South Africa

JOHANNESBURG – Government’s New Growth Path (NGP), unveiled late last year, does not speak to the issues that would boost real economic growth, Rand Merchant Bank economist Rudolf Gouws says. Gouws, who was addressing a Gordon Institute of Business Science economic outlook conference in Johannesburg, says that Economic Development Minister Ebrahim Patel’s plan is not really a map to growing an economy, but rather a “reactionary jobs plan”. The plan aims to create five-million jobs in the next ten years in strategic areas of the economy. But Gouws stresses that the NGP is focusing too much on creating jobs through State intervention, rather than promoting a more enabling business environment. Econometrix chief economist Azar Jammine agrees, saying that, if South Africa wants to achieve the NGP target of creating another half-a-million jobs every year until 2020, it will need to place much greater emphasis on attracting large-scale foreign investment and creating an enabling environment for local and foreign businesses. Foreign direct investment (FDI) slumped 87% to $1,3-billion in 2010, a United Nations report says. Jammine says that the decline in FDI flow could be linked to South Africa’s lack of productivity, owing to the degradation of the country’s education and training system, together with the threatening monopolistic-like union movement.

PRETORIA – US policy towards Africa should be strategically shaped to promote dialogue through greater African regional integration. These are the sentiments conveyed by Dr Eric Silla, senior adviser to the assistant secretary of State for African affairs, during a dialogue cohosted by the Institute of Global Dialogue (IGD) and the University of South Africa, in Pretoria. The dialogue, titled ‘US Africa Policy under Obama’, seeked to gain insight into the current diplomatic climate within Africa and the US, that shapes the US foreign policy, as well as to investigate future cooperation between the two countries. Both Silla and fellow speaker Francis Kornegay, a senior research associate at the IGD, agreed that through active strategic engagement through multilateral organisations, such as the East African Community, the Economic Community of West African States and the African Union, greater African unity could be achieved in overcoming the continent’s perennial problem of diversity and fragmentation. Silla identifies the lack of a unified African voice in advancing African interests as one of the major obstacles in advancing US diplomacy on the continent.

PRETORIA – Labour Minister Nelisiwe Oliphant added her voice to the debate on “decent work” at the annual Labour Policy Conference, in Pretoria. “Decent employment can only be successful when all stakeholders constantly keep in mind . . . the context of the South African and global economies, social realities, such as poverty, inequality and education levels, and the long-term goals for South Africa which must be weighed against short-term costs,” she told delegates from organised labour. “Our aim is to create a policy framework to promote decent work,” she said. However, the “meaning of decent work” should include health and safety conditions of employees. “When you talk about the workers that are working in a restaurant or a shop or whatever industry . . . you look at the health and safety [conditions] under which those workers are working.” Oliphant said that the recession had led to the loss of another million jobs, leaving about 6,4-million South Africans unemployed. “Job creation is now an overriding priority for government and, hopefully, for our social partners as well. The key test of our policies will have to be their ability to contribute to job creation,” said Oliphant, who replaced Membathisi Mdladlana in a Cabinet reshuffle announced by President Jacob Zuma last year.

Africa & the world

TUNIS – Tunisia wants to have ousted president Zine al-Abidine Ben Ali and his family arrested and put on trial for theft and currency offences, the justice minister says. The international police organisation, Interpol, has been asked to help arrest Ben Ali, his wife Leila Trabelsi and other family members who have fled the country, Lazhar Karoui Chebbi told a news conference. Ben Ali went to Saudi Arabia after weeks of violent protests against poverty, repression and corruption. He amassed vast riches during his 23 years in power, with his family controlling many of Tunisia's biggest companies. "We are asking Interpol to find all those who fled, including the president and this woman, for trial in Tunisia," the Justice Minister says. Chebbi also says that six members of the Presidential guard will be put on trial for inciting violence after Ben Ali's departure. Inspired by Tunisia's example in toppling Ben Ali, thousands of Egyptians have taken to the streets of Cairo and other cities to demand an end to President Hosni Mubarak's 30-year rule, clashing with police who fired teargas and used water cannons.

KHARTOUM – The US should look beyond the Darfur issue and quickly normalise ties with Sudan to build on progress from its successful secession referendum, Foreign Minister Ali Karti says. "Normalisation of relations should not be held hostage by Darfur," Karti said before a meeting with US Secretary of State Hillary Clinton. In their meeting, Clinton reaffirmed US willingness to move toward normalising relations but outlined several steps, which must take place before this can happen, the State Department says. Karti's visit comes amid significant warming of relations between Khartoum and Washington, which has praised Sudan for the successful January referendum on independence for the south, which capped the 2005 peace deal that ended a long civil war between the two sides. To encourage cooperation, the Obama administration has offered to relax sanctions on Khartoum and take steps to remove it from the US official blacklist of State sponsors of terrorism, which it joined in 1993 amid concerns it harboured al-Qaeda leader Osama bin Laden. Full normalisation of relations, including the exchange of ambassadors, could follow.

WASHINGTON – Rapidly growing Bric emerging economies are vulnerable to external shocks as they lack adequate risk management and must synchronise fiscal and monetary policies, a survey of Finance Ministry officials shows. The survey, released by consultancy Booz & Company, says that the role of Finance Ministries has expanded far beyond their traditional fiscal mandate; and they must reform so that they are not overly driven by interventions, near-term fiscal targets and benchmarking against local peers. Booz polled more than 60 policymakers in Finance Ministries in the Group of 20 and other key economies, along with officials from the International Monetary Fund, the World Bank, the European Union, the Organisation for Economic Cooperation and Development, academic institutions and think tanks. Brazil, Russia, India and China – the powerful Bric group of emerging nations – rebounded fast from the financial crisis, but the survey warned of shortcomings, which could pose risks in the future. “Russia is vulnerable to swings in the price of oil, Brazil to commodity prices, and India and China to global demand. China faces the additional risk of potential changes in currency policy, which could have ramifications for its trade position,” Booz says. These economies will face volatile swings within the economic cycle, often requiring corrective measures with high costs, unless the economic management functions within these countries are coordinated through a larger framework. “This being the case, an overall framework for coordinated action is a priority for these economies,” the survey says.

NEW YORK – World efforts to slow deforestation should do more to tackle underlying causes, such as rising demand for crops or biofuels, says a United Nations (UN) study focusing on using trees to fight climate change. It says that a series of projects to protect forests has had limited success in recent decades – UN figures show that 13-million hectares of forest was lost every year between 2000 and 2009, an area equivalent to the size of Greece. The report by the International Union of Forest Research Organisations (IUFRO) suggests that the current UN-led efforts to protect forests have too narrow a focus on promoting trees as stores of carbon dioxide, the main greenhouse gas. “Our findings suggest that disregarding the impact of forests on sectors such as agriculture and energy will doom any new international efforts whose goal is to conserve forests and slow climate change,” says Jeremy Rayner, who chaired the IUFRO panel and is a professor at the University of Saskatchewan. Deforestation accounts for perhaps 10% of all emissions of greenhouse gases from human activities. Trees soak up carbon as they grow but release it when they burn or decay. The IUFRO study says that a key problem is that deforestation, from the Amazon to the Congo, is often caused by economic pressures far away. A popular global brand of cookies, for instance, uses palm oil grown on deforested land in Indonesia.