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He was addressing the launch in Johannesburg of a joint declaration by the country's three major trade union federations and a grouping of important SA manufacturers on creating decent jobs.
"The declaration calls for interventions to ensure an appropriately valued, competitive and stable currency," Vavi said.
A competitive currency would allow SA manufacturing to compete on a footing similar to that of other developing countries, he said.
"The Chinese economy has grown because the Chinese actively intervene in their currency and they peg it at a particular level.
"Government from time to time speaks about the need for the rand to reach a competitive level, but we only really hear this in the Budget speech or the state of the nation address."
Vavi said the SA Reserve Bank confirmed that it bought "lots of dollars", but this was not enough.
"We need to see some aggression in terms of the competitiveness of the exchange rate, and more needs to be done."Borrowing must become more affordable
Vavi also called for a reduction in real interest rates, as well as the introduction of concessional finance for productive investment.
"Currently, the unavailability of finance and the exorbitant level of lending rates by the financial sector makes borrowing expensive," he said.
Vavi said that 171 000 jobs had been lost in the first quarter of 2010.
He was referring to last week's Quarterly Labour Force Survey, released by Pretoria-based Statistics SA.
According to the survey, the country's unemployment rate rose to 25.2% in the first quarter of 2010 - an increase of 0.9% from the pervious quarter, showing that SA's recovery was still fragile.
"SA is sitting on a crisis," Vavi said.
"And it has been sitting on a crisis since the inception of democracy because that economy was not restructured, because certain sectors that should have been supported were not, and because we didn't identify sectors that would give us a competitive edge."Vavi said if government "steamed ahead" with its Industrial Policy Action Plan (IPAP2) without taking cognisance of issues such as the rand and interest rates, the plan would not succeed.
"We won't address unemployment until we deal with the currency and interest rates."
He said the declaration would be published in several newspapers and urged all South Africans to attach their signatures to it.
Addressing the launch, Stewart Jennings, CEO of plate glass maker the PG Group, said macro- and micro-economic policies had to be synchronised.
"Until now, the goals of our industrial strategy have not adequately been supported by aspects of our macro-economic policies."
Like Vavi, he said the most urgent concern for employers in manufacturing was the "negative impact" of the overvalued and volatile rand.
"I personally would like to see the rand linked to a basket of currencies, but we need an urgent debate among the best economic brains on the local currency."
A further challenge that needed urgent attention was to find an approach to the country's energy needs that avoided "current excessive price increases".
Local industry needs a helping hand
Jennings said all South Africans could support government's efforts to build the country's domestic industry by buying locally-produced goods.
He suggested measures be put in place to create a preferential procurement framework that promoted local industries and locally-produced products.
"This call should not be interpreted as protectionism, but rather as nurturing our domestic industry," he said.
The three major trade union federations represented at the launch of the declaration were Cosatu, the Federation of Unions of SA and the National Council of Trade Unions.
Together, they represented three million members and large manufacturers employing over 100 000 workers.
SA manufacturers that signed the document included ArcelorMittal SA, Consol Glass, Hulamin, Bell Equipment, the PG Group and Altron.
- Sapa
