While business leaders have given a thumbs up to Planning Minister Trevor Manuel’s vision for the next 20 years, the implementation and the future of his National Development Plan (NDP) rests with the deeply divided delegates to the ANC elective conference in Mangaung starting on Sunday.
Political analyst Nic Borain said it would be the task of the national conference to co-ordinate Manuel’s NDP, which was finalised in August, and the New Growth Path (NGP), launched two years ago by Economic Development Minister Ebrahim Patel.
While 33 chief executives and chairpersons of some of the country’s biggest companies committed to the NDP in an open letter at the weekend, the ruling party’s position is not clear.
Manuel’s plan is only one of three launched over the past three years and it is not the one favoured by the SACP or alliance partner Cosatu. Patel’s approach and Trade and Industry Minister Rob Davies’ interventionist Industrial Policy Action Plan (Ipap) are more to their taste.
Manuel’s plan, which identifies the private sector as the main generator of jobs, aims to create an investor-friendly business environment.
Iraj Abedian, the chief economist at Pan African Investment and Research, said the NDP had largely been neglected by the government, and cabinet ministers rarely mentioned it. The absence of buy-in included Patel and Davies, the two ministers who would have to champion the plan if it was to succeed, Abedian said.
The NDP has, however, been praised by Finance Minister Pravin Gordhan. “Especially since the downgrades,” said Abedian. Two credit rating agencies have downgraded South Africa’s sovereign debt over the past 10 weeks because of policy uncertainty. These downgrades boosted the country’s borrowing costs.
Abedian said he hoped that cabinet members could see the connection between the downgrades and policy uncertainty.
Goolam Ballim, the chief economist at Standard Bank, said “political will and private sector corporate will” were needed to achieve successful policy initiatives.
He said the private sector should demonstrate “authentic commitment towards socio-economic justice in South Africa”. As for the government, Ballim noted: “There has been a section of government that acknowledges the private sector is not dispensable and is ultimately the locus of sustainable job creation and that, in consequence, there is a need for a partnership.”
Annabel Bishop, Investec group’s chief economist, said engagement between business and the government was vital and the business community had a lot to offer in terms of management experience.
But, while everyone agrees on the need to speed up economic and social change, there are differences on how to achieve this goal – including within the government.
In May 2010, President Jacob Zuma set up the National Planning Commission, chaired by Manuel, the former finance minister. But three months earlier, Davies had announced the second phase of his three-year rolling Ipap to create 2.5 million jobs over the next decade.
And in November 2010, Patel launched the NGP, which leaned heavily towards government intervention in the economy. It aimed to create 5 million jobs over the next 10 years – in other words 500 000 a year.
That level of job creation requires annual economic growth of 7 percent or more. The economy grew 3.1 percent in 2010, 3.5 percent last year and is heading for an annual 2.5 percent this year.
According to Statistics SA, the number of employed rose by 513 000 from 13 132 000 in the fourth quarter of 2010 to 13 645 000 in the third quarter of this year.