Trade and Industry Monitor Volume 37

In his paper, Albert Berry - professor of economics and director of the Latin American programme at the Centre for International Studies of the University of Toronto - identifies the impacts of globalisation and liberalisation on inequality. He finds that data deficiencies and a lack of in-depth analysis of inequality, poverty and their determinants - especially in developing countries - have delayed a better understanding of how these important indicators of social and economic well-being have been changing over time, and how they have been affected by globalisation and liberalisation.

Morne Oosthuizen - deputy director of the Development Policy Research Unit (DPRU) at the University of Cape Town - contributed a paper that first appeared in the Western Cape Treasury's Provincial Economic Review & Outlook 2006.' The research presents a closer analysis of the Western Cape labour market, providing both an historical review and a forward projection or outlook. This sets a credible analytical platform to debate the appropriate interventions for improved Provincial labour market performance.

The Western Cape's Microeconomic Development Strategy (MEDS) has been developed within the context of the National and Provincial Growth and Development Summits of 2003 to inform, integrate and prioritise all of the Provincial Government's interventions in the economy in a manner that aligns and focuses domestic and international resources.

Independent consultant Krista Tuomi prepared the MEDS for the South African film industry, and finds it to be a vital part of the South African economy, especially in the Western Cape, stimulating growth, generating substantial employment, bringing in valuable foreign exchange and acting as a vehicle for technology transfer and skills upgrading.

 A full list of references for the Film Industry MEDS and further information contained in Appendices can be accessed at www.capegateway.co.za

This article by Nimrod Zalk, Chief Director: Strategic Competitiveness Unit of the dti first appeared in the Business Day of 14 March 2006. Zalk emphasises that there are almost no historical examples of countries that have industrialised without active and robust industrial and trade policies. He also points out that the now-developed economies all industrialised behind substantial tariff barriers and various other forms of support for industry and technological development. Therefore, an industrial policy is not an ideological but a pragmatic choice - one which developing countries have to take in order to achieve their own development process, co-ordinating it with other major policies such as macroeconomic, skills and technology policies, and using current instruments and institutions.

Technological capability development across all sectors of the economy is vital for industrial development. The sector studies discussed in this paper indicate that the traditional "heavy" industries have not only developed leading technological capabilities in their fields but also created opportunities for lateral migration into "smart industries" and other markets. The paper shows that for developing economies, technological advancement has less to do with pushing back technological frontiers than with the assimilation and adaptation of technologies.

Ryan Hawthorne, Reena Das Nair and Keith Bowen of Johannesburg Economics presented this paper at the TIPS/DPRU/UNU-WIDER Forum 2005. It finds that there may be reasons other than high commodity prices for the general lacklustre growth in manufacturing output, the decline in manufacturing employment and the increase in employment in the skills-intensive sectors in South Africa. Factors such as capital, labour, trade and output market distortions and a lack of physical and human capital accumulation may be far more important sources of these trends.

TIPS economist Mmatlou Kalaba prepares a quarterly snapshot of South Africa's trade with particular trade blocs around the world.

This paper by Prof. Merle Holden, head of the School of Economics and Management at the University of KwaZulu-Natal Durban and Landon McMillan, an economist at TIPS, supports the view that the EU-SA FTA stimulated both imports and exports, while for SADC, exports were stimulated but the results for imports were ambiguous. The AGOA results were far less significant overall, suggesting that preferential access for South African exports into the US had not been particularly beneficial.

This article by Prof. Ronald I. McKinnon, William D. Eberle Professor of International Economics at Stanford University, was first published in the Economist's Voice, Volume 3 (2006) no. 5. It finds that the recent abandonment of China's "traditional parity" of 8.28 yuan per dollar makes a new credibly fixed exchange rate strategy more difficult - and certainly not possible for some time. It argues that the second-best solution is for China to continue, and possibly strengthen, its foreign exchange restrictions on liquid financial inflows, thus limiting the foreign pressure to drive interest rates down.