Mr Speaker, in recent weeks, the world economy has been on a war footing. Ever since Brazil's finance Minister referred to "an international currency war", the global debate has been recast in battlefield terms.
According to The Economist there are three battle fronts. The first is over the unwillingness of China to allow their currency to rise more quickly. The second is over the rich world's monetary policies, in particular to print money to buy bonds - the USA has just embarked on this. And the third is over how the developing countries respond to the extra capital flows.
This is exactly where South Africa comes in and where some role-players want us to enter the currency war. The question is: Can we and should we enter this war?
Since January 2009, as the rand has appreciated, we have seen an adverse impact on export trade, but the negative impact on import values has been of a similar nature, so currency competitiveness is not a sole determining factor within a global and local environment and we all know there are many serious "other forces" at play. We cannot escape this truth.
We were reminded at the public hearings that it was insufficient regulation and greed that dumped us into this recession and in the aftermath we now see "loose monetary policy" with "political interference" and it's clear that nations are starting to look after themselves. Unfortunately, even decisions by G20 countries are pushed aside if they are not in the national interest of a particular country. In 2008, after the Washington G20 meeting, 17 countries went against so-called agreed resolutions.
We are back in the era where economies rely on demand of products, on government interventions and on a climate of currency stability. So the trick is to play within these rules and to recognise the driving forces of these times. We are a small boat with no aircraft in this currency war and not many bazookas mounted on it, so there is no room for mistakes - a free- falling rand, because of mistakes, will be far more negative to our economy and will especially impact badly on food security.
The Old World economies are under pressure - the reality is that the euro and the dollar will remain under pressure; commodity prices, that is energy, will be higher and, unfortunately, the rand is going to be strong. What happened yesterday and what is happening today in the euro zone will impact on us. We cannot escape it. So South Africa's reaction to this set of conditions is vital. It's time for consistency and to be conservative, and the hon Minister must be congratulated on his stance in the policy statement.
We should make sure that our fiscal policy focuses more on savings. We must shrink our current account deficit faster and our interest rates should be low for a while. Our currency should be stable, and we must be more productive and reduce our costs to service debt as soon as possible.
When a country faces enormous challenges, such as poverty and inequality, as we do, the table is set for an active role to be played by the state. The New Growth Path is sort of new, but there are many similarities to the previous plans in it. The question is: Will it work this time?
Time is running out, hon Minister. We do not have another 16 years in which we do not resolve the basic problems in education - maybe we should be bold and make education compulsory until the age of 18. We haven't got 16 years in which we do not resolve infrastructure and maintenance problems and establish a culture of entrepreneurship.
There is no room for populist economists like the Congress of SA Trade Unions, Cosatu. The vengeance of their written presentation at the public hearings addressed specifically to the hon Minister and the Treasury was uncalled for. Cosatu should simply employ better economists.
There are no holy cows in this growth debate and we should not allow them to dictate the debate - if we do not get better "spending performance" and do not up our productivity there will no be money left for the state to intervene.
Hon Minister, by your own forecast, our economy will grow by between 3% and 4%, but, unfortunately, by even mentioning the figure of 7% - a little bit of a pipe dream - and the millions of jobs that will follow that growth, I think you have created some sort of false hope for many unemployed people in South Africa. Let's rather start doing things slightly differently. Let's cut the red tape. Let's address the greed in this country. Let's deal with outrageous chief executive officer salaries and share options that are not sustainable.
The inequality in South Africa is fast becoming a huge stumbling block to growth. Let's deal with the holy cows in this debate and make sure that fundamental changes are being made timeously and not forced upon us, because if that happens, we will create instability in South Africa.
I think it is our time. I think it is time for the emerging markets of the world. I think Europe and the United States have had their time and I think it is Africa's time now. Let's play our role in this region. Let's make sure that the region integrates and let's use this window of opportunity that has been created after this recession. Cope will support the statement. [Applause.]