Despite the global economic crisis, the rate and quality of South Africa’s growth has not been satisfactory. In the last quarter of 2008, the South African economy shrank by 1.8%.
The first thing you see when you look at the South African economy is huge unemployment and very low rates of labour market participation.
Jobs need to come first. To create jobs for millions of unskilled and inexperienced young people, South Africa should set up Special Economic Zones with excellent infrastructure and minimal regulations to attract new foreign and local investment.
South Africa has major problems in the labour markets: it is very expensive to travel to work; people do not have relevant skills; and they lack information about where to find jobs.
The state monopolies in electricity, transport and telecommunications to competition need to be exposed. Currently the state monopolies create serious bottlenecks, raise costs and reduce employment throughout the economy. Barriers to entry to these industries should be removed and state monopolies should be exposed to competition and contestation.