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Cape Town - Economic Development Minister Ebrahim Patel on Tuesday released the framework of the new economic growth path, aimed at enhancing growth, employment creation, and equity.
The policy's principal target is to create five million jobs over the next ten years.
Patel told the National Assembly's economic development committee via video-link from Pretoria the document reflected government's commitment to prioritising employment creation in all economic policies.
Among other things, it identified investments in five key physical and social infrastructure areas, namely energy, transport, communication, water and housing.
The new path saw the infrastructure programme as a trigger to build a local supplier industry for manufacturing components for the build-programme.
Jobs would be created in agriculture through interventions to improve efficiency by curbing the high costs of fertiliser and other inputs and by upscaling processing and export marketing.
More livelihoods could also be created through support for smallholders, including access to seeds, silos, tractors, finance, marketing, water, extension services and other key inputs.
In the mining sector, the document called for increased mineral extraction through reviewing the existing legal framework and improving infrastructure and skills development.
It focused support for beneficiation on the final manufacture of consumer and capital goods, which could create large-scale employment, rather than only on smelting and refining, which were relatively capital and energy intensive.
It foresaw establishing a state mining company concentrating on beneficiation and enhanced resource exploitation in competition with a strong private mining sector.
Research and development investment would be doubled to 2% of GDP by 2018.
Patel said the document recognised the challenges of an uncompetitive currency and set out clear steps for government to address the impact of the rand on the economy and jobs.
This included a somewhat looser monetary policy with lower interest rates, greater building of foreign reserves and a sovereign wealth fund to manage foreign reserves more actively.
The new path required that government widen the range of tools it used to address inflation.
Improvements in government
This would involve a stronger role for competition policy and strategic investigations into conduct leading to high and volatile prices for intermediate inputs for producers and basic consumer goods, including important commodities such as maize, steel and fertilisers.
To secure the necessary resources, vigorous effort would be undertaken to cut wasteful spending, tackle corruption and align the allocation of public money with developmental priorities.
The path foresaw innovative ways to raise funds for development, ranging from a development bond to more active use of the balance sheets of the Development Finance Institutions.
The document called for a broad pact between business, labour and government aimed at fostering employment creation while enhancing competitiveness and social equity and development goals.
The pact would include commitments on wages, prices, savings and jobs.
There was a proposal, for discussion with business and labour, for moderate wage settlements linked to clear commitments by business to save jobs, create new jobs and address inequality.
The path proposed major improvements in government, with a call for slashing unnecessary red-tape, improving competition in the economy and stepping up skills development.
It set targets for scarce and key skills and identified the role of government departments and agencies in working to meet these goals.
Key targets included the aim to produce 30 000 more engineers by 2014, and 50 000 more artisans by 2015, with annual targets for Eskom and Transnet and for individual SETAs to achieve this.
The document called for stepping up the focus on workplace training, targeting on-the-job training and refresher programmes for 10% of the workforce every year.
Patel said the new path would require leadership and strong governance.
"It takes account of the new opportunities that are available to us, the strengths we have and the constraints we face.
"The key challenge will be that of implementation and we are frank about the need for a more co-ordinated and effective state.
"We have too many agencies and too little co-ordination between them. We can only achieve our jobs targets if the state performs better and if the private sector grows in labour-absorbing parts of the economy.
"The growth path proposes ways to achieve that," he said.
