Govt needs to ditch the "developmental state" model to create jobs
02 July 2014
Minister of Finance, Nhlanhla Nene's confirmation yesterday that the National Treasury's 2.7% growth forecast will not be achieved is another in a string of recent indications of slowed economic growth under President Jacob Zuma.
The already underwhelming target was set under difficult economic conditions that have steadily worsened. The worsening conditions are self-inflicted by government policy that simply does not inspire confidence in our economy, both domestically and abroad.
During his State of the Nation Address President Zuma spoke of radical action. That radical action can be achieved if government recognises that it's economic model for a so-called "developmental state" is unworkable.
Attempts to place a deeply inefficient and increasingly corrupt state at the centre of our economy cannot lead to the accelerated growth that our economy needs if we are to achieve our socio-economic objectives to reduce poverty, inequality and unemployment.
Instead of shutting down economic space, government policy must open it up. It can do this by:
Providing political leadership and restoring investor certainty by speaking with one voice on the economy and implementing one plan in the form of the NDP;
Boosting trade with the rest of Africa through trade-focused diplomacy and cutting the costs of trading across borders;
Making it easier for South Africans to start and grow their own businesses by cutting red tape and providing more support for entrepreneurs;
Investing 10% of GDP in infrastructure to reduce the cost of doing business;
Making sure that labour laws support job creation by achieving a balance between the protection of workers' rights and the need for labour market flexibility in support of job creation; and
Managing public money better by combating government corruption and making sure that government spending decisions are taken in the best interest of all South Africans.
In the upcoming EPC debates the DA will set out our policy alternative for an economy that can and must work for all of our people.
Statement issued by Dr. Dion George MP, DA Shadow Minister of Finance, July 2 2014
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