The Congress of SA Trade Unions (Cosatu) wants a complete overhaul of the South African economy, its general secretary Zwelinzima Vavi said on Wednesday.

There was a need to move away from capital intensive sectors of the economy and focus on more labour intensive sectors, he said after a meeting of Cosatu's central executive committee (CEC).

Vavi bemoaned this year's massive job losses and the high rate of unemployment.

"Massive net job losses"

"We are going to see massive net job losses in 2009... we estimate that more will be lost between now and December to make the number way above a million," he said.

He said the 959 000 jobs lost in the past nine months would not be cancelled by the 0.9 percent growth rate, announced by Statistics SA.

"... That's why we are not even smiling at the 0.9 percent GDP [Growth Domestic Product] growth."

Cosatu wants a new growth-path linked more to industrial growth, and a more expansionary fiscal and monitory policy.

It has welcomed the willingness of newly-installed South African Reserve Bank Governor Gill Marcus' to engage on inflation targeting.

"We think that the policy has been a disaster for South Africa's development challenges," said Vavi.

Rein in the exchange rate

He blamed inflation targeting for the high interest rate and the high exchange rate.

The country's exchange rate also needed to be looked at, he said.

"Our currency is far... stronger than our economy demands," he said.

A rate of R10 to the Unites States dollar would "give the manufacturing sector a breath of fresh air ".

Cosatu would develop a framework document to outline how the economy would need to change.

It would detail a policy position on exchange rate management, interest rate policy and inflation control.

"The CEC welcomed the undertaking by Finance Minister Pravin Gordhan and ... Marcus to open the discussion on micro economic policy," Vavi said.