http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 17.88Change: -0.10
R/$ = 15.88Change: -0.04
Au 1237.82 $/ozChange: 0.47
Pt 955.50 $/ozChange: -4.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
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  
 
 
Mar 05, 2013

World Bank economist urges SA to focus on savings, investment to bolster growth

Back
World Bank chief economist Kaushik Basu on savings, investment, growth and a possible Brics bank. Camera Work & Editing: Darlene Creamer. Recorded: 5.3.2013.
 
 
 
DURBAN|Russian|Africa|BRICS Bank|India|Projects|Africa|Brazil|China|South Africa|Infrastructure|Kaushik Basu|Pravin Gordhan
|Africa|Projects|Africa||Infrastructure|
durban|russian|africa-company|brics-bank|india|projects|africa|brazil|china|south-africa|infrastructure|kaushik-basu|pravin-gordhan
© Reuse this



World Bank chief economist Kaushik Basu, who took up the position in October, urged South Africa on Tuesday to prioritise policies that encouraged higher savings and investment levels, which he argued were key to creating the platform for higher rates of economic growth.

Having worked as chief economic adviser to the government of India immediately prior to the appointment, Basu stressed that, while he was ill-equipped to provide specific policy suggestions, experience from other emerging economies showed that increased savings and investments had stimulated higher growth levels.

“Yes, you will still have short-term slumps in growth, but the growth rate can be pushed up a lot [through higher savings and investment rates].”

Speaking at a function organised by the Wits Business School, he said the experience of India is this area was “stark”.

“India used to be a low-saving country. Then, in two-steps, in the late 1970s and 2001 and 2002, India’s savings rate and investment rate just jumped up. And now, India saves and invests like other East Asian countries and the growth moved almost in step with that,” he said, while acknowledging that India was currently concerned with its recent fall-off in growth rates.

“So, I think South Africa ought to pay a lot of attention in stepping up on this.”

In the 2013 Budget Review, the National Treasury lamented the fact that domestic savings rates remained low, which was resulting in a significant gap between investment and savings.

It also noted that South Africa would need to attract cumulative inflows of global savings of R703-billion over the coming three years to finance the current account deficit, which would require improvements in both investor confidence and the investment climate.

In the longer-term, the National Treasury said structural improvements in the current account would require a significant increase in the domestic savings rate and decreased reliance on foreign savings.

However, Basu praised Finance Minister Pravin Gordhan’s continued focus on growth in the recent Budget, arguing that it was important for emerging economies to continue to emphasise inclusive growth during what was likely to be a period of relatively slow global growth, possibly until 2015.

“For emerging economies, where there’s a lot of poverty . . . there is a moral urgency of a kind that industrialised countries don’t have,” he said, arguing that emerging countries, thus, had to think of ways to sustain even modest growth levels.

Gordhan lowered his growth outlook for 2013 to 2.7%, while forecasting 3.5% and 3.8% for 2014 and 2015 respectively.

BRICS BANK

Basu also argued that the World Bank was unfazed by the prospects of the emergence of a new development bank funded and managed by the Brics bloc, comprising Brazil, Russian, India, China and South Africa.

He said the “lending space” had increase materially since the late 1940s, when that space had been dominated by the World Bank and the International Monetary Fund. There was, therefore, room for a number of multilateral lenders, particularly in supporting infrastructure projects.

But he also stressed that the World Bank was a “changing institution” and that it would be focusing on scaling up its activities in the area of infrastructure development.

“There is an awareness in the World Bank that there is greater need for infrastructural money in emerging economies and we are looking at ways in which we can attend to this.”

It was anticipated that the so-called ‘Brics Bank’ would emerge as a key theme of the fifth annual Brics Summit, which would take place in Durban at the end of March.

Should such a bank emerge the idea would be for it to mobilise domestic savings and cofund infrastructure in developing regions.

