Business Day - 6 June 2017 by Neva Makgetla (TIPS Senior Economist)

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South Africa’s motorcycle industry is waning while other emerging markets are expanding their production activity, usage and trade performance, and are developing integrated value chains for motorcycles. South Africa is a net importer of motorcycles and imports have been declining for the past five years. No local manufacturing is taking place and the domestic industry relies solely on imports. The industry is small in global terms with the number of registered motorcycles at around 366 000 units as of 2015, which is less than 1% of the global share and the number of new registrations is on the decline. The number of industry participants is also dwindling as more local dealers, distributors and importers of motorcycles close down operations.

One of the main reasons is a policy change that came into effect in 2013. This introduced more stringent requirements for the importation of motorcycles, which in turn reduced the number of establishments eligible to import motorcycles. The policy change has benefited the main original equipment manufacturers (OEMs) and their authorised agents and suppliers by eliminating competition from parallel importers, which are now forced to source their motorcycle stock domestically from the OEMs and their respective authorised suppliers. This has affected the profit margins of the parallel importers and resulted in many of them closing.

This brief illustrates how, in the debate between trade protectionism versus openness in industrial development, sometimes policy changes in the form of trade restrictions in a specific industry may lead to unintended consequences. These could have an adverse effect on the domestic industry and the overall economy.

Presentations on two recent books

Inclusive Business in Agriculture. What, how and for whom? Critical insights based on South African cases: presentation by Wytske Chamberlain (University of Pretoria)

An Empty Plate: Why we are losing the battle for our food system, why it matters, and how we can win it back: presentation by Tracy Ledger (TIPS Research Associate)

Discussant: Ms Ncumi Mcata-Mhlauli, Chief Director: Agro-processing, Department of Trade and Industry

Background

Inclusive business is hailed as a win-win scenario for the development of poor communities; yet there is little insight into how these inclusive businesses work and, more importantly, for whom. Wytske Chamberlain examines the structures of IBs, the actors involved and aims to answer the question, are they effectively inclusive of smallholder farmers?

An Empty Plate analyses the state of the South African agri-food system. Tracy Ledger demonstrates how this system is perpetuating poverty, threatening land reform, and entrenching inequality with negative outcomes for our social fabric.

Presenters

Wytske Chamberlain is a PhD Candidate in Rural Development, University of Pretoria, where she conducts research on inclusive businesses. She holds an Honours degree in Economic Geography from Utrecht University and a Masters degree in Human Geography from the University of the Witwatersrand. Wytske is also the Coordinator of the Regional Focal Point Africa - Land Matrix Initiative, which monitors large-scale land acquisitions.

Tracy Ledger is a TIPS Research Associate. She is a Development Economist. She has Honours and Masters degrees in Economics and Agricultural Economics from the University of the Witwatersrand and Stellenbosch respectively, and a PhD in Economic Anthropology from the University of the Witwatersrand. Tracy has worked in macroeconomic analysis, development policy analysis and design, and the management of development interventions. She has a particular interest in agri-food systems, small farmer inclusion and food security.

Engineering News - 29 May by Terence Creamer.

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The theme of the TIPS Annual Forum 2017 was Industrialisation and Sustainable Growth - see www.developmentdialogue.co.za. View programme: Annual Forum 2017 Programme. View Photo Gallery. Get copies of the papers and presentations.

Business Day - 23 May 2017 by Neva Makgetla (TIPS Senior Economist)

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RESPONSE TO COLUMN

Letter in Business Day - 25 May 2017: Neighbours not a dump

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Business Day - 9 May 2017 by Neva Makgetla (TIPS Senior Economist)

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RESPONSE TO COLUMN

Import tariffs aren't just set up to unfirly protect commercial farmers

Huffington Post - 10 May 2017 by Tinashe Kapuya and Wandile Sihlobo

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Letter in Business Day - 11 May 2017: Makgetla is wrong about food prices and tariff formulation

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This brief presents three pragmatic industrial policy implementation ideas based on recent heterodox thinking. The examples were identified during the research for a theoretical think piece on current heterodox industrial policy literature. The ideas are presented without the context of supporting theory, but simply as ideas that incumbent industrial policy decision-makers may find interesting.

Download think piece: Current heterodox industrial policy thinking: A muting of aspirations or sound pragmatic suggestions?

IMMP 2017 4-8 SEPTEMBER 2017: CALL FOR APPLICATIONS

Trade & Industrial Policy Strategies (TIPS) is holding the first edition of the Industrial Policy for Policy Makers training programme (IPPM) alongside the annual African Programme on Rethinking Development Economics (APORDE).

