Zuma credibility gap on economic growth and jobs

17 February 2014 - 09:06 By The Times Editorial
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President Jacob Zuma made some surprising assertions during his State of the Nation speech, not the least of them the counter-intuitive claim that the recent spate of protests was a product of the government's successes in delivering services to the people, not of its failures.

Addressing our most pervasive crisis - joblessness - the president pointed out, quite correctly, that the government, business and labour need to work together ''to grow our economy at rates above 5% to create the jobs we need''.

The trouble is, Zuma failed to explain how this impressive growth rate would be achieved. His comment that, on average, the economy grew at 3.2% a year from 1994 to 2012 ''despite the global recession, which claimed a million jobs'' is not helpful.

The truth is that, as the rand plummets against the dollar and other major currencies, and as investment slows to a trickle, our country is experiencing pedestrian growth - latest estimates suggest that the economy will expand by a paltry 2.1% this year. Jobs are not going to be created in meaningful numbers at this rate.

The government's youth wage incentive scheme - which offers tax breaks to employers who take on young workers at relatively low wages - will help. But it is no cure-all.

Zuma, who pointed out that the government had created 3.7million ''work opportunites'' over the past five years, might be right in asserting that the Expanded Public Works Programme ''is an effective cushion for the poor and the youth''. A ''job opportunity'' is certainly better than nothing - it provides the beneficiary with a temporary income and priceless work experience.

But millions of permanent jobs are needed to make inroads against unemployment and only the private sector will be able to create them, through the investment of countless billions of rands. This will happen only if government policies create certainty and facilitate - not hinder - business, and make a bet on SA Inc irresistible to foreign investors.

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