Mathabo Le Roux
20 October 2008
Johannesburg — THE African National Congress (ANC)-led government is going to upscale industrial development dramatically in a bid to reduce unemployment.
A plan, outlined yesterday after the weekend economic summit of the ANC and its alliance partners, the Congress of South African Trade Unions (Cosatu) and the South African Communist Party (SACP), takes its cue from the ambitious national industrial policy framework, released in August as the centrepiece of a major state intervention to kick-start industrial development in key areas of the economy.
Support from the treasury for the plan has been lukewarm.
But industrial policy took centre stage at the weekend as the alliance made it clear it wants to up the ante in addressing one of SA's most pressing challenges: its 23% unemployment rate. Indications are that the ANC may also look at realigning empowerment policies to prioritise job creation.
"The focus of industrial strategy must be job creation. In future (black economic empowerment) must also be aligned more scientifically with the need to create jobs and develop local industrialisation. It is all going to be about jobs, jobs, jobs," said Cosatu secretary-general Zwelinzima Vavi at a post-summit press briefing yesterday. The alliance sees a central role for state-led development of the economy.
SACP deputy general secretary Jeremy Cronin said the alliance envisaged stepping up resource allocation for industrial strategy drastically in a bid to boost manufacturing, exports and jobs.
" Our allocation for industrial policy has been fairly paltry. We really need to speed up very drastically its implementation," said Cronin. A 15-year review showed systemic problems in the economy related to it not being restructured.
Development finance bodies such as the Industrial Development Corporation and Development Bank of Southern Africa will play a key role in funding industrial development. The alliance wants to use public procurement and state-owned enterprises to boost manufacturing capacity.
The alliance also said a task group would be set up to assess the effectiveness of macroeconomic policies, including inflation targeting, and to gauge measures to ensure a more stable and competitive currency.
To ensure funding of the industrial development strategy , the alliance outlined sweeping changes to the cabinet, ostensibly a measure to rein in the treasury's dictates on budget allocation.
Relations between the treasury and the trade and industry department have been strained by the treasury's aversion to intervention and its reluctance to fund industrial development.
Cronin stressed, however, there was "convergence in the alliance and government about how priorities needed to be realigned".
He said Finance Minister Trevor Manuel and Reserve Bank governor Tito Mboweni had attended the weekend summit "with their ANC hats on".
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