmes for the tourism sector.

Public sector offices: At this stage public or parastatal sector offices located in the region are virtually all directly related to municipal, district or specialised sector needs. We don't yet find national or provincial offices located here, even though quality of life, the good infrastructure and the diversity of the local economy might make this a rational choice. George might be the closest to playing such a role in future.

6. Accelerating momentum: If we accept that the Southern Cape's unique mix of growth potential has only recently become apparent, the question now foremost in our minds relates to the gradual acceleration of that momentum. There is distinct growth potential in most of the towns and cities, just as most of the identified "growth sectors" could expand even faster, without endangering the region's quality of life. A few critical pre-requisites for such acceleration can be mentioned to conclude this article:

· sector leadership and the cooperation between local firms in these growth sectors;
· municipal leadership and the cooperation between public and private sector partners in urban development;
· increased, sector-focused education and training, with close links between training facilities and local businesses;
· effective steps to reduce the still widening socio-economic divide between the better-off and the poor in the region: the Southern Cape may be less polarised than metro-regions in South Africa or the rural areas of other provinces, yet, the divide is real and has the potential to dampen growth; and, finally,
· more dynamic leadership and expertise at district level to coordinate all these growth segments - in close cooperation with the provincial government and parastatal agencies as well as organised business.