Think about economic growth and job creation and hardly anything else.

Click on the link to read Tim Harris’s article The DA’s proposals will help to build a dynamic economy in SA first published by Business Day in BDlive (free registration is required).   Thanks to Business Day for allowing these random extracts to be posted.

 “Taken together, these proposals will help to break down the barriers that maintain the insider-outsider economy and prevent people from getting a job, from having a real stake in the economy, and from enjoying a better standard of living. They will help to build a dynamic economy that opens and expands economic opportunities to all.”

The entire article needs to be read by clicking on the link or going to Business Day.

“This past weekend, the Democratic Alliance (DA) kicked off a nationwide campaign to take our ideas for how to accelerate growth and create jobs to every South African. Our new Plan for Growth and Jobs sets out a revised policy agenda for economic change that will open job opportunities to millions of South Africans. It shows how we will work to change our economy from one that grows by 3% a year to one that can grow by 8%.”

“Economist Robert Lucas said: ‘Once you start thinking about economic growth it’s hard to think about anything else’. Taking his lead, we began our policy review by looking at the economic performance of other middle-income economies and found that economies such as Peru, Ghana and Vietnam have all recently achieved peak annual growth of 8% or more, and their average growth rates have exceeded 6% over the past decade. This has allowed them to tackle social ills such as poverty, unemployment and inequality.”

Growth constraints

“There are many constraints to growth in SA, but underpinning them all is the fact that too many South Africans are left out of the economy and are unable to make a contribution to driving growth because they can’t find work; they can’t attain skills; they can’t start businesses; and they lack access to capital assets.”

Lack of economic participation

“In short, too few people in SA actively participate in the country’s economy. SA remains a country of insiders and outsiders, with Big Government, Big Unions and those in Big Business that abuse their market power on the one side, and the majority of South Africans on the other. But it’s not just that we’re not utilising our labour potential. We are also underachieving in product markets that remain uncompetitive and dominated by large private and, sometimes, public sector players. Only 9.1% of the eligible population is engaged in entrepreneurial activity. This is less than half the proportion in comparable middle-income developing countries such as Argentina, Thailand and Chile.”

Making markets work

“The DA’s solution is to make markets work for the many, not just the few. The state has a responsibility to intervene when markets fail, but also when powerful public and private sector players abuse their market power at the expense of others.”

“This is central to our vision of a state that provides an enabling environment for economic growth by ensuring access to markets, credit and skills; limiting negative external factors; attracting trade and investment; and ensuring the economy has the infrastructure it needs in order to grow.”

Five sets of reforms

“Our new policy proposals are divided into five sets of reforms, each with numerous policy proposals, with only a small number mentioned here:”

• Ensure labour intensive growth.

• Roll back inequality and align executive pay to company performance.

• Boost competition across the economy.

• Promote trade and investment.

• Ensure sustainable growth.