Book Launch: What real economic transformation looks like?
Date: Sep 23, 2021 | Department of Accountancy, News
On Tuesday, September 21, the University of Johannesburg’s (UJ) Centre for Competition, Regulation and Economic Development (CCRED) hosted the launch for the book Structural Transformation in South Africa: The Challenges of Inclusive Industrial Development in a Middle-Income Country.
The launch was in association with the Department of Trade, Industry and Competition (the dtic) and The South African Research Chairs Initiative (SARChI) and included a panel discussion between the editors and contributors of the book, which took place via a YouTube livestream.
The book, which offers detailed evidence, analysis and recommendations for South Africa and other countries to escape the middle income trap and onto a path of sustained growth, is edited by Antonio Andreoni, Pamela Mondliwa, Simon Roberts and Fiona Tregenna.
South Africa’s Minister of Finance Enoch Godongwana gave the keynote address saying that the government valued high quality research that helped them respond to pressing challenges of poverty, unemployment and inequality.
He said the current state of South Africa’s economy was unsustainable adding that South Africans were becoming poorer since 2015 and that productivity growth was slowing further. The unemployment rate has increased to a record high of 34.4%.
“Part of our policy response requires that we place emphasis on fundamentally transforming the structure of our economy to move from low growth, low labour absorbing sectors to sectors of high growth, high productivity and greater labour absorption. Our focus must also be on how we upgrade to higher value added activities within sectors. If we can do this we stand a greater chance of catapulting our economy onto a path of inclusive growth, sustainability and global competitiveness. ”
He indicated that one of the highlights of the book was that it put industrial policy and the quest for industrialisation back at the centre of the development agenda.
Minister Godongwana said the body of work being launched would strengthen the response to the challenges faced in the quest for greater and inclusive industrial development.
The panel consisted of UJ Professor of Economics and National Research Foundation (NRF) South Africa Chair for Industrial Development in South Africa; Fiona Tregenna, Richard Kozul-Wright; Director of Globalization and Development Strategies Division of the United Nations Conference on Trade and Development (UNCTAD) and Trudi Makhaya; the economic advisor to President Cyril Ramaphosa.
Prof Tregenna, one of the book editors, said the book sought to set out an agenda for what the editors termed ‘the real transformation of the economy’ which was aimed toward sustainable prosperity, increased economic participation and overall social and economic resilience.
“Structural transformation refers to changing the composition of the economy towards activities that have superior scope for sustained productivity growth. Internationally, the new global drivers of change, in particular, digital industrialisation, global value chain consolidation and sustainability management not only present risks but have opened windows of opportunities for structural transformation across middle income countries.
Leveraging these opportunities requires new ways of thinking, building of supportive coalitions and agile policy making. We hope the analysis in the book contributes to an evidence base for this.”
She added that political economy issues can be found in various chapters of the book including those of power inequality, BEE and barriers to entry, and political settlements and industrial policy.
The themes explored in the 15 chapters of the 400 page volume include learning and strengthening of productive capabilities, issues around technical and technological change, digitalization and sustainability, global value change and associated power dynamics.
Ms Makhanya said the key lesson out of the book was that there wasn’t a specific recipe to follow when it comes to transformation. She also reflected on localisation, which has been an important theme for the economic reconstruction and recovery plan.
“It has to be specific to the realities of that country. Some of the challenges we face in terms of market power and a very exclusionary economy, we have begun to deal with those but we still have some way to go.”
Mr Kozul-Wright added that the book was good at focusing on, not only the internal pressures that need to be overcome in middle income countries but also the wider context that can only be defeated if developing countries get together and force through changes collectively rather than hoping market forces will get them through it.
A conference will be held in October to discuss the book further.
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