DA launches growth project

2011-11-10 19:29

Cape Town - The Democratic Alliance launched the first phase of its "8% growth project" on Thursday.

The project identified 12 growth impediments needing attention for South Africa to achieve an economic growth rate of 8%, DA federal chairperson Wilmot James told reporters at Parliament.

"At this rate of growth, we will create millions of jobs. Poverty would halve in five years, just like it has in places such as Brazil," he said.

"But before we talk of solutions, we need to diagnose the problem. That is what the document we are presenting today is all about."

Key findings included that South Africa's current growth trajectory was skills and capital intensive, featuring low demand for unskilled and low-skilled labour.

This was as a result of high costs, a restrictive regulatory environment, and antagonistic labour-employer relations.

South Africa faced serious skills shortages.

This put a constraint on economic growth, because it limited the ability of enterprises to expand their operations or venture into new areas.

It also meant that existing economic activities might be carried out to a low standard, without the requisite expertise.

An infrastructure backlog of R220bn inhibited economic activity and placed a major constraint on future growth was another impediment, he said.

High costs and a heavy regulatory burden also discouraged entrepreneurship and contributed to growing "informalisation" in the economy.

"South Africa is a difficult place to start a new enterprise," James said.

Lack of access to capital led to exclusion of the poor from the formal economy.

Creative policies were needed to capitalise the poor so that low-income individuals could participate meaningfully in the formal economy.

Genuine broad-based black economic empowerment and employment equity were critical to the achievement of a fairer, more equitable society.

The success of both sets of policies, however, had been limited.

Another impeding factor was crime.

It inflicted direct economic and psychological costs, which deterred investors and fuelled emigration, both of which undermined economic growth, James said.

- SAPA