 Important plan could do a lot more THE updated industrial policy action plan (IPAP2) was launched this week without the attention it deserves. The Department of Trade and Industry has decided to implement the programme over a three-year period and evaluate it annually, in the same way the Treasury’s budget is handled. This is an improvement as it will in theory allow regular adjustments to be made with input from all of SA’s social partners — the government, business and labour. The big question is whether this co-ordination will happen, given that the plan is widely seen as top- down intervention in the economy by a government with unrealistic or unreachable goals. The IPAP2 is a blueprint aimed at invigorating SA’s beleaguered manufacturing sector and creating enough jobs to slash the country’s unemployment rate to 15% from 24% in the coming decade. The programme will be driven by R66bn of concessional loans from the Industrial Development Corporation to sectors seen as having the potential to thrive. The document begins with a refreshingly frank assessment of the challenges to manufacturing, including the lack of skills, ageing infrastructure, and weak investment from the private sector. It admits that manufactured exports will be "faced with a long and painful adjustment period" as their main destinations are Europe and the US, which are both recovering very slowly from the global economy’s downturn. But like the government’s New Growth Path, the updated industrial policy ventures into the arena of macroeconomic policy - which is the domain of the Treasury. According to the document, success hinges on macroeconomic policies that are "favourable", relative to SA’s main trading partners. These are, first, a "competitive and stable exchange rate" and, second, a "competitive real interest rate structure." There is wide agreement that SA needs a currency that is stable and competitive, but not everyone understands that this is impossible for a small country to engineer in global markets. Eyebrows will be raised at the mention of a "competitive real interest rate structure". Since when has the government tried to dictate monetary policy to the independent Reserve Bank? Business welcomes the support mooted for a wider range of industries, particularly those for oil and gas, and boat-building. Boat repair is another opportunity given that piracy off the northern coast of Africa has led to more shipping traffic around the Cape. A crackdown on obstacles to fair competition is another plus. But there is a sense that the IPAP2 is trying to do too much and should focus on its priority growth areas. There are also complaints that too little is being done to create an environment conducive to private business. Inflexible labour rules are seen as a deterrent to hiring apprentices and teaching them the skills they need to become fully fledged employees. At the same time, the IPAP2 does not do enough to align the skills of workers to the needs of private business, executives say. And so far, pleas to trade unions for wage-demand restraint have fallen on deaf ears — the National Union of Mineworkers said yesterday it wanted a 20% wage increase this year. In the next two years, the department aims to finalise a national artisan development programme agreed between the Department of Higher Education and some of the key sector education and training authorities. But there is no mention of support for plans to revive technical colleges, which could go a long way to alleviating the skills shortage. The new plan may have its flaws, but support is crucial — manufacturing accounts for 15% of the economy and more than 13% of jobs. Business must come to the party and the government has to listen. You are subscribed. This footer can help you. Please POST your comments to [email protected] or reply to this message. You can visit the group WEB SITE at http://groups.google.com/group/yclsa-eom-forum for different delivery options, pages, files and membership. To UNSUBSCRIBE, please email [email protected] . You don't have to put anything in the "Subject:" field. You don't have to put anything in the message part. All you have to do is to send an e-mail to this address (repeat): [email protected] . |
- [YCLSA Discussion] Support IPAP2: It's crucial - Bus... Dominic Tweedie
- Re: [YCLSA Discussion] Support IPAP2: It's cruc... Sithembewena Tsembeyi
- Re: [YCLSA Discussion] Support IPAP2: It's cruc... mercy matamela
- Re: [YCLSA Discussion] Support IPAP2: It's ... Dominic Tweedie
