A new growth path for South Africa?

South Africa continues to face deep problems of unemployment, inequality and poverty. The South African government recently released a new economic policy framework, the New Growth Path (NGP). This policy is intended to facilitate ‘a restructuring of the South African economy to improve its performance in terms of labour absorption as well as the composition and rate of growth’ (Economic Development Department 2011, p. 2). This is a huge challenge given the country’s extremely high unemployment rate, middling growth record, and the continuing structural economic distortions that have not been fundamentally transformed in the past 17 years of democracy. In the NGP there is a significant shift from earlier post-apartheid economic policies. The Growth, Employment and Redistribution (GEAR) policy of 1996 can be characterised as broadly neo-liberal, including amongst its key tenets, tight monetary and fiscal policies, elimination of exchange controls, labour market flexibility and privatisation. In 2006 the government launched the Accelerated and Shared Growth Initiative – South Africa (AsgiSA) economic policy. This had as its pillars the expansion of public infrastructure investment, sectoral development strategies to promote private investment, improving education and skills, integrating marginalised parts of the population into the mainstream economy, improving macroeconomic management and enhancing public administration. The political background to the NGP is somewhat different to these earlier policies of the African National Congress (ANC) government. The current Jacob Zuma-led administration came into office in 2009 with backing from the ANC’s trade union and Communist Party allies and with expectations of some sort of leftwards shift in economic policy. A new Economic Development Department was created, headed by Ebrahim Patel, who until then was the General Secretary of the South African Clothing and Textile Workers Union. It was under this minister that the NGP was developed and championed, although it was formally launched by the cluster of economic ministries. The NGP has received mixed reactions. The main trade union federation, the Congress of South African Trade Unions (COSATU), which is in an alliance with the ANC, released a thorough critique of the NGP subtitled ‘One step forward, two steps backward’ (COSATU 2011) while in another statement welcoming it as ‘a giant step forward’. While recognising the NGP as a progressive shift, COSATU views the NGP as not going far enough, and is particularly concerned about the macroeconomic policies in the NGP as well as the proposed