Economist Michael Power, who also sits on the South African government’s Economic Advisory Panel, has slammed the critics of Economic Development Minister Ebrahim Patel’s New Growth Path (NGP), arguing that they were simply pursuing their own narrow interests and were not considering the millions of South Africans that remained unemployed.

Speaking at the GIBS Economic Outlook 2011 conference in Johannesburg on Wednesday, Power said that it was time that South Africans realised that they were not living in London or Frankfurt, but in Africa, and that the country was afflicted with the highest unemployment rate on the continent.

“South African economists seem to know how to read a compass, but not a map. They base their arguments on theories for the Developed World, without knowing where this country is really positioned.”

The country currently has one of the world’s lowest labour participation rate, at around 40%, yet consumption was high at 72% of gross domestic product. “We have put the consumption horse before the production cart. People are receiving very high wages and maintaining good living standards – that is – if you are lucky enough to have a job.”

Other African markets have also started to surpass South Africa, the continent’s largest economy. “We view ourselves as the automotive of the continent, but we can only rally growth rates half those of the ‘trucks’ that are supposedly following us.”

Power believed that government, labour and business had equal parts to play in tackling the unemployment challenge. “It is not a question of right or left anymore, it is a question of looking at what is right versus looking at what is wrong. I believe that the South African economy by itself can grow at about 4%, which means that the government needs to contribute another 1% from its side, labour 1% from its side, and business the other 1% to show a 7% growth rate.”

The NGP identified strong growth opportunities in the agriculture, mining and tourism industries – the country’s “natural strengths”, which had the potential to generate large-scale employment.

But South Africa also needed to start becoming increasingly competitive and export focused. Power even suggested that South Africa should consider pegging the rand at a lower level to boost competitiveness.

While targeting a currency level would be difficult, Power said that a good indicator would be a level that allowed South Africa to run a surplus at the top of its economic cycle, rather than a deficit at the bottom of a cycle, as it was currently doing.

“What makes the NGP different from previous growth plans, is that it has a strong thrust towards addressing the problems of our Third World economy and doing what is right for everyone, not just some of us,” he concluded.