Engineering News reports a little while on a World Bank working paper on the South African economy:
“Our assessment is that, while Gear contained all the right elements, its impact has been uneven – macro stability has been achieved without the necessary structural reforms and, therefore, the growth and employment targets have not been met.” By 2000, Gear was meant to have delivered 6% gross domestic product (GDP) growth and 400 000 new jobs. Instead, only 3% growth was recorded for that year, and formal sector jobs continued to decline….
Therefore, the paper argues, much more emphasis needs to be given to issues such as capital investment and savings, trade policy, labour market reform, restructuring of State-owned enterprises, exchange controls and exchange rate policy and land reform. Lewis also emphasises the need to deal with the risks posed by the HIV/Aids pandemic, currently devastating sub-Saharan Africa.
… but Gear is failing us. And do we really need more economic growth, without paying more attention to what kinds of growth we are getting? In recent years, much of our growth has been in the security sector, according to participants at a recent conference on poverty and inequality in South Africa:
Most growth comes from a growing private security sector (which polices the boundaries between the haves and the have nots) and the financial sector, which Neva Makgetla said generates profit but does not create jobs.