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Feb 25, 2011

DTI is building capacity for industrial development

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Africa|Industrial|Africa|Germany|Japan|South Africa|South Korea|London University|Media Reports|Print Media|Ben Fine|Rob Davies|Wits
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The Corporate Strategy and Industrial Development Research Programme (CSID) – the University of the Witwatersrand’s (Wits’) economics policy research unit of which I am director – hosted the launch of the Department of Trade and Industry’s (DTI’s) capacity building programme at the university in early February.

The launch was the culmination of hard work by the DTI and Wits to tailor postgraduate programmes that would help the DTI in building the correct capacity for researching and implementing its industrial policies.

The launch received space in the print media and air time on radio and television because the Minister of Trade and Industry, Rob Davies, gave the keynote address. Two newspapers took excerpts from the speeches by Davies and our guest speaker, Professor Ben Fine, of London University, to come up with headlines that said that South Africa did not have skills to implement policy and that South African economists were not competent. Some of the media reports missed the point and the importance of the new capacity building programme.

The launch was important because Davies not only acknowledged the capacity challenges faced by the DTI in implementing its industrial policies but also showed South Africans that he and the department were working with Wits to do something about the situation. Further, Davies said that he wanted to work with other South African universities to tackle the economic policy research skills shortages faced by government. The DTI’s capacity building programme at Wits is focused on training existing staff at the department and increasing the pool of appropriately skilled postgraduates available for recruitment by the DTI and other government departments.

There is a certificate programme in economic and development policy taught in the Graduate School of Public and Development Management, and some of the courses in the certificate programme will be taught by the CSID. There is a new honours degree in development policy and theory starting this year and a new master’s degree in development policy and theory starting next year. The programme includes workshops from 2012 for ongoing training for alumni of the programme and a regular seminar series called Economic Policy Dialogues, which will have internationally acclaimed development economists speaking on the latest developments in the field.

All government departments have difficulties getting enough of the correct staff. One of the problems identified by the DTI is that most South African universities do not have the required economics training required by people who will work on economic and industrial policy research and implementation. Fine made the point at the launch earlier this month that this shortcoming is not confined to South Africa but that there is a problem in the way economics is taught in most universities around the world. Mainstream economics courses usually follow neoclassical economic theory fairly closely and are suspicious of State involvement in the economy. They believe that markets left to themselves will correct any perceived market failures. Neoclassical eco- nomists that do see a role for the State say the State should play a small role aimed at improving the workings of the market.

Nonmainstream economists assign a more important role for the State in the economy. South Africa has to draw on academic learning and country experiences where the State has played a significant and successful role in transforming economies. We can learn from countries such as Germany, Japan, South Korea and others how the State actively worked with the private sector to build a successful industrial base and international competitiveness.

These countries did not have the State trying to improve the operation of markets, but had States that actively transform the industrial structure and how markets operate. To deal with our economic devel- opment challenges, including our huge unemployment problems, the South African State will have to work to drive South Africa onto a new economic growth path through the transformation of our industrial landscape. For government departments such as the DTI to be actively involved in devel- oping economic policies to drive this transformation, they require well-trained economists that not only understand that the State should play a big role in the economy, but can also develop and implement those policies.

Edited by: Martin Zhuwakinyu
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