23 January 2006

South Africa's economy is capable of growing considerably faster than it has in the past. That's the view of a panel of international experts roped in by the government to evaluate its economic growth plan and come up with new ways to boost the country's growth rate.

The panel of 13 economics and politics experts from Harvard University, the Massachusetts Institute of Technology and the University of London - as well as members from Canada, France, India and Turkey - met with President Thabo Mbeki, Deputy President Phumzile Mlambo-Ngcuka and Finance Minister Trevor Manuel in Pretoria on Thursday.

The panel had already met with various government departments, economists, trade unions and business representatives in the country.

Speaking to journalists after the meeting, Manuel said that while the government's plan - the Accelerated and Shared Growth Initiative for South Africa - was already being put in place, some of the diagnosis needed testing, hence the need to draw lessons from other countries.

Manuel said the panel "told us that we are not ambitious enough and that we have to be thinking long-term".

He added that the team was not at the point where it could make firm recommendations, as this was only its first meeting. It was expected to return within a year with suggestions for putting the economy on a higher, more sustainable growth path.

"President Mbeki has asked us to think out of the box in order to come up with constructive ideas," said Richardo Hausmann, a professor of economic development at Harvard University.

"We'll be focusing on the nature of opportunities that arise from the rise in commodity prices, and the new opportunities outside natural resource exploitation," he said.

Dani Rodrik, professor of international political economy at Harvard University, said there was a need to be bold and ambitious, adding that the government needed "to be much more focus on key areas than broad based".

The government is aiming for an average annual economic growth rate of 4.5% until 2009, and for a 6% growth rate thereafter.

SouthAfrica.info reporter

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Economy overview South Africa is the economic powerhouse of Africa, with a gross domestic product (GDP) four times that of its southern African neighbours and comprising around 25% of the entire continent's GDP.