"We're stuck in a crisis," says Ann Bernstein, head of the Centre for Development and Enterprise, a think-tank that has done a lot of research culminating in the release this week of a "growth agenda" to get us out of the crisis. What South Africa should be focusing its collective mind on with absolute urgency, she says, is accelerated economic growth and mass employment.She believes GDP growth of 4% a year is the bare minimum the country needs to avert disaster. To achieve this, South Africa must be internationally competitive.This will be familiar to anyone who has read the National Development Plan.A "major difference" is that she believes South Africa can be internationally competitive in low-skill manufacturing, which she sees as the best chance we have for relatively speedy and massive job creation. The NDP rules this out because it clashes with the mantra of "decent" work and minimum wage levels."We disagree fundamentally with the NDP," she says.story_article_left1While imposing these requirements on the private sector, the government itself has ignored them in its expanded public works programme, she says.It pays wages "well below the minimum permitted in most industries", and "violates all the decent-jobs" requirements it demands from the private sector.The same leeway needs to be extended to private companies to encourage them to create low-skilled jobs, she says.One of her proposals is for an export processing zone in the Nelson Mandela Bay metro to capitalise on all the jobs leaving China as wages there rise and manufacturers look for new locations."If we could get a small fraction of those jobs ..."The zone must be run by a private entrepreneur with an interest in making it a success."And employers have to be able to negotiate wages with their employees within a framework of basic health and safety."Special economic zones have not had much success in South Africa, Coega being the latest and probably most expensive example.This is because the government, which insisted on owning the project, didn't think about what would make the Coega industrial zone special - other than cheap electricity, which of course didn't happen."You've got to engage with the markets," she says. "You've got to say: 'What kind of investors can we attract, why would they want to come to this place rather than somewhere else, what would make this zone special compared with the rest of the economy?'"If Ethiopia, one of the poorest countries in the world, with hardly any infrastructure, can do it then so can South Africa, which has more infrastructure than most developing countries."The government there said it wanted a zone to get some low-skilled jobs. They went to China, found Chinese investors and said: 'What do you need?' They now have, in this dreadfully poor country, a shoe export industry that provides 12000 jobs and is growing."block_quotes_start You’ve got to say: ‘What kind of investors can we attract, what would make this zone special?' block_quotes_endThe fact is that South Africa needs to provide jobs for the people it has right now, who are mostly unskilled or low skilled, and it doesn't have much time. This is the reality and it needs to respond more creatively than it has, she says."We need to be clever."She cites Costa Rica, which linked employers with training institutions that asked what kind of workers they needed and trained them in those skills."They got an excellent synergy going, which we're struggling to do in our economy."Mauritius is another success story South Africa can learn from."A very poor country, it did a lot of the things we're talking about. Allowing employers and workers to sort out wages, for example. They focused on textiles for export and did so well they're now moving up the supply chain to more sophisticated products for export."Another key difference between her proposals and those in the NDP, says Bernstein, is that the NDP pays insufficient attention to the role of cities as drivers of growth."The thrust of our national growth plan has to be in the cities, which already provide most of our economic growth and employment."The key is to think through the consequences of South Africa being an increasingly urbanised society and how we can ride this wave to the benefit of everybody."Rural development cannot be ignored, but there are many parts of rural South Africa that are overcrowded, she says. "We need more people to urbanise."Wouldn't this be a recipe for mega urban slums?story_article_right2Unlike many other developing countries, South Africa doesn't have only one capital city into which everyone pours when they urbanise, she says."We're not necessarily destined to have everyone pouring into Gauteng."But the fact is that they are pouring into Gauteng, and Johannesburg is not coping.Only because it is being badly managed, she says."We're saying we need the A-team to run Johannesburg. It needs to be managed properly."We tend to think the most important jobs are in the cabinet. But running Johannesburg is probably your third most important job in the country... we propose that for the large cities we should look at directly elected mayors. That would change the dynamic completely."A combination of the blindingly obvious and wishful thinking?"I would disagree. We're saying choose priorities. We're saying the large cities are very important. Stop talking about 284 or whatever local governments. Let's put our focus on our largest cities. Let's make sure they are run with the best possible people."These are the drivers of growth and employment. The consequences of getting that right spill over for the national economy and the resources we have to help people outside those places."Her growth agenda also emphasises the urgent need for business to play a more muscular role. It needs to stand up for itself and resist destructive government policies more publicly and proactively, she says."We're saying to business: 'Speak out. Be clearer on what you really mean.'"Business leaders claim that they do speak truth to government - behind closed doors. This is not what democracy is about, she says.block_quotes_start It's time business had their own view of what works and what doesn't work here block_quotes_end"In a democracy you have to mix behind-the-scenes talk with participation in the public hurly-burly of debate, in contestation. If you don't do that you are not influencing how people talk about companies and growth and how South Africa should move forward."Business has been ineffective in communicating the benefits for society of having large, successful companies."Just doing business has enormously positive consequences for society," she says."You can't have senior ministers in government saying that the private sector has to produce the growth and the jobs that we need for this country, but at the same time fellow ministers are attacking business as vultures."She says there is too much talk about "business and government". This "personalises" the relationship and perpetuates mutual mistrust."We should talk more about states and markets. You want competitive markets enabled and regulated by smart states ..."story_article_right3What the country does not need is a pro-business government, because this leads, and has led, to crony capitalism."We need a pro-markets government and rules-based capitalism."She says business needs to take the lead on spelling out how BEE can contribute to economic growth and transformation "in all the positive senses of that word". Instead, BEE is hampering growth and transformation and accelerating the process of "elite enrichment"."We are calling for business to set up a commission to look at how to link transformation with economic growth."BEE must link with growth rather than undermine growth."State-owned companies have been used as vehicles of elite enrichment, which has prevented them from contributing to transformation as they should have through efficient service delivery, Eskom being a prime example."It's time business had their own view of what works and what doesn't work here. It needs to think this through for their own sake because the demands on them [in terms of BEE] are relentless.Business needs to put forward firm proposals about how BEE can be linked to growth, she says.Then, she says, those pushing for an elite, the insiders, "will be on the defensive and must explain to the country why what they're saying is good for everyone and not just the connected few"...