Economic development ministry gets agenda for new financial year

By Ofentse Mokae
23 March 2010

The newly created Economic development department will obtain its new plan of operation as the department’s budget vote is tabled in parliament today.

Minister responsible for economic development Ebrahim Patel, is expected to spell out his department’s agenda as well as plan of action for the new financial year.

Last year the former trade unionist stated that his department will draft economic planning proposals that promote the coherence and alignment of the state and its entities’ economic plans and foster South Africa's growth path and need for substantial job creation.

In his plan Patel gave the role in which his ministry will play in macro-economic policy with regards to identifying policy options available to the country and evaluating these against development and decent work goals.

The plan outlined that the Industrial Development Corporation (IDC), Khula Enterprise Finance and the South African Micro-finance Apex Fund will in future report to his department, instead of trade and industry.

The Independent Democrats’ Lance Greyling hailed the creation of the department stating that the department will now become a fully functional and independent entity that is able to implement its strategic mandate.

“The ID sees the creation of this Ministry as evidence that the government is attempting to pursue a more aggressive economic policy with the State intervening to address the structural constraints of our economy,” Greyling said.

Greyling however believed that this was long overdue as for too long many South Africans lived under the illusion that the economy was sound, while the unemployment rate remained one of the highest in the world.

“While we support this new economic approach, we do however feel there are some major pitfalls that we need to avoid as we embark on this ambitious programme,” added Greyling.

Trade union Solidarity shared similar sentiments.

“The formal sector is still suffering the effect of the recession and it may take a long time before the formal labour market reaches the employment levels recorded just before the recession,” spokesperson Jaco Kleynhans said.

He said although employment increased by 18 000 jobs from September to December last year Kleynhans maintained that this improvement is insignificant.

“To date, only about 5% of the estimated 351 000 job losses of the recession has been recovered,” he added.

The economic development ministry was established by President Jacob Zuma May last year as part of a reconfigured cabinet with a sole intention to centralise and focus on economic policy making.