Orthodox economics failing SA - Patel

Wednesday, March 24, 2010

Cape Town - South Africa needs to break away from orthodox economic models and start focusing on policies that will respond to the country's development needs, says Economic Development Minister Ebrahim Patel.

Speaking at the launch of the Next Economy National Dialogue on Tuesday night, Patel said the success of countries like China, Malaysia, Japan and even Brazil were proof that orthodox economics was not the only way to go.

The project, which is an initiative of Patel's department, Cape Times and the SA New Economic Network, aims at driving economic debate around the country and to get ordinary South Africans involved in economic development.

Patel told the audience of about 200 that there was a picture in South Africa that many chose to ignore.

"If you look at this picture, you see this wide gap between the poor and the rich, rising unemployment, and we continue to follow orthodox (economics) instead of looking at what is working for us," he said.

Patel argued that for South Africa to grow the economy and address issues of inequality, ordinary citizens needed to have a say in the formulation of economic policy. He said South Africa's uninterrupted growth before 2008 was based on unsustainable ways and mainly fueled by credit consumption.

"We can't keep on like that; we need growth that is sustainable and that can only be achieved through descent and sustainable jobs and the work we do now should be inspired by a new growth path," he said.

"If we are to have real dialogue to build consensus, can we find ways to explore new ideas to do what China has done? China has not followed a book nor has Malaysia... South Africans must be able to find answers to their problems," added Patel.

Cosatu General Secretary, Zwelinzima Vavi, said South Africa has been sitting on a "time bomb" for a very long time.

"This inequality and joblessness is not something that has been brought by the recession, it's been there for years. Let us not blame the recession - it just made things worse.

"Before the recession, South Africa was already in deep structural unemployment. The dialogue signaled hope as it would allow South Africans to be part of a solution because in a revolution you do not sideline the masses or the revolution will fail," said Vavi.

Business Leadership South Africa Chairman, Bobby Godsell, said South Africans must be honest enough to debate even the most sensitive issues in the economy.

"We need to talk about transformation and entrepreneurs. We need to develop a shared dream and for us to do that we need rules that celebrate people who get rich justifiably and we need rules that act against people who get rich unjustifiably," said Godsell.

Most Read