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The New Growth Path (NGP) announced by the Minister of Economic Development, Ebrahim Patel, at the end of 2010 is not reaching the lofty targets set for the programme – 500,000 jobs a year and 5 million jobs by 2020, to be exact.

On the weekend, Minister Patel proudly proclaimed the success of the NGP, citing the fact that 330 000 jobs have been created to date.

Minister Patel has obviously forgotten the targets he set himself. But the statistics speak for themselves.

Eighteen months since Patel’s announcement, the NGP should have created 750 000 jobs. This means that the current figure presented by the Minister falls some 420 000 jobs short of his original target.

Minister Patel’s celebration of missing his own jobs target by 56% is nothing short of delusional.

The fact is that the NGP is failing in its jobs creation mandate and should be scrapped. Had the NGP been implemented in full, the consequences could have been catastrophic. To illustrate the point, NGP proposals that have been implemented to varying degrees include:

• State-driven job creation: The NGP has an unrealistic reliance on state expenditure to create jobs through massive infrastructure programmes and a focus on labour-intensive industries. At least 250 000 of the jobs created each year are meant to come from public investment, which is unsustainable.
• No explicit strategy for basic and secondary education: The NGP focuses on higher education and on-the-job training with few practical solutions to resolving the crisis in our basic education system.
• Wage controls: Comprehensively rejected by analysts, such radical controls would create destructive distortions in the economy by reducing the competitiveness of business, shrinking the tax base and incentivising the migration of skilled labour to other markets.
• Misdiagnosing SMME growth promoters: The NGP suggests that SMME growth is inhibited by a lack of access to finance, lack of skills and the inability to compete in well established markets. Whilst we agree with some of these assertions, the NGP is silent on issues of tax incentives, labour market flexibility, lowering administered costs and other regulatory burdens.

In fact, it is difficult to determine exactly which proposals set out in the NGP have actually been employed. If the answer is none, then the Minister cannot claim that the plan has created 330 000 jobs. A more likely explanation is that only a fraction of the proposals have been instated, which has no doubt been the saving grace of the NGP.

If this government wants to create jobs and increase GDP growth, it will look to the many excellent proposals set out in the National Development Plan. Better still, it will study and digest The DA’s Plan for Growth and Jobs that we will release on the weekend.

With unemployment at 36.6% (using the expanded definition), we are in desperate need of effective, practical and sustainable growth policy based on international best practice. The reality is that the New Growth Path offers very little in this regard.

Minister Patel must explain exactly which NGP proposals have been implemented before he lauds its pseudo-success. It is about time the minister recognises the weaknesses in his scheme and accepts that his department must shift away from state-led economic expansion.