Weathering global recession

There are many pundits out there, who have blamed the African National Congress (ANC) for the latest effect the global financial crisis has had on South Africa. Now that our economy is officially in recession, we urge people not to despair. Effects will be there but we believe that our collective wisdom within the ANC, Government, business and labour, should spare us from the worst effects of this downturn.

We are an integrated economy and trends on the world stage reflect in our economy. However, we have - for some time - been insulated by the sound policies and regulatory systems that have been put in place.

Our 2009 Elections Manifesto makes it very clear that the ANC knows that the ongoing turmoil in world markets has and will continue to impact on the lives of our people. The cost of living has increased tremendously and economic growth is slowing, impacting on jobs. We have intervened and together with labour, business and other sectors, we are putting in place measures to ensure that in the short, medium and long term South Africa's economic prospects continue to improve and that job losses are avoided and minimised.

The South African response to the global economic crisis comprises of the following elements.

Government is continuing with our R787 billion public infrastructure expansion programme. This programme is aimed at expanding and improving rail networks, public transport, port operations, dams, housing construction, information and communications technology and energy generation capacity. An important element of the public infrastructure expansion programme is the improvement of public health and education infrastructure. This will play an important part in creating additional job opportunities and improving the overall lives of South Africans.

Government will now have to increase borrowings to finance parts of the expansion programme, but this is not borrowing to bail out the institutions that were responsible for the crisis in the first place. Our increased indebtedness is as a result of our commitment to improving the overall productive capacity of our country and to contribute to the ANC's stated aim of creating a better life for all by constructing roads and railways and putting in place more and better functioning schools and hospitals.

Another element of our programme in this time of economic turmoil is to intensify our public sector employment programmes. Again, we are not doing this in a vacuum or just establishing public employment programmes without due regard to the needs of our people. Firstly, we are increasing public sector employment in areas where there is clear need to do so. This is in the health, education and law enforcement sectors.

Secondly, we are implementing the second phase of the Expanded Public Works Programme (EPWP II) in areas such as home-based care and community health services, construction, maintenance and environmental protection projects.

The first phase of the EPWP created many jobs, but the ANC is very aware that these jobs tended to be short-term or part-time jobs and we are aiming to create more long-term jobs during EPWP II by investing more than R4, 1 billion over the next five years.

We are also engaging with the private sector to see what mitigating actions can be taken to ensure that investments do not slow down too much and that job losses are kept to an absolute minimum. Alternative to layoffs will be explored, including longer holidays, extended training, short time and job-sharing.

The ANC Government will adapt industrial financing and incentive instruments to help deal with the challenges in the various sectors and we are encouraging our development finance institutions (DFIs) to possibly assist firms in distress due to the crisis.

Government has put in place one of the most comprehensive social assistance programmes in the world (currently reaching more than 13 million South Africans) and we will continue to ensure that we expand social expenditure in this difficult time. We are increasing the quantum of social grants and progressively reducing the age of eligibility for old age pensions to 60 years for men. The ANC is committed to progressively extend the age of access for the child support grant to 18. As the Manifesto states, such eligibility must be linked to a schooling requirement.

We will also make more and better use of the Social Relief of Distress Grant and other food security measures to specifically target those hardest hit by the rise in food prices.

This economic crisis has shown the weaknesses in the governance of globalisation and related financial systems and the ANC is committed to ensuring that we use this opportunity to further agitate for putting in place a more democratic system of global economic and financial governance.

We have consistently argued for urgent and targeted interventions in the countries where the crisis originated. Whilst we believe that we must continue to strengthen domestic regulation and supervision of the financial system, we are also firm in our conviction that this must be accompanied by stronger action and surveillance of the global financial system.

In line with our Manifesto, the ANC will continue to strengthen partnerships with economic roleplayers on a domestic and global scale, especially with countries of the South as part of both responding to the crisis and developing and putting place measures to mitigate against a recurrence of such.

The ANC will continue to steer our country and our people on a higher growth and development path and we have every confidence that we will weather this storm by working together as all the people of South Africa.