Key Points:

  • At an event hosted by the Centre for Development and Enterprise (CDE), Professor Ricardo Hausmann, chairman of the International Panel on the Accelerated and Shared Growth Initiative that advised the South African government between 2004 and 2008, said that low levels of labour participation, contracting export sectors, and stagnant manufacturing, prevent South Africa from ‘raising its economic ‘speed limit’’.
  • In the report summarising Professor Hausmann’s observations and advice, he calls for a number of critical reforms in government’s approach to unemployed young people, black economic empowerment (BEE) and a unified national narrative. He also laments a costly focus on mineral beneficiation, which prevents policy makers from identifying other developmental opportunities.
  • To understand South Africa’s poor economic performance since the end of apartheid, and especially in the last decade, we must focus on key features that set the South African economy apart from many other, more successful countries.
  • The very low levels of labour participation in South Africa are a good place to start. Relatively few people are looking for work, and those who are, find it very difficult to make it into a job.
  • This has to be overcome if the country wants to have any hope of creating opportunities for the poor.
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