The Democratic Alliance (DA) has proposed five steps for the government to realise the Accelerated and Shared Growth Initiative for South Africa (AsgiSA).
Briefing the media at Parliament on Monday, DA spokesperson Ian Davidson said there is great value in a single economic plan to harness initiatives to accelerate economic growth, and to ensure that more South Africans stand a chance to benefit from this growth.
The government’s plan, AsgiSA, is now one year old, but has ”three major deficiencies”.
Firstly, the high incidence of crime, and particularly violent crime, is a ”binding constraint” on improved economic growth and is completely ignored by AsgiSA.
Secondly, in putting together the AsgiSA plan, government assumed it could choose ”winning” sectors from the private sector and back them through interventions and capital allocations.
Thirdly, export-orientated manufacturing would absorb precisely the kind of labour that South Africa has a surplus of. Despite this fact, the promotion of this sector does not bear any focus at all.
”As a result of our research, we have come up with five proposals that the government should adhere to if it would like to realise the accelerated and shared economic growth of our country,” Davidson said.
Crime should get the necessary prominence in the plan to signal that government is committing itself to dealing with the issue as a matter of urgency, he said.
The private sector should be given a greater role in choosing priority investment areas, and the expansion of sectors that will create jobs should be prioritised, rather than the expansion of sectors that are labour-intensive.
Job-creating sectors might not necessarily be high economic growth sectors, but might also contribute to an enabling environment, such as social and community services.
Investment should go to priority projects, not to priority sectors.
Public funds are best invested in projects to make industries work, rather than in specific industries.
Examples include investment in projects to improve labour productivity, turning South Africa’s industrial development zones into export-processing zones and establishing a fully fledged one-stop shop service for small business development.
Finally, manufacturing and export promotion should be prioritised, with building a manufacturing and export-friendly economy at the heart of AsgiSA.
Examples of specific initiatives might include reducing the cost of labour through wage subsidies, and gradually reducing corporate tax rates.
”It is our hope that our initiative to get AsgiSA working will be met by the government and our colleagues in Parliament in the same constructive manner with which it was intended,” Davidson said. — Sapa