Deputy Speaker, the lower growth anticipated in the next year is principally the result of the global economic slowdown, aggravated by recent domestic developments. The International Monetary Fund recently revised the global gross domestic product growth downwards with the declining output in Europe, and slower growth in both China and the United States.
This impacts on our economy with regard to a reduced demand for local minerals, as well as manufactured exports, and lower prices for commodities on global markets. Our exports to Europe fell by 6% in the first half of 2012. While exports to China and the United States are still growing, the rate of growth is significantly lower than what we saw in 2010 and 2011. Our largest commodity exports are platinum, iron ore, coal, and gold. The prices of platinum, iron ore, and coal have fallen by between 10% and 30% over the past two years.
In the face of the global economic slowdown, as well as the loss of production caused by the wave of strikes in the mining sector, we have taken steps to mitigate the impact on the South African economy. In short, we are facing strong headwinds, which means that we have to do more to sustain growth in output and in employment.
So, what are we doing about it? Firstly, the National Infrastructure Plan is intended to support domestic demand. If we can't rely on global demand, we have to stimulate domestic demand. Coupled with higher levels of local procurement, this can directly generate employment in construction and in the production of inputs, raise living standards and productivity, and so on.
Secondly, the Presidency recently agreed on a package of measures with organised business, labour movements, and community representatives, in order to address both the workplace conflicts and the global slowdowns. The package includes an accelerated set of infrastructure interventions; a common commitment to defending and strengthening normal collective bargaining practices, coupled with efforts to support the speedy return to work by striking mine workers; support for the rule of law and an end to violence; upgrading of housing and services, particularly in mining towns; and agreements to expand public employment schemes, and to identify funding for measures to help workers and companies affected by the economic slowdown.
We met with representatives of business, labour, and community organisations yesterday. We got a report from people in the mining sector. They indicated to us that there had been some success in getting workers to return to work, particularly in the gold mining sector. Of course, more needs to be done. But it does demonstrate that we, as South Africans, are able and willing to work together when faced with the kind of challenges that we are faced with now. Thank you. [Applause.]
Hon Minister, when you announced and launched the New Growth Path, NGP, at the end of 2010, you promised the delivery of about 5 million jobs by 2020. To date, the figures in the announcements that you have made have amounted to only 330 000 jobs.
More than 18 months have passed since the announcement of the NGP. You should by now have created at least 750 000 jobs through the interventions made by the Department of Economic Development. So this means that the current figure presented by you recently falls some 420 000 jobs short of the original target. Unemployment has become significantly worse since then, and the growth rates have also declined.
Is it not true, Minister, that the New Growth Path is making little or no contribution to growing our economy and reducing unemployment? Do you still believe that the NGP can deliver on its promise of creating more than 4,5 million jobs by about 8 years from now?
Chairperson, I would suggest that the hon member perhaps look at the figures again. The figure of 330 000 jobs that was quoted was for a 12-month period. We have provided information to this august House previously on the performance on the jobs front over the entire period since October 2010.
We have also pointed out that Cabinet set a much smaller target for the first year, in order for the target to grow incrementally over this period. That's how growth works. You don't achieve a numerical target simply by dividing it by 10. You build the foundations of long-term growth - you invest in infrastructure, get your skills policies right, and expand your markets on the African continent, and then progressively your job numbers and growth rate will grow. We are confident that we can still achieve the 5 million new jobs by 2020. Thank you.
Thank you very much, Chairperson. Hon Minister, is there a difference between the approaches to economic growth spelt out in the New Growth Path and the National Development Plan? If there is a difference, what is it, and which of those two plans is favoured by your department?
Chairperson, I thank the hon member for that question. Let me perhaps reply in the following way. The National Development Plan is our overarching vision, bringing together economy, demographics, skills development, rural development, and so on. That pulls together the entire thinking and work of government, and it is supported by my department.
The New Growth Path is the economic strategy within which we seek to achieve measurable and consistent goals on jobs and other areas. The National Development Plan's job numbers extend over a longer period. As the hon Minister Manuel has said, it's entirely consistent with what the Cabinet has adopted in the New Growth Path.
Then, under the New Growth Path is the Industrial Policy Action Plan, which is the manufacturing driver. They all fit together very well as the way to go in going forward.
The perspective that each of these seeks to convey is captured by the priorities this administration has set for itself, as informed by the manifesto that the ruling party put to the people of South Africa in 2009. There is no contradiction, and we are working as one unified government to create jobs and achieve our economic goals. Thank you. [Applause.]
Thank you, Chairperson. Hon Minister, we heard in the committee recently that the rate of resignations from your department is a little bit high and, on top of that, your department is supposed to be mandated with the responsibility of creating jobs in the economy. It does not set a very good example if some of your staff members are leaving your department. Most surprising is that up to now you still have an acting director-general, after two years of existence. Could you explain this, please?
Chairperson, that's an entirely different question, which falls completely outside of the ambit of this question, but I am very happy to answer it nonetheless.
Let me make the point that I don't agree with the statement that the rate of resignation is higher. Then, with regard to the director-general's acting over this period, the hon member should be educated about the fact that we had a director-general. That director-general was transferred to the Public Service Commission and a vacancy arose as a result. That is the vacancy that we have advertised and that is the vacancy that we intend to fill imminently. Thank you.
Thank you, Chair. Hon Minister, in any situation there are always pros and cons with pros being the opposite of cons. It follows, therefore, that "progress" is the opposite of "congress".
Now, the New Growth Path, NGP, is suffering immensely under the Congress of South African Trade Unions. Minister, are you satisfied or can you give an assurance that, or can you give an indication as to whether, the NGP is going to be able to move forward under the tension that it is continuing to feel from the Congress of South African Trade Unions?
The congress is a stumbling block. The Minister announced the youth wage subsidy, and that congress was against it. So, are we going to see a situation where this congress is continuously against everything that is being proposed? If that is the case, then we have a serious problem.
Chairperson, perhaps the hon member would be well advised to put those kinds of questions to that congress! I cannot speak on its behalf. [Applause.]
What I can indicate is that - while Cosatu expressed reservations about aspects of the New Growth Path when it was released, and we wanted a public discussion on policy - it has also signed a number of accords that flow from the New Growth Path. These include a memorandum of understanding on infrastructure, and accords on local procurement, the green economy, skills development, and working together on basic education. It has endorsed the targets of the New Growth Path.
Our challenge now is to ensure that at the workplace level the co-operation between business and labour is fostered, because that is where wealth is created. We have had very positive signals and very positive signs in practice, and we think that the debates that we have started have been helpful in clarifying parties' positions. They have moved beyond just asserting their opening positions and have begun to reach out and build a practical partnership. You have seen examples of this in the mining sector recently, where Cosatu and its affiliates have worked with the Chamber of Mines and others to help stabilise the industrial relations environment. Thank you.
Progress made towards regional economic integration
318. Ms S C van der Merwe (ANC) asked the Minister of Trade and Industry:
What progress is being made towards regional economic integration, particularly in respect of the Tripartite Free Trade Area (FTA) process between the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA), and the East African Community (EAC)?