Chairperson, hon Ministers and hon members, the Policy Statement, once more, presents us with an opportunity to debate the economic policy and the direction in which the country is heading as far as the economy is concerned. The golden thread in this debate is the socioeconomic wellbeing of the populace.
As the document states, government would like, amongst other things, to ensure that the social security network remains intact and that it caters for those in need; to ensure the deracialization of the economy; to ensure the creation of jobs and poverty eradication; and to further integrate the South African economy into the regional and world economies at large. One should note that investment in infrastructure constitutes a major portion of the investment expenditure towards the Fifa World Cup in 2010 and, most importantly, beyond. A policy argument on the investment trend is the amount of investment in respect of the total production in the country's economy. According to the ANC policy conference held in July 2007, the envisaged investment trend is 25% of GDP.
Economists have engaged on and argued about the rate of investment necessary to sustain an economic growth of 5% or more in order to reduce unemployment by half in 2010 and reduce poverty. The million-dollar question is whether this kind of investment will, at the end of the day, generate enough economic activity to halve unemployment by 2014 and reduce poverty.
Thus the introduction of a structurally balanced budget is a prudent move towards attenuating the negative economic impact of external shocks on the economy. This brings me to the use of the surpluses in cushioning the economy during bad economic cycles.
National Treasury has coined the term "structural budget balance". This simply means the smoothing of budget overruns or deficits during good economic times or bad economic times. This will ensure that government is able to sustain the quality of life we are currently living, especially for those who depend on state grants. However, in the long term this will not address the issue of the golden thread, which I mentioned earlier.
Job creation is a key element in addressing this issue and in turn the creation of jobs depends on the level of economic growth. The quality of jobs created will, at the end of the day, determine the quality of life. Therefore, government's role in the development of our economy is central. We cannot continue to rely on the invisible hand of the market to better our lives.
Thus, increasing infrastructure investment to lay a foundation for the anticipated growth beyond 6% is needed, to be able to halve unemployment by 2014. However, according to the Financial Mail of 26 October 2007, we are not going to be able to reach the target because we are still not able to create enough jobs despite our current level of investment in the economy.
Do we then have to increase public sector infrastructure expenditure to more than R482,4 billion over the medium term? I personally do not know the answer to this question. However, we cannot debate the issue of economic growth without touching on the three main variables, namely capital, land and labour.
We can also not rely on the markets for the distribution of these resources. A conscious and calculated decision has to be taken by government to accelerate economic growth in a sustainable manner. The private sector has a role to play in so far as economic efficiency and other issues are concerned, but government has to take the lead.
Enough has been done to open our markets and to liberalise our economy. Many of the exchange control regulations and laws have been repealed. Trade liberalisation and transparency have to be balanced with the size of our economy, not forgetting that we are still an emerging economy.
Our economy is still based on the primary sector. Therefore, the pricing of commodities is determined by world markets, and that is why some of our industries still need protection by the state. Some members of the Portfolio Committee on Trade and Industry attended the public hearings, and the debate on this issue is welcome. However, further engagements on a broader basis are imperative.
State-owned enterprises need to gear up and channel their resources towards the development of the state and improving the quality of life of our people. In conclusion, I want to say that in the face of high and increasing oil prices, perhaps we need to rethink the role played by Sasol in producing fuel from coal so that we limit the amount of oil that we have to import, in order to curb inflation and remain within the inflation target. Thank you.