Saturday, October 16, 2010

(MnG) Sexwale: SA's economic growth 'insufficient'

Sexwale: SA's economic growth 'insufficient'
JANICE ROBERTS | JOHANNESBURG, SOUTH AFRICA - Oct 15 2010 13:22

South Africa's economic growth, currently below 4%, was "insufficient", the Minister of Human Settlements Tokyo Sexwale said on Friday. He was speaking at the South African Chamber of Commerce and Industry's annual convention in Johannesburg.

"During his visit to the People's Republic of China -- one of the most powerful economies breathing down the neck of the US -- President Zuma said our growth rate should be 7%," Sexwale said.

However, for South Africa's growth to reach 7%, it was necessary to adopt a partnership effort.

"For this we must look at the recent rescue mission in Chile where 33 miners were saved -- it was not a miracle, but rather the result of a concerted effort by many."

Sexwale said this kind of partnership approach could be used to turn South Africa from a developing country into a developed nation.

"Michael Spicer of Business Leadership SA suggested recently that we take a lesson from the South Korean example to become a developed economy in 30 years."

Sexwale said South Africa could not remain a developing country for the next 100 years.

"We can't enter the next century as a developing market ... and it is crucial that in the future South Africa be recognised for its strong economic muscle and not just its negotiation skills," he said.

If the country's people worked together to create a high growth rate this would bring about poverty reduction and an improved employment rate.

"Currently we have able bodied South Africans who cannot find work, who cannot put food on the table."

Quest for Bric
Sexwale said it was South Africa's quest to become part of the Bric (Brazil, Russia, India and China) countries.

"These countries together form a very powerful bloc and it would be good for South Africa to stand with these countries in the G20 as a powerhouse in our own right."

However, for anything to be achieved, the partnership approach was crucial.

"We must bring government, labour and civil society together."

Sexwale said the world was still one of "dog eat dog".

"This was seen in the recent global recession that spread from North America to Europe to the Middle East and to Japan."

The minister said that the Pigs (Portugal, Italy, Greece and Spain) had received a lifeline during the sovereign debt crisis.

"They had a soft landing as they are part of Europe."

However, the troubles experienced by other nations should send a message to South Africa not to be complacent.

"The risks are still high for a modest economy such as ours."

Sexwale said there had been a lot of self-praise that South Africa's banks had not fared badly during the global crisis.

"But now we have the currency wars."

Sexwale warned that a double dip recession in South Africa's trading partners was not inconceivable.

"South Africa is exposed to its traditional trading partners and if they get hit again there would be a very direct consequences."

The minister said that while South Africa had to provide for its people, it could not develop into a welfare state.

"So any strategy we adopt must make sure that social expenditure will not outpace capital expenditure."

Currently, the state was compelled to use taxpayer's money to provide food, education and healthcare. - Sapa

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