DA's Plan for Growth and Jobs - Democratic Alliance

PreambleThe 8% Growth Project is the Democratic Alliance’s policy agenda for economic change thatwill open job opportunities to millions of South Africans. It sets out how we will work tochange our economy from one that grows at 3% per year, to one that grows at 8%.Economies like Peru, Singapore, and Vietnam have all recently achieved annual growthrates of 8%, and their average growth rates have exceeded 6% over the past decade. Thishas allowed them to achieve extraordinary results in tackling social ills like poverty,unemployment and inequality.South Africa, on the other hand, has averaged only 3.6% growth in GDP over the pastdecade, reaching a high of 5.6% in the boom years of 2006 and 2007. This has not beensufficient to significantly roll back unemployment, or provide opportunities for people to liftthemselves out of poverty.Economic growth is the essential ingredient. No country has created jobs without growth.There are many constraints to growth in our country, but underpinning them all is the factthat too many South Africans are left out of the economy and are unable to make acontribution to driving growth because they can’t find work; they can’t attain skills; they can’tstart businesses; and they lack access to capital assets.In short, too few people in South Africa actively participate in the country’s economy.You can see this from South Africa’s labour market where our unemployment rate hasaveraged 27% (using the narrow definition of unemployment) over the past decade. This isby far the highest of any developed country or emerging market in the world and three timeshigher than unemployment rates in Brazil, Turkey and Ghana.And you can see it in the state of entrepreneurship in South Africa where only 9.1% of theeligible population is engaged in entrepreneurial activity. This is less than half the proportionin comparable middle-income developing countries such as Argentina, Thailand or Chile.The apartheid government denied millions of South Africans access to economicopportunities and built an economy of insiders and outsiders, principally dominated by largestate and private companies.Eighteen years after the end of apartheid, this basic structure has not changed, and SouthAfrica remains a country of insiders and outsiders with Big Government, Big Unions andsome anti-competitive Big Businesses on one side, and millions of ordinary of South Africanson the other.The DA’s solution is to make markets work for the many, not just the few. The state has aresponsibility to intervene when markets fail, but also when powerful public and privatesector players abuse their market power at the expense of others.This is central to the DA’s vision of a state that provides an enabling environment foreconomic growth by ensuring access to markets, credit and skills; limiting negativeexternalities; attracting trade and investment, and ensuring the economy has theinfrastructure it needs in order to grow.The policies here take us a step closer to fulfilling this vision at national level.9 | P a g e