Not only is South Africa in an economic rut, but high levels of corruption, patronage and state capture also means it suffers from severe institutional rot. This rot distracts attention from policy debates, while the accompanying political and administrative mismanagement creates policy uncertainty. Policy uncertainty and economic underperformance, in turn, lead to low investment. The result is low economic growth and high unemployment.
The first democratic government in 1994 inherited an underperforming economy with a broken labour system. Apartheid's labour system comprised a labour market that up to the mid-1980s suffered from the stifling effects of job reservation. It also comprised the Bantu education system and the Bantustan, and influx control system.
Within the first three years, the first democratic government introduced new labour legislation that modernised the South African labour market and protected worker rights. Democracy also meant that the Bantustan governments were abolished (although traditional chiefs were left in place) and the fragmented, race-based education departments were merged into a non-racial education system. But these reforms did not bring work and prosperity.
In his new book, Professor Philippe Burger explains why this did not happen. Central to this explanation is policy failure and patronage. He also sets out to explain the key problems inhibiting economic growth, job creation and a reduction of inequality and poverty, and discusses the actions that should constitute the government's policy agenda. These actions are intended to introduce the necessary structural and policy changes needed to put South Africa on the road towards prosperity and higher levels of employment.
Suffice it to say that South Africa needs a drastic change of direction if the country is to have a higher, more inclusive level of economic activity and a better livelihood for all.
Prof Burger will be joined by other leading economists for this discussion.
Author: Philippe Burger
Philippe Burger is professor of Economics and head of Department at the University of the Free State. He was a 2016/17 Fulbright Exchange Scholar at the Center for Sustainable Development, Earth Institute, at Columbia University (New York). From September, 2012 to October, 2014 he was president of the Economic Society of South Africa. He is also a member of the South African Statistics Council, which overseas the work of Statistics South Africa. His publications include three books and numerous academic articles on fiscal rules and fiscal sustainability, public private partnerships and macroeconomic and economic development policy. Together with IMF staff he also co-authored two IMF working papers. In 2009, the IMF also invited him to spend a month at the IMF as a visiting scholar. In 2007, 2010 and 2012, he was seconded to the OECD in Paris to work on public private partnerships and capital budgeting, while in October, 2011 he joined an OECD mission to Indonesia to conduct a regulatory review of Indonesia. He was a member of the Panel of Experts of the South African National Treasury, in which capacity he recently co-authored a 20 year review of South African fiscal policy since 1994.
Prof Adrian Saville, Chief Executive Cannon Asset Managers Professor, Gordon Institute of Business Science
Dr Tashmia Ismail-Saville, CEO of YES (Youth Employment Service)
Gugu Mtetwa CA(SA), Director of Companies
Zukiswa Mthimunye, GIBS Faculty
A light supper will be served after the event.
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