Economist says South Africa needs more competition in economy

Special Report:Global Financial Crisis

JOHANNESBURG, Jan. 15 (Xinhua) -- More competition is needed in South Africa's economy, chief economist at Investment Solutions Chris Hart said on Thursday.

He was addressing the Democratic Alliance's economic summit held in Johannesburg.

"In the apartheid years we had the same problem -- the economy was over concentrated and there was not enough competition to fight unemployment and inflation," Hart said.

He added that the country should not be in a position where a single entity such as Eskom held it to ransom.

"This is why we need a number of electricity producers," Hart said.

He added that South Africa's protected monopolies have led to problems such as the recent complaint of bread price fixing.

Hart suggested that the government should be involved in regulation and not business.

"You're not allowed to compete with the post office. The government won't allow competition when it comes to its own business," Hart said.

"And with our telephone network, only three players can compete, and that doesn't make sense when you have an unemployment rate of 23 percent." he added.

Democratic Alliance's (DA) leader Helen Zille opened the economic summit.

According to Zille, the party's major concern during the present economic crisis is job loss.

"In the third quarter of last year, 74,000 jobs were lost in South Africa, and every wage earner provides for up to ten dependants - so this is very significant," Zille said.

The DA leader noted that some trade union analysts have predicted that 310, 000 jobs will be lost in 2009.