Chairperson, hon Minister, hon members, distinguished guests, ladies and gentlemen,the Department of Economic Development is in government's cluster of economic departments whose task and mandate is to co-ordinate the country's focus on employment creation. In this regard, your department, hon Minister, is a champion of government's economic framework, known as the New Growth Path. This plan identifies a number of key drivers as stimuli for the creation of employment opportunities for the millions of South Africans who are battling to find decent work.
According to the Financial and Fiscal Commission, South Africa currently faces major economic challenges. These include the high unemployment rate, poverty, inequality, a lack of development in small businesses, particularly in the informal sector, and also a lack of infrastructure.
However, I think that the most serious crisis this country is facing is the scourge of youth unemployment. It is estimated that 71% of all the unemployed are under the age of 34. This is a time bomb that is waiting to explode at any time unless something drastic is done to address this crisis. The DA has over and over again called for the implementation of a youth wage subsidy, which President Zuma formally announced in his 2010 state of the nation address. You will also recall that this was floated for the first time in October 2009, during the Medium-Term Budget Policy Statement. At that time, most opposition parties and the Federation of Unions of South Africa all supported this National Treasury policy. However, this process has been stalled because of Cosatu's stubborn and loud opposition to the policy, mainly on spurious grounds. While Cosatu claims on the one hand that it supports the fight against unemployment, it opposes this progressive policy on the other.
According to the National Treasury, if this subsidy had been implemented, the policy would have benefited over 400 000 young job seekers over a period of three years, at a cost of R5 billion. If this policy had been implemented, say by 1 April 2010, it would already have benefited almost 200 000 young people and created more than 800 000 jobs. What hypocrisy, therefore, on the part of Cosatu! The onus now rests on President Zuma to take decisive action in the interest of our young people who are suffering because of unemployment.
The government's massive infrastructure drive of 645 projects to be scattered across the country is said to be the answer to the problem of unemployment in the country. One of the prominent international figures who you referred to who has praised this government's infrastructure programme is Professor Joseph Stiglitz. He has said that the programme will create both huge supply and demand in the country. He said that on the demand side the programme would create jobs, and at the same time the improved infrastructure would create production capacity in the economy.
Minister Patel is also on record as having said that infrastructure development is a jobs driver. This is a welcome development. However, the Minister has also identified and been quoted as having identified a number of problems that result from a gigantic programme such as this one, which includes: weak implementation capacity and poor project planning; projects that are not strategic or aligned to the government's priorities; and poor co-ordination that can contribute to slowing the pace of project implementation.
Chairperson, there is another major challenge, which the Minister has not spoken about. It has to do with the colossal amount of corruption that goes along with projects of this magnitude. I am aware that government has set up the Presidential Infrastructure Coordination Committee to provide a central monitoring mechanism. However, hon Chairperson, the Arms Deal is still very fresh in our minds and has taught us bitter lessons that we all have to learn from.
It is no secret that the enormity of this infrastructure development programme can create fertile ground for tenderpreneurs and other shady characters to amass huge amounts of ill-gotten wealth at the expense of those who are supposed to benefit from the projects.
What is required therefore, Minister, is the creation of stringent and strict mechanisms of transparency and openness in the awarding of tenders. Finance Minister Pravin Gordhan stated that the success of any job-creation programme depended on a number of factors, including the strength of the economy, its ability to absorb the unemployed, the extent of investment in key sectors with the potential to generate new jobs and the supply of skills.
Private and public partnership is also very important in the realisation of infrastructure development and in job creation in general in any country. The government alone cannot implement such programmes if the private sector does not come to the party. It is therefore very important Chairperson that relations between the ruling party and government on one hand and the private sector on the other are sound and healthy.
In recent weeks, the flurry of attacks that were heaped on Dr Reuel Khoza, the chairperson of Nedbank, by both the ruling party and government point to the deeply rooted intolerance to criticism by both the government and the ruling party by the citizens of this country. Instead of tackling the issues raised by Dr Khoza and considering these issues for possible future dialogue with the business sector, what we saw was a concerted and serious personal attack on the man. In this regard, the ANC and government were prepared to play the man and not the ball.
Foreign direct investment such as the Walmart injection of R16,5 billion in our economy is welcomed as a positive development that would, in the end, translate into the creation of up to 15 000 jobs. However, last year, Minister, along with two of your colleagues, you launched an application to appeal the approval of that Walmart-Massmart merger. This appeal against the investment was, in my view, unwarranted. We know that the initial decision by the Competition Commission had attached conditions to this merger. These included a requirement for Walmart to follow all South Africa's labour regulations and to set up a fund to support local South African producers. These were appropriate and sufficient.
However, it would appear that this appeal on your part, hon Minister, was nothing but an irresponsible manipulation of the competition authorities to further your own agenda. In reply to a DA parliamentary question, Minister Patel, you admitted that the appeal cost this country R41 million, which was to be shared between the three departments. That is a waste of the taxpayer's money.
The DA would like to advise you, hon Minister, to please focus on creating an enabling environment for job creation and economic development as this would create opportunities for South Africans to enter into gainful employment to root out poverty and to improve the lives of the people on a sustainable basis. [Interjections.]