DA's Plan for Growth and Jobs - Democratic Alliance

It could not have come at a worse time. While champagne bottles were being uncorked atthe Union Buildings following President Zuma’s inauguration, the world was grappling withworst economic downturn since the Great Depression. In South Africa, close to a million jobswere lost between 2008 and 2010 and the deficit to GDP ratio reached levels not seen sincethe end of apartheid. More than ever, our country needed a clear economic vision.We didn’t get one. Instead, President Zuma sought to appease the various factions thatbrought him to power by assigning the formulation of economic policy to four separategovernment ministries: the National Treasury; the Department of Trade and Industry; theDepartment of Economic Development; and the National Planning Commission. Each ofthese produced economic plans and strategies, but these were not consistent and frequentlyworked against each other.The headline policy initiative to emerge from the new Department of EconomicDevelopment, overseen by trade unionist Ebrahim Patel, was the New Growth Path (NGP).The NGP, adopted by the Cabinet in 2009, departs significantly from earlier policy platformsin that it draws heavily on East Asian-style ‘state capitalist’ models, complete with anexpanded role for the state as a player in sectors such as mining and banking, and massiveincreases in government expenditure.The NGP has a number of flaws that militate against it offering a credible economic vision forSouth Africa. It does not, for instance, take into account the very real skills shortages andcapacity constraints in the public sector, nor does it adequately address where the additionalmoney will come from to fund its ambitious state-led projects and programmes. Moreimportantly, it does not fix the fundamental problems facing the South African economy thatinhibit growth and exclude the poor.A second policy platform, the National Development Plan, was put forward by the NationalPlanning Commission headed by Trevor Manual in 2011. This document stood in contrast tothe NGP and provided both a positive contribution to the discussions of South Africaneconomic planning and a Vision for 2030.However, the ANC has not been able to resolve the fundamentally different approaches laidout by the two documents, leaving the country and its citizens in limbo regarding anunderstanding where the South African economy is headed.Where we are nowIn the absence of a clear direction for the economy, growth has stagnated during PresidentZuma’s first term in office. Registering between 2.5 and 2.8% per annum, South Africa’sprojected GDP growth significantly lags Africa as a whole, which stands at approximately5.5%. Lacklustre growth, coupled with policy indecision, has meant our country’sunemployment rate continues rank among the highest in the world.In recent years the promise of 1994 has not opened economic opportunities to all SouthAfricans. Instead, powerful insider elites in the form of Big Business, Big Government andBig Unions, have continued to monopolise opportunities at the expense of the many.The failure of South Africa’s education system, for example, to equip young South Africanswith basic literacy and numeracy skills means their chances in life – whether this involvesfinding a job, or pursuing higher education and training – are cut short even before theyleave school. This failure has seen youth unemployment soar to over 50%.24 | P a g e