Gordhan noted in his recent Budget address that, collectively, Brics countries held reserves totalling $4.5-trillion.

Edited by: Creamer Media Reporter
© Reuse this

To subscribe email subscriptions@creamermedia.co.za or click here
To advertise email advertising@creamermedia.co.za or click here
 
Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Economy News
Former Cosatu general secretary Zwelinzima Vavi
President Jacob Zuma’s State of the Nation Address (Sona) showed a breakdown of trust between government and the population of South Africa, according to former Congress of South Africa Trade Union (Cosatu) general secretary Zwelinzima Vavi “Yesterday’s Sona address...
Atterbury Property Developments director Coenie Bezuidenhout
Atterbury Property Developments is developing a R850-million, 103 000 m2 industrial and business park at the intersection of the N3 highway and Rand Airport road, next to the Elandsfontein interchange. Atterbury designed the park on a site it acquired in Gosforth...
Jacob Zuma
President Jacob Zuma has said a greater investment in the country’s infrastructure would assist it during tough economic times. Zuma was speaking at the post State of the Nation discussion at the The New Age Business brief held outside Cape Town.
More
 
 
Latest News
The Competition Tribunal on Friday gave a conditional go-ahead for mobile operators Cell C, MTN and Vodacom to buy out their respective subscriber bases, as South Africa’s last independent service provider Altech Autopage calls it a day. The Allied Electronics...
The drought in Southern Africa could become one of the worst on record should the current below-normal rainfall continue, the United Nations (UN) World Food Programme said this week. The El Niño conditions presently being experienced in the region had resulted in a...
Kelibone Masiyane has been appointed the new MD of PPC Zimbabwe, succeeding Njombo Lekula, who had recently been redeployed as MD of PPC’s international operations. Masiyane would be supported by new PPC commercial director Iain Sheasby and new PPC GM of finance...
More
 
 
Recent Research Reports
Construction 2016: A review of South Africa's construction industry (PDF Report)
Creamer Media’s Construction 2016 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; key participants; local demand; geographic diversification; corporate activity; black economic...
Energy Roundup – February 2016 (PDF Report)
The February 2016 roundup covers activities across South Africa for December 2015 and January 2016 and includes details of a Government Gazette notice that confirms Cabinet’s decision to move ahead with the 9 600 MW nuclear procurement programme; State-owned power...
Energy Roundup - December 2015 (PDF Report)
The December 2015 roundup includes details of State-owned utility Eskom’s application to claw back R22.8-billion; South Africa’s ranking as an investment destination for renewable energy; and a nuclear expert’s thoughts on reactor designs for South Africa’s nuclear...
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...
 
 
 
 
 
This Week's Magazine
WIDENING FLEXIBILITY The trailers have a 3-m-wide (2-file) and 4.3-m-wide (2-file) configuration
Lifting, transporting, installing and ballasting solutions provider Ale has expanded its global fleet of trailers and invested in the latest range of widening trailers that can be mechanically widened from 3 m to the desired width for any project. Ale ordered 48 axle...
The market for the BMW 7 Series in South Africa differs quite significantly from the rest of the world. China, the US and the Middle East almost exclusively buy the long-wheel-base version, using the German manufacturer’s luxury high-end sedan as a chaffeur-driven...
January new-vehicle sales fell by 6.9%, to 48 615 units, compared with the same month last year. Statistics released by the Department of Trade and Industry show that the domestic new passenger-car market declined by 6.1%, to 34 936 units, compared with 12 months ago.
Information technology (IT) equipment and infrastructure multinational Dell is providing open infrastructure systems for clients so that they can use any systems, including innovative new systems, that suit their business needs, says Dell Europe, Middle East and...
South Africa’s State-owned defence industrial group, Denel, has set up another international partnership, based in Hong Kong. This new subsidiary is Denel Asia and it is a joint venture (JV) with South African private sector company VR Laser.
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
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
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $149 Close
Subscribe Now for $149