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Cabinet targets huge unemployment drop

Oct 26 2010 12:20 Reuters, Sapa & I-Net Bridge

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Cape Town - The government said on Tuesday that unemployment should fall to 15% over the next 10 years from the current figure of 25% under a new economic growth plan.

The forecast implied the creation of 5 million jobs over that period, government officials said after a cabinet meeting to consider ways of reviving the performance of the economy.

The official jobless rate stood at 25.3% of the labour force in the third quarter of 2010, from a slightly downwardly revised 25.2%, Statistics South Africa said in its latest quarterly Labour Force Survey.

The total number of unemployed people was at 4.396 million in the three months to September, from a slightly revised 4.401 million in the second quarter.

South Africa hopes to boost its long-term growth via a weaker currency achieved through a "careful balancing" of more active monetary policy intervention, Minister in the Presidency Collins Chabane also said at the briefing to report back on the special cabinet meeting held on Monday.

"The macroeconomic approach entails a careful balancing of more active monetary policy interventions to achieve growth ... through a more competitive exchange rate and a lower cost of capital," Chabane said.

"The new growth path sets a target for creating five million jobs in the next ten years. This target is projected to reduce unemployment from 35% to 15%. This employment target can only be achieved if the social partners and government work together to address key structural changes in the economy," said Chabane.

Details would be progressively released as various affected parties became involved, but he said the plan aimed to be "unlocking employment potential" in six key areas.

These are infrastructure, agriculture, mining, the green economy, manufacturing and tourism, together with high-level service industries.

Chabane made the announcement of the plan together with Economic Development Minister Ibrahim Patel and Rural Development and Land Affairs Minister Gugile Nkwinti.

Patel said that more details would be released by Finance Minister Pravin Gordhan in his medium-term budget policy statement on Wednesday.

Asked if the plan included nationalisation, Patel said: "The growth path is based on the framework of a mixed economy. It does see a role for a strong and focused state."

He said despite the state's role, it was hoped the private sector would be the main generator of employment.

At the start of the press conference government spokesperson Themba Maseko ruled out any discussion about speculation President Jacob Zuma was reshuffling his Cabinet.

He said Cabinet reshuffles were not discussed at Monday's meeting, and any changes were Zuma's prerogative.
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