R/€ = 15.26Change: -0.01
R/$ = 14.41Change: -0.03
Au 1057.95 $/ozChange: 0.07
Pt 835.50 $/ozChange: 0.00
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?

And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters About Us
RSS Feed
Article   Comments   Other News   Research   Magazine  
Jan 21, 2011

Govts must carefully manage global integration in today’s uncertain world

© Reuse this

We enter 2011 with much global economic uncertainty. South Africans should consider the country’s economic policies and activities within the context of an uncertain and volatile global economy.

Since the 1980s, advocates of economic globalisation have been gung-ho and the major economic powers and international financial institutions have pushed, cajoled and even forced developing countries into liberalising global trade and finance.

The more open global trade and finan- cial systems provided opportunities and threats to individual countries. Unfortunately, the global and domestic cheerleaders for openness focused on the advantages. The financial and economic crises of the last three decades reminded us of the threats. Many developing countries have chosen to be more careful about how they are integrated into the global economy, not only because of the risk of financial and economic crises but also to support economic development policies. Their States actively manage their global economic relations, particularly global financial transactions. South Africa has neglected this aspect of economic policy and, as a result, has had less success in achieving the country’s economic development goals.

The main goals of South African economic policy are reductions in poverty, inequality and unemployment. The main means for achieving these goal would be the promotion of investment, employment and economic growth through building infrastructure and supporting industrial development. Improvements in education and training are necessary to achieve these goals.

The overall approach to economic policy since the attainment of democracy in South Africa in 1994 has been to assume that improved infrastructure and broad micro- economic measures to support business would lead to economic growth and employment. It was assumed that trade liberalisa- tion and promoting foreign direct investment into South Africa would lead to economic growth and employment. Policymakers thought that all we required were macro- economic policies that were ‘credible’ to foreign investors and international financial institutions.

There is now broad agreement in government that this approach to economic policy has not supported investment and employment creation but has actually increased inequality. South Africa has not had a major progressive economic transformation. There have been declines in mining and manufacturing and associated productive services sectors and growth in financial services.

Failure to achieve adequate employment and poverty reduction has meant that government has had to spend more on transfers to the elderly and children. Our increased integration into global trade and financial markets has increased uncertainty in the economy and made it more sensitive to booms and crashes elsewhere.

At the same time, increased speculative foreign short-term financial flows into South Africa have caused volatility and uncer- tainty in our economy. Our domestic indus- tries and employment have suf- fered because of a widespread shift to export orientation in other developing economies, which has kept the prices of imports low – often artificially low. Policymakers agree that we need a new economic growth path.

The global financial and economic crisis has made it clear that totally free global trade and financial markets are not desirable. There should be global coor- dination and regulation of trade and financial markets. The experience with the World Trade Organisation teaches us that it is hard to develop a global system that will be acceptable to all countries and that the system usually benefits the powerful economies at the expense of the developing economies.

We cannot expect a quick resolution to coordination and regulation of the global financial system. South Africa has to take the lead from other developing countries, particularly our Bric (Brazil, India, Russia and China) partners, on how best to achieve economic development goals and put in place policies, regulations and controls to manage integration into the global economy in a manner that best supports the achievement of these goals. We have to take advantage of global trade and finance opportunities but we also have to protect our economy from the risks to our economic development emanating from the global economy.

Edited by: Martin Zhuwakinyu
Creamer Media Senior Deputy Editor
© Reuse this Comment Guidelines (150 word limit)
Other Seeraj Mohamed News
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 a launch of the Department of Trade and Industry’s (DTI's) capacity building...
Article contains comments
We have had much discussion about the exchange rate over the past few years. This discussion has had trade unions and certain manufacturers on one side and representatives of financial institutions on the other side.
Article contains comments
Latest News
French conglomerate Bollore may have to halt work on the Niger to Benin section of its giant West Africa rail project after a rival company won a court order to stop it going ahead. The dispute concerns rival rail schemes in the area.
A week ahead of the second annual gathering of the Forum on China–Africa Cooperation (Focac), in Johannesburg, the JSE is rolling out the proverbial red carpet for Chinese investors looking to Africa’s largest bourse for possible investment opportunities, calling...
The South African National Roads Agency Limited (Sanral) applied for leave to appeal on Friday against the Western Cape High Court judgment that set aside the approvals that would enable it to toll sections of the N1 and N2 freeways in Cape Town. This prompted the...
Recent Research Reports
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
This Week's Magazine
The BMW Group will invest R6-billion at BMW Group South Africa’s (BMW SA’s) Rosslyn plant to produce the next-generation X3 sports-activity vehicle (SAV) for the local and export markets. Rosslyn will continue production of the current 3 Series through its lifecycle,...
The lack of consequences for poor performance and transgressions on the part of contractors remains a significant hurdle to tackling South Africa’s service delivery challenges, delegates heard at the Consulting Engineers South Africa Infrastructure Indaba, on...
City of Ekurhuleni executive mayor Mondli Gungubele earlier this month officially named the city’s bus rapid transit (BRT) system, Harambee.
NICK CHRISTODOULOU As about 58% of data stored by organisations is dark, they must identify this dark data to expose risks and valuable information
About 58% of unstructured data stored by companies is dark data, which means that the value or regulatory importance of the data has not been determined. Subsequently, most of the stored data add costs, rather than increasing revenue or reduce regulatory risks, says...
BRIAN VERWEY Effective management, review and administration of non-core elements can improve business operations and increase revenue and decrease unforeseen risks
Effective logistics, import/export and manufacturing consulting services require detailed industry knowledge and experience, but can add significant value to these industries by providing expert advice on various technical elements in their value chains, says...
Alert Close
Embed Code Close
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96