New Growth Path: DA challenges "absent" economic ministers to support plan
The central problem with the New Growth Path plan (see here) is that it places the state at the centre of a plan to drive growth and job creation in South Africa but ignores the reality that the ANC government lacks the capacity to implement it.
While this uncomfortable reality would prevent the ultimate implementation of much of Economic Development Minister Ebrahim Patel's plan, the DA believes that it may fall down much sooner due to lack of support from his cabinet colleagues.
The document on the table presents several ideas that would be anathema to Finance Minister Pravin Gordhan, Trade & Industry Minister Rob Davies, Planning Minister Trevor Manuel and Reserve Bank Governor Gill Marcus. As such, the Democratic Alliance challenges these economic leaders to publically lend their support to the plan.
If they do not do so, then we can only assume that Minister Patel's lonely seat at the announcement of the plan is indicative of a lack of support from the "absent" ministers who have actual influence over macro, micro and monetary policy.
Most of the good ideas in the plan - like reform of BEE, small business policy, and competition and trade policy - cannibalise the responsibilities of the Trade and Industry Minister. The plan also reduces his IPAP2 Industrial Policy to a plan to turn around manufacturing: doing it a serious disservice.
Minister Patel's plan stomps all over the Finance Minister's Constitutional mandate to set economic policy and define a fiscal framework. It airbrushes out his youth wage subsidy proposal, commits the State to a fiscal policy stance as well as significant new infrastructure expenditure, and alludes to firm currency interventions.
Perhaps most alarmingly it rides roughshod over the independence of the Reserve Bank by committing the Governor to a looser monetary policy, and subverts Planning Minister Manuel's dual responsibilities for long-term planning and African infrastructure development through Nepad.
And while Minister Patel's plan subsumes many of his colleagues' responsibilities, it fails to tackle the fundamental reform required in the labour market, preferring a "social pact" to moderate wages. While this is a laudable idea that the DA supports, we believe it is unlikely to succeed and the state's energy should be directed instead at reforming the labour market directly.
The DA supports the intention of accelerating growth and creating millions of new jobs, but we do not believe Minister Patel's proposal represents a realistic or implementable plan to do this. The State simply does not have the capacity. It appears to us that the senior economic ministers also have their doubts, so we challenge them to lend their support to the plan - or join our call for it to be withdrawn and significantly rewritten.
Statement issued by Tim Harris MP, Democratic Alliance Shadow Minister of Trade and Industry, November 24 2010
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