DA outlines economic election planComment on this story
Cape Town - It is a rosy plan that aims to grow the economy by 8 percent and halve unemployment in just over 10 years, if it sees the light of day.
The DA’s economic plan would push South Africa’s infrastructure and educational spending to international levels and privatise loss-making state-owned enterprises.
The political party told the media on Monday that its plan for growth and jobs was not wishful thinking but an aspiration based on research and global benchmarking.
DA leader, Helen Zille, who was pronounced as the party’s presidential candidate after their federal council meeting over the weekend, made it clear before tabling her party’s policy on the economy on Monday that the upcoming elections were about the economy.
The plan tabled on Monday would only see the light of day if the DA is elected to power.
“The economic policy is a national competency under the constitution. So we can’t change many of the laws that govern all these areas…We can’t set the economy free in the way that we are wanting to do to get this 8 percent growth until we are the national government,” said Zille.
The 10-point plan sought to create 5.8 million full-time jobs by 2025 by managing the public money better, incentivising job creation, tightening labour laws and boosting trade among other things.
The DA said the plan was proven that it could work as the South African Reserve Bank (SARB) has looked at policies similar to the DAs and projected their growth rates if they were implemented.
“Wishful thinking means you haven’t done you background work, that you haven’t done you assessments…that is not our policy making approach,” said DA Federal chairperson Wilmot James.
The SA Reserve bank published a research paper in July last year which modelled what it would take to achieve 8 percent growth.
But the party said this policy was not based on the SARB’s working paper as the DA was working on its own at the same time at the Reserve Bank.
The fastest growth that the South African economy has ever achieved since 1994 was about 5 percent in real terms between 2004 and 2007, according to figures released by Statistics SA in July last year.
The all-time high it has ever reached since 1994 was 7.6 percent in March 1996.
Average annualised GDP growth for the past 10 years is 3.2 percent.
The Reserve Bank has cut its 2013 economic growth forecast to 1.9 percent from 2 percent after strikes in the automotive shrank output and exports.
In 2012, the country posted a 2.5 percent annual growth.
Nicky Weimar, a senior economist at Nedbank, said while achieving 8 percent growth in 10 years did sound like an ambitious target given the shape of the world economy, lifting certain constraints on the economy could lift South Africa’s growth fairly quickly.
“If we were to change things, deal with constraints that exist in infrastructure and stop the contradictory messages we are sending to investors, even if not reaching 8 percent, we can grow fairly quickly,” she said.