The South African economy is buffered to some extent from the current downturn in economic growth experienced globally thanks to its improved export competitiveness and rising share of export markets, according to Minister of Trade and Industry Alec Erwin.
Briefing the media at Parliament on Thursday, Erwin said: “South African exports are always affected by global growth, but recently our exports have been more influenced by competitiveness. We have been able to increase our export market share, providing somewhat of a buffer to the international downturn.”
He added that if there was indeed a war in Iraq, he did not believe the South African economy would suffer as much as that of other African countries.
“The impact of a war on oil prices would be serious and problematic, but South Africa is in a positive position. We believe a war would hurt Africa a lot.”
Erwin also noted that the impact of rising food prices stemming from the depreciation of the rand last year was working itself through the economy “far
faster” than previously had been the case, and that the strengthening of the rand in recent months had helped to mitigate food price inflation.
On the government’s employment strategy, the Minister said that the government had recently aligned all of its various job-creation strategies under the Department of Labor to create a comprehensive approach to deal with unemployment.
“We know we can succeed in job creation since we have undergone deep changes in the structure of the formal sector. Now we are moving up the U-curve, having seen an increase in both formal and informal sector employment recently.”
The challenge, he said, was to move the unemployment rate to levels comparable to those seen in other countries, which was generally below 12%.
“The fundamental strength of our economy and our ability to access resources, will help provide a base for employment creation. We are looking for a good year on the economy, now in its eighth year of consistent growth and one of the longest sustained periods of growth the country has experienced. We are beginning to see the benefits of this.” -I-Net Bridge