Patel's plan to weaken South African rand no answer

South Africa's economic development Minister Ebrahim Patel's plan to weaken the rand by cutting interest rates is unlikely to gain support in government and would not increase the country's competitiveness. His proposals on the rand are at odds with the policy articulated by both the central bank and the Finance Ministry and raise old questions over who exactly is driving policy.
-- 'New Growth Path' calls for looser monetary policy
Patel released his "new growth path" last month, a set of policy measures aimed at quickening South Africa's economic growth to create jobs for millions that continue to live in poverty, even 16 years after the end of apartheid.
"I do not think it's a good idea," said Tony Twine, economist at Econometrix. "Weakening the rand is an inflationary tactic which simply camouflages the inability of the economy to work efficiently."
The rand has gained nearly 30 percent against the dollar and the euro since the start of last year, helping to push inflation to 5-year lows and keep it within the Reserve Bank's 3 to 6 percent target. But exports have been depressed, especially those destined to South Africa' largest trading partner, the eurozone as that region's growth has been sluggish.
Partly due to rand gains, the manufacturing sector has shrunk and shed hundreds of thousands of jobs, pushing unemployment to an official figure of 25.3 percent of the working force. The unofficial rate may be as high as 40 percent. The rand is seen maintaining its gains into 2011, weighing on the manufacturing sector and the broader economy. At 5.5 percent, South Africa's rates remain attractive to investors.
President Jacob Zuma appointed Patel to reward the powerful COSATU trades union grouping for helping him clinch the ANC's leadership from Thabo Mbeki. But so far, Patel, a former trade unionist, has not influenced policy and the "new growth path" is his attempt.
COSATU helped Zuma unseat Mbeki, hoping Zuma would be more sympathetic to their leftist stance, but he has maintained those market-friendly policies, which has increased tensions in the ANC alliance.
After the establishment of the National Planning Commission headed by former finance minister Trevor Manuel, analysts say it is unclear who has the power to drive policy in Zuma's cabinet. For now, policy remains the responsibility of Finance Minister Pravin Gordhan, to the chagrin of COSATU.