TIPS Development Dialogue on behalf of Partnership for Action on Green Economy 

DESIGNING POLICY FRAMEWORKS FOR A CLIMATE-COMPATIBLE INDUSTRIAL DEVELOPMENT TRANSITION IN SOUTH AFRICA

The South African Government is progressively introducing the policy changes aimed at supporting the transition to a sustainable development pathway. These processes aim to manage a balancing act and a highly contested and fluid operating environment. This reinforces the need for robust and evidence-based planning and policymaking. Furthermore, the multi-layered and multi-faceted nature of the policymaking exercise, fraught with unknowns, uncertainties, incomplete information and external variables calls for an incremental, iterative and flexible approach. This session presents the state of play in South Africa, introducing a policy pyramid perspective, and proposes a practical way forward to design a climate-compatible industrial development pathway in South Africa.

PRESENTER: Gaylor Montmasson-Clair, TIPS

Gaylor Montmasson-Clair is a Senior Economist at TIPS, leading the institution’s work on Sustainable Growth. He holds a Master’s degree in International Affairs from the Institut d’Etudes Politiques (Sciences Po) of Grenoble, France as well as a Master’s degree in Energy and Environment Economics from the Grenoble Faculty of Economics, France.

DEVELOPING GREEN TRADE AND INDUSTRY IN SOUTH AFRICA

The transition to a green economy is seen as an important tool to respond to the multiple developmental challenges in South Africa. In this context, the nexus of green industry and trade, and the identification and assessment of sectors that offer particular opportunities for green industrial development and trade, are core to this transition. This session presents preliminary findings on the identification of challenges and opportunities for advancing green industries and related trade opportunities in South Africa. The presentation will be followed by a facilitated discussion to further identify and assess economic sectors that offer particular trade opportunities (import substitution and/or export potential) from the perspective of green industrial development.

PRESENTERS: Christopher Wood and Shakespear Mudombi, TIPS

Christopher Wood is an Economist at TIPS, focusing on trade and industry policy. He holds a Master’s degree in Development Studies from the University of the Witwatersrand.  

Shakespear Mudombi is an Economist at TIPS, focusing on sustainable growth issues. He holds a PhD in Environmental Management from the University of South Africa and a Master’s degree in Agricultural & Applied Economics from the University of Zimbabwe (with electives done at University of Pretoria).

Member countries of the Southern Africa Development Community (SADC) engaged in a number of bilateral trade liberalisation agreements and initiatives from as way back as the 1950s, the main objective being to increase bilateral trade flows through deeper opening and access of regional markets. Southern African countries saw these ‘country to country' trade agreements coupled with the adoption, by the SADC region, of a ‘Protocol on Trade' (TP) in 1996, and its implementation from 2000, was viewed as a coherent trade policy strategy to promote regional economic growth and help reduce poverty. Bilateral trade flows have been analysed on sensitive products textiles and apparel, cereals and vehicles between SADC countries that have signed bilateral trade agreements between themselves and implemented the SADC TP which led to the adoption of a SADC Free Trade Area in 2008. Analysis focused on sensitive products because preferential bilateral trade agreements seem to be more generous (offer better concessions) on these products as compared to commitments member states undertook at the wider regional level under the SADC TP. Trade creation on wheat and sugar products dominates trade diversion even though the percentage increase in trade in these products is small. Moreover, there is no conclusive evidence that bilateral trade agreements increased bilateral trade flows beyond the market access opportunities provided by the SADC TP except only for textile products from Malawi into South Africa. SADC countries need to do more to implement commitments in their bilateral trade agreements to realise the real market access benefits of trade liberalisation. 

Business Day - 25 October 2016 by Neva Makgetla

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TIPS in partnership with the South African Research Chair in Industrial Development, based at the University of Johannesburg, and in association with the Green Economy Coalition (GEC), hosting the 2017 Annual Forum from 13 to14 June, 2017. Supported by the European Union and the Department of Trade and Industry.

The theme of the Forum was Industrialisation and Sustainable Growth.

Download a copy of the summary report of the Forum: TIPS Forum 2017 Industrialisation and Sustainable Growth - Summary Report. 

Call for papers

Those wishing to contribute papers are invited to submit their title and abstracts of up to 500 words to Baba-Tamana Gqubule at TIPS via email to: dialogue@tips.org.za.

To be considered, abstracts should be submitted by 3 February 2017. 

