Johannesburg - The government has not created the right
climate to achieve the targets of the new growth path economic strategy,
according to a study by the Bureau of Market Research (BMR) at Unisa released
"It became clear that the conditions created by
government do not favour the achievement of the stated targets,"the BMR
said in a a statement.
The new growth path (NGP) aims to increase economic growth
to sustainable rates of between 6% and 7% a year in order to create five
million jobs by 2020. This would reduce the unemployment rate to 15%.
Official unemployment in the second quarter of this year,
according to Statistics SA, was 25.7%.
For higher economic growth to translate into more jobs,
economic growth needed to be labour absorptive.
The researchers - Professor Carel van Aardt, Professor André Ligthelm
and Johan van Tonder - looked at whether this would happen in South Africa.
They found that employment growth was negative in five of
the 10 years between 2001 and 2010, while only one year of negative economic
"Employment in especially the agricultural and mining
sectors suffered, each registering seven negative employment growth
years," the BMR said.
They came to this finding through analysing the relationship
between gross value added (GVA) - a measure of the value of goods and services
produced in an area, industry or sector - and employment per sector.
The researchers also found a weak relationship between
GVA and employment creation in most of the sectors.
"This implies that factors other than economic growth
have a major impact on both job creation and job destruction in South
Africa," the researchers said.
This could be due to employers favouring capital over labour
"Higher economic growth, for example of 7%,
will thus not automatically translate into the creation of 5 million
jobs," the BMR said.
"Should this preference for capital persist, economic
growth rates of more than 10% per year might be necessary to create the 5
The researchers calculated a capital to work ratio to see
whether the sectors the NGP was focusing on would create jobs.
The NGP had identified utilities, transport and
communication, construction, agriculture, mining, and manufacturing as sectors
which could create jobs.
The researchers found a major shift away from workers to
capital in all but one of the economic sectors.
"Interestingly, in all the sectors identified by the
NGP to be or become labour absorptive, a preference for capital over labour has
developed since 2000. In fact, only in the financial sector did the
capital-worker ratio decrease."