Special Project 6: Framework for South Africa's response to the International economic crisis

The President of the Republic of South Africa convened a special Presidential Joint Economic Working Group (PJEWG) meeting on 04 December 2008 to discuss the implications of the Global economic crisis for South Africa. The PJEWG dealt with issues ranging from the analysis of the global economic crisis, the impact of the international environment on South Africa, examined various economic scenarios and posed a question on what was to be done.

It was agreed that a Presidential and Nedlac Task Team be set up to commence work on developing a response package for South Africa. The proposed package was to seek to respond to the global economic crisis that has, since September 2008, seriously impacted on growth and social cohesion in a number of countries and which has started to affect employment and growth prospects in SA.

Business and the Social Partners recognise that the global situation has deteriorated significantly and that South Africa is being negatively impacted by the crisis, but still very unclear how long it will last.

The following Task Teams have been established to give effect to this:

• Leadership Team
• Finance and Investment Task Team
• Social Interventions Task Team
• Employment Measures Task Team
• Distressed Sectors Task Team.

Key Priority areas of the Task Teams

Leadership Team:

• Funding mechanisms, including proposal for a Jobs Fund and Integration of different mechanisms.
• Infrastructure funding including Development bond;
• High Level Engagement with the CEOs in the financial sector
• Trade policy tools, with specific reference to the issue of applied and bound rates;
• Local procurement
• Consideration of what can be done to avoid early or unnecessary resort to retrenchment;
• To deal with broader issues in the Framework such as;
• Macro-economic issues, including;
• Monetary Policy;
• Addressing the Balance of payments constraints;
• Global coordination: G20, IMF, WB, WTO, ILO;

Members of the Leadership Team

Finance and Investment Task Team

Key priority areas of the Finance and Investment Task Team

• How to ensure that at least R787 billion is raised for the public investment programme and spent in projects with the largest social, employment and economic return;
• Develop Proposals to fast-track the public investment programme;
• Define the Role of DFIs in public investment programmes;
• Identifying additional sources of funding;
• Identify Priorities, financing and capacity constraints;
• Engage the financial sector on the flow of credit

Members of the Finance and Investment Task Team

Social Interventions Task Team

Key priority areas of the Social Interventions Task Team

• Emergency Food Relief Programme;
• Food for All programme;
• Cost-drivers in the food chain;
• Competition measures to address food prices;
• Investigate Community-based food production on a mass scale;
• Fast-tracking spending on Fund for Social Relief of Distress;
• Social transfers, the child grant and old age pensions;
• Role of cooperatives, support measures, funding and regulation;

Members of the Social Interventions Task Team

Employement Measures Task Team

Key priority areas of the Employment Measures Task Team

• Develop Proposals to avoid early or unnecessary resort to retrenchments;
• Address Public sector related issues in the Framework ;
• Expanded Public Works Programme;
• Training layoffs;
• SETAs;
• Labour broking and outsourcing;
• Social plans;
• Unemployment Insurance Fund; (UIF)

Members of the Employment Task Team

Distressed Sectors Task Team

Key priority areas of the Distressed Sectors Task Team

• Sustainable local procurement;
• Fast-response mechanisms for companies in distress;
• Sectors in distress and strategic responses to them;
• Sectoral coordination;
• Electricity pricing/rationing and its Impact;

Members of the Distressed Sectors Task Team

STATUS: Process to develop action plans is underway

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