South Africa's post-apartheid economy has been characterised by low growth and investment, and a rise in unemployment (at 30%, higher than any other middle income country). Government economic policy has stressed the encouragement of investment through deregulation, privatisation and fiscal restraint. However, the failure of this strategy to promote growth and create jobs points to the need for a more interventionist strategy, one in which government must do more to stimulate equitable growth. This proposition is highly contested. Nonetheless, in response to the crisis within the economy, the government has adopted limited reforms involving increased spending on basic social services and housing, greater emphasis on job creation and equity, a renewed stress on planning and coordination and greater support for cooperatives. Yet these new initiatives do not constitute a systematic plan for transforming the economy and more integrated policies are required to overcome dualism and stimulate job-creating growth.
My thanks to Tanya van Meelis for comments.
Southern African countries-mainly Zambia and the Democratic Republic of the Congo-account for around a seventh of global production of copper. In the 2010s, they imported over a third of the associated capital goods and components from South Africa. Given this strength, some observers suggest that the South African capital goods industry could do more to support copper fabrication in the region. Theoretically, investing in production of semimanufactures (principally wire, cable, and tubing) would promote industrialization and enhance value-add. In practice, however, unit prices have only been slightly higher for semis than for refined copper, limiting scope for fabrication-especially as local manufacturers obtain copper essentially at international prices. In any case, the South African capital goods industry is centred on mining, not metalworking machinery. It can only compete with overseas suppliers if it obtains increased financial support for exports and for research and development.
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