The latest TIPS newsletter reports on some of our recent projects, including the latest editions of the REB State of Small Business and Provincial Review, the Black Intustrialists Case Studies, the Annual Forum and APORDE, with links to recent research and policy briefs. Read more here.

Independent Media - 15 April 2017 by Neva Makgetla (TIPS Senior Economist)

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Medical Brief  - 7 September 2016

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Business Day - 11 April 2017 by Neva Makgetla (TIPS Senior Economist)

Read online at Business Day. 

Or read here as a PDF.

Business Day - 28 March 2017 by Neva Makgetla (TIPS Senior Economist)

Read online at Business Day.

Or read here as a PDF.

The paper considers new heterodox theoretical contributions to the industrial policy debate in developing countries. Specifically it focuses on the challenge of “getting industrial policy right in circumstances where the country is run by flawed leaders presiding over a politically weak and internally fragmented state” (Change 2010). The paper covers new theoretical thinking on:1) institutions, their quality,  how they came to be and the direction of the causality between institutional improvement and economic growth and wealth creation; 2) business state relations and the need to ensure that IP instruments are compatible with existing political power balances; and 3)the capacity and capability of the bureaucracy and the role it plays in ensuring that the state can be embedded with business but not captured by its interests. The paper concludes with some case study examples of interesting IP initiatives, which demonstrate some of this new IP thinking. Examples include the implementation of second best institutions; a process approach to IP in which industry and government make joint discoveries of areas of global competitiveness; thinking about IP at a specific product level;  and  the islands of excellence work around solutions in cases in which a bureaucracy is constrained.

See Policy Brief: Three new practical ideas in heterodox industrial policy thinking

Presentation and Panel Discussion

Rod Crompton and Judith Fessehaie (CCRED)
Simon Roberts (CCRED)
Neva Makgetla and Asanda Fotoyi

Discussant: Edwin Ritchkin

Background 

The presentation by Rod Crompton will discuss the impact of public procurement policy on Transnet's procurement of 1064 railway locomotives as an instrument to develop local rail rolling stock manufacturing capacity in South Africa. The research forms part of a broader research programme under the Industrial Development Research Programme (IDRP) of the Department of Trade and Industry.

Neva Makgetla and Asanda Fotoyi will present findings on the factors that tend to exclude small business from government procurement.

Presenters 

Rod Crompton: Dr Rod Crompton is an independent consultant specialising in industrial policy, energy and economic regulation and a part-time research associate at TIPS. He has a PhD in industrial policy from the University of Natal. He was previously a full-time board member of the National Energy Regulator (Nersa) for 11 years and was senior manager at the Department of Minerals and Energy responsible for energy, hydrocarbons and energy planning for nine years. He has also worked at the Department of Trade and Industry and was managing director of the Minerals and Energy Policy Centre.

Simon Roberts: Professor Simon Roberts is the Director of the Centre of Competition, Regulation and Economic Development (CCRED). He is a professor at the University of Johannesburg, in the Economics and Econometrics Department. He held the position of Chief Economist and Manager of the Policy & Research Division at the Competition Commission from November 2006 to December 2012. Prior to joining the Competition Commission he was Associate Professor of Economics at the University of the Witwatersrand, where he established and directed the Corporate Strategy and Industrial Development research programme examining firm decision-making and economic outcomes.

Neva Makgetla and Asanda Fotoyi are economists 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. Asanda Fotoyi worked at Statistics South Africa before joining TIPS in 2016.

This policy brief provides an overview of South Africa’s Department of Trade and Industry’s industrial park revitalisation programme (IPRP). It then highlights some key success factors for implementing successful spatially-targeted industrial development interventions such as industrial parks. Although infrastructure provision is a crucial (and necessary) investment facilitator, other key factors are essential to ensure that such industrial parks fulfil the employment and firm expansion requirements for inclusive growth. These include ensuring that the right implementation partners are selected, ensuring that local and national government play their roles in investment facilitation, and identifying (and supporting) sector-focused growth opportunities.

Business Day - 14 March 2017 by Neva Makgetla (TIPS Senior Economist)

Read online at Business Day 

Or read here as a PDF.

Main Bulletin: The Real Economy Bulletin - Fourth Quarter 2016

In this edition:

Quarterly GDP growth: South Africa’s GDP fell by 0.08% over the past quarter, driven mostly by a decline in the real economy, above all mining. Mining contracted by 3,0%, manufacturing by 0,8%, and agriculture by 0,1%. These trends contributed to the continued slowdown in growth, which came to just 0,3% for 2016 as a whole. Read more.

Employment: Employment showed the typical seasonal bump from the third to the fourth quarter, growing 250 000 overall. Year-on-year figures, which compensate for seasonal fluctuations, show more modest growth, at 50 000. That indicates that employment growth is slowing with the GDP, although it has levelled out in mining after substantial declines. Manufacturing employment has remained virtually unchanged since 2013, although the rest of the economy has seen significant jobs growth. Read more.

Trade: The strengthening of the rand over 2016 reduced export revenues and made imports more competitive with local producers. As a result, despite growing manufactured exports in dollar terms, in rand revenues exports dropped. Still, overall South Africa ended the year with a surplus on the balance of payments, after running trade deficits from the end of the commodity boom through 2012. Read more.

Investment and profitability: Manufacturing saw a sharp rise in reported profits in the year to the third quarter 2016, but it largely results from a once-off restructuring in beverages. In contrast, the return to profitability in mining appears to represent a turnaround from the end of the commodity boom. Nonetheless, the first three quarters of 2016 saw falling investment in both the public and private sector. Read more.

Major new projects: This section summarises major new FDI projects, drawing on a new TIPS database, as well as domestic initiatives in the real economy. Read more.

Briefing note - Scenarios for US protection: The election of the first explicitly protectionist American president in decades has injected a deep sense of uncertainty into a global trading system already mired by paralysis in the World Trade Organization (WTO) and fractures in the EU. Read the briefing note online: Scenarios for US protection.

Briefing note - The 2017/8 budget and industrialisation: The 2017/8 budget, announced in March, reflects the commitment to fiscal consolidation, which in turn seems likely to slow overall growth. In this context, it imposes real cuts on the budget of the Department of Trade and Industry (the dti) in the coming three years, especially on incentive programmes. Read the briefing note online: The 2017/8 budget and industrialisation.