Busa: Policy consensus will boost economy

Johannesburg - While SA has some policy space to offset any additional negative global factors to a certain extent, the challenge remains to achieve more consensus around the right public policy choices, says Raymond Parsons, Business Unity SA (Busa) deputy CEO.

"If we want to stem current job losses as well as lay foundations for future job creation in SA, then we must concentrate largely on the factors which can make a difference locally, rather than agitate endlessly about overseas trends over which we can exercise little influence. The Medium-Term Expenditure Budgetary Framework next month should reinforce this message," said Parsons.

It remained essential for an emerging market like SA to be able to devise flexible responses to address the cyclical and structural challenges that exist given the economic uncertainties in the global economy, he said.

Parsons said the fact that SA is currently engaged in a new growth path is helping. The growth plan, he said, provides a useful framework and focus for what to do next.

Key global policymakers need to see what elements of hope can be discerned amidst the "doom and gloom" and offer strong leadership, Parsons said. US and eurozone authorities are currently battling debt problems worth billions of dollars.

Although SA could not completely avoid the impact of a global economic slowdown, the fact that it is an emerging market gives it "a margin of resilience".

Parsons suggested that if the new growth path and related policies want to make the SA economy bigger, the approach taken should sustain the present economic recovery, increase the actual and potential real economic growth rate to higher levels over time, and shape and implement policies and prospects that would promote higher job-rich economic growth, especially among the youth.

The main challenge for SA, Parsons said, is not whether the country would face another recession as this is unlikely, but whether growth would lose momentum in 2011.