For more information on how make a submission and information about the focus of the topics read TIPS Annual Forum 2017 Call For Papers.

Aim of conference

The conference aims to deepen the understanding of the opportunities and challenges of moving to a sustainable, notably low-carbon, industrial development path.

Context for conference

In South Africa, the need to respond to sustainability challenges and seek opportunities in the transition to sustainable economic development can be traced back to the 1996 Constitution and the 1998 National Environmental Management Act (NEMA). Sustainability issues, primarily climate change, have since been progressively integrated into policy. The 2011 National Strategy  for Sustainable Development (NSSD), the 2011 National Climate Change Response White Paper, Chapter 5 within the National Development Plan (NDP) and the Industrial Policy Action Plan (IPAP) outline the need to restructure the economy to promote industrialisation and move towards a low-carbon and pro-employment development path.

Developing strategic and coherent sustainable growth strategies that consider the linkages between sustainability, notably climate change, and industrialisation requires significant further research and analysis. Moving towards a sustainable economy requires reflecting on the country’s path dependency in terms of economic structure and energy mix, and the existence of high-carbon emitting and energy-intensive industry.

Tackling sustainability challenges in South Africa requires, among other things, increased use of alternative energy sources, improved resource efficiencies, new technologies to reduce carbon emissions and environmental damage, and new socio-economic thinking. A sustainable future depends on financing these measures (including incentives), procurement procedures, localising technologies, and carbon offset processes. Taxes and penalties imposed on industry and users are also crucial considerations.

Understanding the challenges, trade-offs and pathways associated with implementing industrial policies aligned to sustainable development goals is needed. Furthermore, sustainability policies need to consider their interaction with socio-economic challenges to ensure that the impact of climate change and other environmental issues does not perpetuate and exacerbate inequitable outcomes.  Furthermore, local industries, primarily the agriculture sector and the associated agro-processing industry, stand to be severely affected by climate change, with ripple effects on food security, jobs and industrial capacity. 

The 2017 Forum will also explore reconciling environmental and socio-economic imperatives within the Southern African context.

BUILDING A VALUE CHAIN FOR THE AUTOMOTIVE INDUSTRY IN AFRICA

The Nigerian Market for automobiles is substantial and can readily sustain an automobile industry. In 2012, the country imported about $4 billion worth of automobiles of which about two thirds were pre-owned. Estimated annualdemand for vehicles is over half a million made up of 100,000 new and 400,000 used. As at 2012, the population of the middle class was 38 million and growing, assuring a sustained market for the automotive industry. Opportunities exist for South African automotive Original Equipment Manufacturers (OEMs) to participate in this market and achieve economies of scale. Alec Erwin will share findings from a recently completed research project. 

PRESENTER: Alec Erwin,  Ubu Holdings

Alec Erwin was previously Minister of Public Enterprises (2004-2008), Minister of Trade and Industry (1996 -2004) and Deputy Minister of Finance (1994-1996). He has also been President of the United Nations Conference on Trade and Development (1996-2000). Alec was previously General Secretary of the Federation of South African Trade Unions (1979-1983) and the Education Officer for the Congress of South African Trade Unions (1986-1988). He was a member of the African National Congress National Executive from 1994 to 2007. Alec has an Honours degree in Economics from the University of Natal where he was a lecturer in the Economics Department. He has an Honorary Doctorate from the University of KwaZulu-Natal and is currently an Honorary Professor at the University of the Western Cape. He previously sat on the Honorary International Investment Council of President Jonathan in Nigeria and on the Togo Presidential Investment Advisory Council and is presently on the Board of Togo Invest. 

PROMOTING LOCAL MANUFACTURING IN SOUTH AFRICA'S MOTORCYCLE INDUSTRY: THE CHALLENGES AND OPPORTUNITIES

The South African motorcycle industry is a small market in global terms and the registration figures of motorcycles in the country on an annual basis have been in progressive decline. There is currently no local manufacturing of motorcycles in South Africa and no policy in place to develop the industry. The industry is entirely reliant on imports and will require significant support to contribute to the country’s manufacturing value-addition. Is there scope to develop this industry and expand into the export market?

PRESENTER: Sithembiso Mtanga, TIPS

Sithembiso Mtanga is a senior researcher at Trade and Industrial Policy Strategies (TIPS).  He joined TIPS in 2007 and completed a Master’s Degree in Economic Policy in 2012.

Business Day - 11 October 2016 by Neva Makgetla

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Neva Makgetla is TIPS senior economist