The programme is for senior government officials from South Africa and SADC and will be held in Johannesburg (South Africa) from 4th to the 8th of September 2017. There is no charge to attend the training, however, places are limited and applicants will be accepted through an application process. South African delegates will be required to cover their own transport and accommodation costs. Up to 10 delegates from SADC countries will have their travel and accommodtion costs covered by the programme.

The five-day intensive training course is focused on Industrial Policy and consists of lectures and seminars taught by leading international and African economists. It is of particular relevance given the recent adoption of the SADC Industrialisation Strategy and Action Plan. The programme consists of both daytime and evening lectures.

Participants are expected to attend all lectures.  

Overview

IPPM will cover essential topics in development economics with a focus on key aspects of industrial policy. Several lectures will be held jointly with the APORDE programme. The training will include sessions on:

• Critical perspectives on development economics
• Market, state and institutions in economic development
• Governance
• The developmental state and industrial policy
• Development finance and industrial development
• Industrial development in SADC
• Technology acquisition
• Taxation and economic development
• Regional value chains and industrial development

A list of confirmed lecturers includes:

• Chris Cramer (SOAS, University of London)
• Ha-Joon Chang (Cambridge University)
• Mushtaq Khan (SOAS)
• Judith Fessehaie (University of Johannesburg)
• Ben Fine (SOAS)
• Stephanie Blankenburg (UNCTAD)
• Jonathan Di John (SOAS)
• Thandika Mkandawire (London School of Economics)

Applications

Applicants should be senior government officials in SADC countries working in economic ministries / departments and be proficient in English.

The following documents should be sent to Rozale@tips.org.za:

• The completed application form
• A recent curriculum vitae not exceeding 5 pages in length
• A letter from your employer confirming your availability to attend for the full duration of the training
• A motivation letter  (Maximum 500 words)

The application form is attached.

Applications close on Friday 21 July 2017 at 8 o’clock in the morning, Johannesburg time. Incomplete or late applications will not be considered.

Candidates will be notified by e-mail of the outcome of their applications at the latest by the end of July 2017.

Should you have any queries, please contact: Rozale@tips.org.za  

Presentations

Practical Ideas in Heterodox Industrial Policy Thinking: Sandy Lowitt (TIPS Research Fellow)
South Africa's Industrial Policy - by the Numbers: Neva Makgetla (TIPS Senior Economist)

Discussant: Garth Strachan (DDG: Industrial Development Division, Department of Trade and Industry)

Background

Industrial Policy in the 21st century has fundamentally changed in nature. (Largely) gone is the achingly abstract discussion of the motivations behind industrial policy and whether it is a good idea or not. In its place is a recognition that industrial policy is undertaken everywhere in the world, even if it is not openly called industrial policy. It is now widely accepted that industrial policy is a response to market failure just as education policy or health policy are responses to such failures. This normalisation of industrial policy has allowed economists to stop focusing on defending and justifying the pursuit of industrial policy (especially in lagging economies). Instead they can now focus on extant, fine-grained, real world problems facing incumbent policymakers operating in difficult situations. Through this lens, problems with industrial policy design and implementation are viewed - not as insurmountable - but merely the normal course of business which any sensible policy framework must address.

The presentation by Sandy Lowitt will cover her recent Paper on Industrial Policy and she will present three pragmatic industrial policy implementation ideas based on recent heterodox thinking, which is the subject of her recent Policy Brief.

The presentation by Dr Makgetla will look at the overall patterns of industrial development since 1994 and cover key sectors in the economy that have been targeted for industrial policy. Given the shifts in the context of manufacturing since the transition to democracy, a review of key trends in the sector over the past two decades should yield important insights for policy in the coming period. Key questions include the evolution of the structure of production and investment within manufacturing; the impact of the commodity boom and exchange-rate fluctuations on manufacturing profitability and production; and the shifts in ownership and control since 1994.

Presenters

Sandy Lowitt is a TIPS Research Associate. She holds a Master of Commerce from Wits University in Economics. She established the Economics Department in the Gauteng Provincial Government in 1995 and remained at with GPG until 2006. While specialising in economic research and industrial policy and strategy she also created and ran Blue IQ, which delivered projects such as the Gautrain, the Innovation hub and the automotive supplier park. Since leaving the government, Sandy has remained active in public policy research and strategy development.

Neva Makgetla is a senior economist at TIPS. Makgetla has published widely on the South African economy and worked for many years in government, most recently as Deputy Director General for Policy in the Economics Development Department, as well as in COSATU.