The focus of Asgi SA has been to improve fixed investment, bringing it up to 25% of GDP by 2010. Are you on track to achieve that?
Looking at the numerical trends, we are. We started at 16% and after nearly three years we are at over 20%. But the next five will be much more difficult, obviously, because for the next two years we are going to have lower private-sector investment - and also because it's easier to get from 16% to 20% than from 20% to 25%. If our response to the power crisis is effective, we should make it.
AsgiSA also aims to halve unemployment and poverty between 2004 and 2014. What measures are you using?
In 2004 unemployment was 28%, so we need to get it down to 14% by 2014. We are going to finalise a poverty line in the next month and, whatever that is, we aim to have poverty halved by 2014. If you look at the Income & Expenditure Survey it is possible to reduce poverty quite dramatically. Our inroads so far have come from social grant payments - the next part will be more difficult.
What are the poverty numbers?
Most data shows that over the five years between 2000 and 2006, there was a 20% reduction in poverty. So, in the first half of this decade, we made quite significant strides, but it was mainly due to social grants and partly due to rising employment. But we obviously can't continue to increase social grants, as 12m people are already receiving grants.
And the employment target?
Over the whole 10-year period, the targets assumed a growth rate of over 5%. But we broke that up into targets of 4,5% for the first period until 2009 and 6% for the second period of 2010 to 2014. Unemployment has come down to 23%. It's good but it's easier to come down from 28% to 23% than from 23% to 14%. That's a stretch, but not unrealistic.
Apart from the power crisis, do other factors, like inflation and a US recession, threaten these targets?
It doesn't seem like it. Treasury estimates we will grow at 4% this year. Some of the banks are predicting 3% to 4% - even if we grow at that level, we will still come to our 4,5% for the first period because the other years were about 5%. Most of the forecasts for 2010 are quite bullish - around 5% or higher - so it suggests economic growth will go up again.
What are the key macroeconomic priorities for AsgiSA now?
They are not that different from earlier on. We have to find a balance between inflation and investment, and the Reserve Bank is trying to do that. The volatility of the currency is the most damaging to export-orientated industries.
Should that be managed by building up foreign exchange reserves?
Yes. There are countries that build up their reserves more quickly than we do. Look at Nigeria - they have rapidly overtaken us in building up reserves. Obviously, it's up to macro authorities to judge when and how fast to accumulate.
Another of Asgi SA's key strategies was to create 1m employment opportunities through public works jobs in five years. Are you nearly there?
We're probably there - by September 2007 we were at 954 000 jobs.
These are temporary job opportunities, not jobs. What impact do they make on unemployment and poverty?
Generally, not enough of an impact. There have been constructive criticisms that have indicated we need to find ways to make these jobs more sustainable and allow people to accumulate social capital. The average time spent on construction jobs [which have the highest numbers] is five months - that's not enough. Public works is developing policy to look at a new generation of public projects, which we hope will kick off in April next year.
Would those be longer jobs?
We will probably set the target in terms of full-time jobs. People would not be employed every day, but for a certain number of days a week over a longer period.
How important are the public works jobs to meeting AsgiSA's unemployment target?
At the moment we are probably meeting 7% of the deficit through public works jobs. If we improve it, maybe we can take it up to 10% or 20%. But I don't think it can be higher and other jobs are needed to meet AsgiSA targets.
There are new public works programmes in childhood and home-based care. Are those scaled up yet?
Numbers are close to 40 000. That's not a lot but the difference is that these are generally full-time jobs and often for a longer duration. But we think we can employ more people in the educare field.
The ANC conference took a resolution on youth unemployment. Are you considering a youth wage subsidy?
That's on the table. In one of the Harvard Group papers [the group of academics advising government ] a proposal is made for a voucher for young people. The question of some sort of a subsidy is under discussion but it's nowhere close to finality. What I can say is that serious consideration will be given to finding ways to bring youths into employment.
TOP COMPANIES 2007
