Hon Speaker, hon members, comrades and distinguished guests, the present economic growth trajectory cannot meet the country's employment needs. Faster growth is required over an extended period of time to significantly increase labour absorption, reduce high unemployment and achieve a more equitable distribution of income.
To achieve 5 million jobs over 10 years, growth of over 6% a year must be achieved together with measures aimed at broadening participation and inclusive development. This is what the New Economic Growth Path proposes, in order to bring about the marked reduction in poverty and inequality we all seek.
To achieve the developmental aims of the new growth path, there needs to be more rapid job creation through a broad range of policy initiatives. These would include: labour market institutions that must be strengthened; expanding further education and training, and with specific interventions needed to increase both public and private-sector demand for labour, especially for young workseekers; and greater participation of our development finance institutions in co-financing infrastructure projects, enterprise development, housing and farming support.
In addition, in implementing the Industrial Policy Action Plan, together with increased support for small enterprises and local economic development, the following areas are critical in creating decent work and more jobs: greater investment is needed in the electricity, transport and communications sectors; improved economic co-operation between countries in Southern Africa, including financial and trade institutions and transport; improved communications, energy and water networks; and improvements in Public Service delivery and increased filling of vacant posts that are funded in pursuit of agreed service delivery outputs and targets.
Measures to support exporters and manufacturers through trade facilitation agencies, investment in technology and industrial development zones and institutions, such as the Industrial Development Corporation, are all critical in the creation of jobs.
The executive, in a recently convened special Cabinet meeting to discuss the key economic challenges facing South Africa, endorsed a proposed new growth path for the country that will place employment at the centre of government economic policy.
The new growth path is a broad framework that sets out a vision and identifies key areas where jobs can be created. A series of implementation plans for consideration and signing off by the Cabinet is being worked on.
The new growth path is intended to address unemployment, inequality and poverty in a strategy that is principally reliant on creating a significant increase in the number of new jobs in the economy, mainly in the private sector.
The new growth path sets a target of creating 5 million jobs in the next 10 years. This target is projected to reduce unemployment from 25% to 15%. Critically, this employment target can only be achieved if the social partners and government work together to address key structural challenges in the economy. These challenges include: bottlenecks and backlogs in logistics, energy infrastructure and skills, which constrain economic growth and raise costs; low domestic savings and inadequate levels of investment in the productive sectors of the economy; economic concentration and price collusion in key parts of the economy, which raises costs and limits innovation and new enterprise development; an uncompetitive currency that limits employment growth in manufacturing, mining, agriculture and tourism; and a persistent balance-of-trade deficit funded with short-term capital inflows attracted largely by high interest rates by international standards.
At the national general council of the ANC in 2005, council warned that consumption and commodity-led economic growth would, in time, have its own consequences and would lead to the classic economic commodity price boom, which would not result in revenue being sufficiently applied to promote economic diversification and skills development. This form of growth is usually not underpinned by a strong production base.
The global economic crisis of 2008 has posed new challenges for South Africa. The 2008 to 2009 recession led to more than a million jobs being lost in the South African economy. The global economic crisis has also highlighted the emergence of new centres of economic power, with rapid recovery and fast growth in China, India and Brazil, as the chairperson has stated before, backed by decisive action by their governments. This creates new opportunities for South Africa that the new growth path identifies.
The new growth path will now seek to place the economy on a production-led trajectory with growth targeted in 10 "jobs drivers". Thank you, hon Chairperson. [Time expired.] [Applause.]