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SA Sets Course for New Economic Path
Source: Bua News
Source Date: Tuesday, October 26, 2010
Country: South Africa
Created: Oct 27, 2010

It wants to create an ambitious five million jobs in the next 10 years while reducing unemployment from 25 percent to 15 percent.

 

The announcements followed a special Cabinet meeting called by President Jacob Zuma on Monday to reflect on the economic challenges facing the country and the long-awaited new economic growth path.

 

Chabane said critical to the plan would be the partnering between key social players, business and government to address key structural challenges in the economy.

 

Government has realised the economic growth and commodity price boom experienced in the past years did not result in revenue being sufficiently applied to promote economic spread and skills development.

 

“The new growth path is a broad framework that sets out a vision and identifies key areas where jobs can be created. The growth path we are announcing today places employment at the centre of economic policy for the government,” Chabane said,

 

Authorities also agree that while South Africa's economy was among the first to show signs of recovery following the global recession, regulatory reforms that encouraged employment and fought poverty were needed.

 

The recession, which claimed more than 1 million jobs in 2009, took a heavy toll on South Africa's economy, with households suffering from falling incomes and high levels of debt. The domestic economy further contracted by an estimated 1.8 percent as a result of a decline in consumption spending and weak investment growth.

 

On Tuesday, Chabane said the new growth path will take some of the opportunities that arose from the recession.

 

He cited China, India and Brazil as examples of countries which have growth prospects similar to those of South Africa. The country could use its influence and experience to gain similar grounds in the continent. 

 

“The new growth path commits South Africa to work with other countries in the continent to build a single African integrated economy, embracing one billion consumers and to focus immediately on expanding economic links with the rest of the continent,” said Chabane.

 

At least six key sectors of the economy, including infrastructure development, agriculture, mining, green economy, manufacturing and tourism, have been identified as having potential to unlock employment opportunities. In the green economy, government identified a potential 300 000 jobs by 2020, with 80 000 in manufacturing with a potential to rise to well over 400 000 by 2030.

 

The Industrial Development Corporation has been tasked with raising capital to drive growth of the green industrial economy in line with South Africa’s commitments to drastically reduce carbon emissions in the next few years.

 

Both Chabane and Economic Development Minister Ibrahim Patel agreed that it would probably take more than government and the business sector to help the country achieve the new growth plan.

 

Patel’s department is also behind the Industrial Action Plan, which initially paved a way for the country’s growth path.

 

“Implementation and setting clear targets will remain a critical part of our work and that is why we will be engaging all partners from all walks of life, and Cabinet will play a big role in coordinating all stakeholder commitments in this regard,” Patel said. 

 

The Cabinet Economic Team is headed by Rural Development Minister Gugile Nkwinti, who is also at the centre of speeding up economic growth in the country’s remote parts through various land reform policies.

Nkwinti said through agricultural and land reform programmes, several employment opportunities that support the new growth part were already on the pipeline.

 

These included a special fund that had been created to assist emerging farmers in at least five of the country’s provinces.

 

“Our area of focus will be on identifying skills with the hope of using the funding to create more self-reliance businesses through partnerships of small and big commercial farmers,” he said.

 

All eyes will now be on Finance Minister Pravin Gordhan’s Medium Term Budget Policy Statement, which he delivers in Parliament on Wednesday.

 

Gordan’s speech will likely serve as a first indication of where economic policy under Zuma’s administration is headed and whether there will be a priority change in spending. - BuaNews

 

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