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By Mpumelelo Mkhabela | Jul 01, 2009 | COMMENTS [ 0 ]

ECONOMIC Development Minister Ebrahim Patel has laid claim to macro-economic policy formulation that at present resides under Finance Minister Pravin Gordhan.

In his speech during the Department of Trade and Industry budget debate yesterday, Patel said he had wrested control of economic policy from the Finance Ministry.

"The mandate is clear," Patel said. "The Department of Economic Development will be responsible for developing economic policy with a broad, cross-cutting focus so that macro- and micro-economic policy reinforce each other and are both aligned to the election mandate."

It was the first time Patel spoke confidently about the mandate of the department that was created in May after Jacob Zuma's election as president.

In a presentation to Parliament last week Gordhan listed macro-economic policy coordination among the Treasury's first mandates.

He said the mandate was based on provisions of the Public Finance Management Act and the Constitution.

Gordhan recently also commented on maintaining South Africa's macro-economic framework.

But yesterday Patel said he was working closely with Gordhan and Trade and Industry Minister Rob Davies to give effect to his department's mandate, which he said included macro-economic policy development and economic development planning.

Patel quoted from Zuma's recent speech in Parliament on June 24, in which the president said the economic development department would address, among other things, macro- and micro-economic development planning.

Zuma had said: "We say this very much aware that, in terms of legislation, the Treasury coordinates macro-economic policy."

Patel and Zuma's speeches point to government's preparedness to amend the law to transfer macro-economic policy development to Patel's ministry.

Macro-economic policy, which broadly includes the monetary policy of inflation targeting and government's fiscal stance, have been driven from the Treasury since Trevor Manuel was finance minister.

Patel said he would soon begin engagement with other departments on a national framework for economic development and the creation of decent work.

His department would also interact with business and labour to develop consensus on economic challenges, policies and responses.

These would include beefing up the National Economic Development and Labour Council.


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