Feb 10, 2012
Government planning, infrastructure key growth drivers - LeipzigerBack
© Reuse this
Speaking at the Centre for Development and Enterprise, in Johannesburg, Danny Leipziger, a former World Bank VP and currently international business professor at George Washington University, said that the Great Recession of 2008 and 2009 had served to reinforce the indispensible role that governments played in coordinating economic growth and development, as well as in guaranteeing stability.
Leipziger was the vice-chairperson of the 22-member Commission on Growth and Development, which was initiated in 2006 under the leadership of Nobel Laureate Michael Spence to study which policies and strategies had supported rapid and sustained economic growth and poverty reduction across the world. He is currently the MD of the Growth Dialogue, which seeks to connect policymakers and thought leaders to advance the economic-growth cause internationally.
In the commission’s work, which preceded the prevailing economic crisis, it was discovered that only 13 countries, mostly from Asia, had been able to sustain yearly growth rates of more than 7% for 25 years.
Five factors – including market openess, good macroeconomic management, a future orientation, a market orientation and strong government leadership and planning – were identified as having been common across all those countries.
Even ahead of the crisis the commission found that the governments in fast-growing countries had been central to crafting and driving the economic vision and in developing the economic and social infrastructure required to support rapid rates of growth.
“I believe that government’s role is even more indispensible than in the past . . . but it’s not the size of government that matters, but the effectiveness,” he said, noting that governments were currently not only being called upon to act as regulators, but also as risk mitigators.
It would take a combination of factors in the current hostile environment to ensure that a country was placed on a competitive footing. But the deployment, ahead of demand, of well-planned and implemented infrastructure could be an important growth “trigger”.
“I’m a big fan of infrastructure investment, because there is no country in East Asia that has grown rapidly that did not invest highly in infrastructure.”
But infrastructure was but one element, with another key factor being the development of a country’s human capital, as well as putting in place structures and policies to support the development of a domestic manufacturing sector.
Leipziger said that once South Africa had selected, through its national development plan or industrial policy, the areas in which it would compete it should immediately begin benchmarking itself against the international ‘best in class’ in those sectors and not simply against competitors in the neighbourhood.
“For South Africa, there are some major challenges that need to be tackled and it would be a mistake to try and tackle them piecemeal – you have to do a lot of things at the same time to create competitiveness and growth.”
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Other Video News
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
This Week's Magazine
Today’s organisations execute projects within increasingly complex environments – particularly in the engineering sector. The ability to successfully execute these projects is what drives the realisation of successful projects and, ultimately, the achievement of...
South Africa’s distribution grid is a twentieth-century relic, which must be changed to serve the country’s modern electricity needs, says South African National Energy Development Institute (Sanedi) Smart Grid Programme manager Dr Minnesh Bipath. “What we are...
There is a disparity in government funding provided to integrated transport networks – bus rapid transit (BRT) networks ¬¬– and that given to conventional bus services, says Putco executive director Thys Heyns. “We have neglected and strangled conventional bus...
The Johannesburg Social Housing Company (Joshco) is building 502 rental housing units, valued at R200-million, in Dobsonville, Soweto, which are scheduled for completion in June 2016.
Automotive component manufacturer and distributor Metair is centralising its research and development (R&D) work in Turkey, in an attempt to bolster the company’s ability to produce affordable start/stop batteries. The new R&D centre is part of an expansion plan in...