Here are the facts, Minister Gordhan

Cape Town - 140219 - The debate on President Jacob Zuma's State of the Nation Address (SONA) entered a second day today as opposition parties and ANC members took turns debating. Pictured is Tim Harris. Picture: David Ritchie

Cape Town - 140219 - The debate on President Jacob Zuma's State of the Nation Address (SONA) entered a second day today as opposition parties and ANC members took turns debating. Pictured is Tim Harris. Picture: David Ritchie

Published May 5, 2014

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The pushback from the ANC on the DA’s optimism about what SA and its people can achieve is truly puzzling, says Tim Harris.

Cape Town - The 2014 election has been about the economy and about jobs. These are the issues that ordinary South Africans care most deeply about, and they represent the key failures of this ANC administration.

It is simply unacceptable that economic growth has declined to under 2 percent during the Zuma presidency, while other emerging markets like Peru and Malaysia are growing at more than 5 percent. And all ANC claims about job creation are undermined by the hard fact that 1.4 million South Africans have joined the ranks of the unemployed since Jacob Zuma assumed office.

This performance is unacceptable to every mother who sends a child to bed hungry because she cannot find a job, every father who returns home dejected after yet another day of unsuccessful job hunting, and every young person who is losing hope that any door will ever open for them.

In contrast, the DA is justifiably proud of its job creation record in the Western Cape. We highlight this record to show that where the DA governs opportunities are being created for ordinary South Africans.

The battle is not yet won, but every effort of our administration is geared towards expanding economic opportunities, providing quality education for young people to prepare them for the jobs market, and taking steps to give work experience to young people to improve their

prospects.

In his opinion piece (“DA misleading public about economy”, May 2 - see related articles above), Minister Pravin Gordhan expresses concern at the DA’s use of statistics and research to back its delivery claims as well as its estimates of growth and job creation potential in a policy environment focused on expanding opportunities.

Minister Gordhan raises three issues: (1) the DA’s claim that the South African economy can grow at 8 percent, (2) our concerns about South Africa’s backwards slide under Jacob Zuma’s presidency, and (3) the jobs numbers we use in our campaign.

Here are the facts:

* South Africa’s growth potential

The ANC seems to have given up on creating real jobs, promising only state-led Expanded Public Works Programme (EPWP) opportunities in its election manifesto. The DA is more optimistic about South Africa’s potential for growth in an environment where government policy is geared towards creating an enabling environment for enterprise. Last year the Reserve Bank published a working paper, still available on their website, that shows how a set of five economic reforms could boost growth to 8 percent and create six million jobs in the next 10 years. The proposals in this paper are consistent with our analysis of South Africa’s growth constraints and how they can be overcome.

The DA backs the proposed reforms in its economic policy and uses the forecasts in the paper to show that an ambitious growth target and a real reduction in unemployment is not a pipe dream. The pushback from the ANC on the DA’s optimism about what our country and its people can achieve is truly puzzling. One can only assume that its aspirations have been tempered by the realisation that its “business as usual” approach will not bring about the change we need.

* South Africa’s stagnation under Jacob Zuma’s presidency

Between 1994 and 2009, the South African economy grew at an average rate of 3.3 percent including the year of negative growth of 1.5 percent after the global financial crisis in 2009. Under the Zuma presidency, however, average growth has been 2.8 percent and dropped below 2 percent last year.

The ANC blames all of South Africa’s economic woes on the global economic environment. But it has no explanation for how, in the same economic environment, the emerging markets we compete with have recovered to growth rates above 5 percent.

Yes, these are challenging times, but others seem to have tackled this challenge effectively, while our leaders have dithered. We are crippled by an ideological standoff in the economics cluster pitting the left-leaning New Growth Path and Industrial Policy Action Plan against the centrist National Development Plan (NDP). And with a President too weak to lead through this divide, we remain stuck.

* Job creation in the Western Cape

The DA’s jobs numbers come from the latest available from Statistics South Africa Quarterly Labour Force Survey (QLFS) – including the figures for the fourth quarter of last year, and the “Historical revisions of the QLFS: 2008 to 2013”, both released on February 11.

These numbers show that unemployment in the Western Cape is the lowest in the country. In terms of the expanded definition of unemployment, which includes those who have given up looking for work, Western Cape unemployment is at 22.1 percent – versus a national average of 34 percent.

When talking about unemployment numbers, Gordhan and the ANC like to ignore discouraged work seekers, but surely excluding those who have given up looking for work but remain unemployed does them a serious disservice. The DA will not allow these people to become a statistical euphemism and will continue to use the expanded definition of unemployment when considering both national and provincial performance on jobs.

Only 561 000 jobs have been created in Zuma’s term of office. We compare the latest available employment numbers between the first quarter of 2009 and the fourth quarter of last year.

The number of employed persons increased by 561 000 – from 14.6 million to 15.2 million. Gordhan’s claim of 1.2 million jobs created between 2009 and last year is clearly not supported by this data.

Over the same period, employment in the Western Cape went up from 2.1 million to 2.2 million. The province added 123 000 jobs – 22 percent of the national total. StatsSA’s latest Labour Market Dynamics report shows that the Western Cape has the highest “transition rate” among the youth – this measures the number of non-economically active youths who manage to get jobs. This shows that our strategies to improve youth employment potential are working.

We agree with Gordhan that the NDP “provides a broad strategic framework to put the economy and society on a new trajectory”. The problem is that the enemies of the NDP are many and they are right at the top of the tripartite alliance. The only solution is real leadership that is prepared to take on vested interests and make the tough decisions required to get our economy moving again.

On Wednesday South Africans will be able to vote for the one party that has shown it is willing to provide real political leadership on the economy. Clearly the ANC has given up hope. They must step aside.

* Tim Harris is the DA Shadow Minister of Finance.

** The views expressed here are not necessarily those of Independent Newspapers.

Cape Times

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