Date: 24/03/2010
Source: The African Christian Democratic Party
Title: ACDP: Swart: Speech by ACDP Member of Parliament in the debate on the Economic Development budget vote,

"Economic Development has been defined as the reduction or elimination of poverty, inequality, and unemployment within the context of a growing economy. The central aim of the department is to achieve this by increasing the number of "decent" job opportunities in the economy. The ACDP is fully supportive of these worthy aspirations. The million dollar question is clearly how to achieve this.

According to the strategic plan, the department will have a "cross-cutting" role, straddling many departments. Last year there was much uncertainty as to who bears the ultimate responsibility for formulating economic policy - a function given to national treasury in terms of the PFM Act. Has that responsibility now been taken over by your department, honourable Minister?

Is there not a considerable degree of over-lapping if one has regard to for example your stated aims of "evaluating macroeconomic and microeconomic policy tools... and improving their alignment" and doing economic modelling - already a core function of national treasury? There also appears to be overlapping with the national planning commission and the functions of Nedlac.

What is the danger that economic policy may become disharmonised in the process, or will the department's coordinating function prevent this? A harmonised economic policy that provides certainty and predictability is crucial to attracting foreign investment, particularly in a climate of global economic uncertainty.

We understand that the minister is to take responsibility for developing "a new growth path" for the economy. The challenge will then be to obtain buy-in from all the social sectors as well as the resources to fund this model. As far as the former is concerned, let us be reminded what the CEO of Business Leadership South Africa said recently:

"The fact that South Africa is not making sufficient progress because there is no shared vision that prioritise growth as a national goal... The first step would be for society, led by government, but with business, labour and civil society in close support, to agree on a vision of doubling the size of the economy within a generation."

The ACDP last year called on these sectors to enter a solemn pact in this regard - a shared vision. The Framework Agreement on the International Economic Crisis was a first step in this regard. We believe that much more can be done to achieve this.

As far as funding is concerned, we should be cautious about exploiting retirement funds. Development bonds may be a feasible alternative option, and attractive to investors.

To conclude, the ACDP supports an economic policy that is aimed at enabling a sustainable growth path that broadens the economic net and absorbs the high level of unemployed work seekers. The department faces huge challenges to achieve this and we wish the Minister and deputy minister well in their endeavours."