South Africa should not let itself be paralysed by the daunting scale of the socioeconomic challenges it faces, Economic Development Minister Ebrahim Patel said on Monday.

Delivering the annual Imam Haron memorial lecture in Cape Town, he said that at last count, 16,5-million South Africans lived on less than the poverty level of R269 a month, and inequality was among the highest in the world.

"There are some who see poverty, inequality and unemployment as too big to take on, that the global economic forces that drive these outcomes are too powerful for a relatively small economy such as South Africa's to withstand," he said.

"We should not accept this philosophy of paralysis and fear. It is not a philosophy of a free people."

He said that the government's plan to develop a new growth path for the country had to start with the recognition that economic policy should be consciously designed to address poverty and inequality.

This had to be the purpose of the policy, not a "residual outcome".

He said that the rise of China, India and Brazil, and rapid economic growth on the African continent, opened the door to prospects for more equitable growth.

"Our work within government shows that our economy has the potential to create employment on the necessary scale," he said.

Some people put blind faith in the power of markets to address these challenges, arguing that the state simply needed to step aside and allow the pursuit of individual self-interest to be the engine that grew the economy.

"We should not accept the philosophy of greed, even when dressed up in the language of general interest," Patel said.

It was merely a way of maintaining the status quo for the poorest of the poor.

The new growth path would involve major changes in delivery in government.

Among the proposals being examined were fiscal and monetary measures actively directed at promoting more jobs.

These included a more competitive and stable exchange rate, linked with measures to control inflation and improve efficiency across the economy.