Latest OECD economic assessment of SA
From a business perspective, while some of the recommendations may require further robust debate, the crux of the OECD (Organisation for Economic Co-operation and Development) appraisal correctly supports AsgiSA (Accelerated and Shared Growth Initiative - South Africa), makes key recommendations for its bolstering, and above all, strongly urges its speedy implementation. The persistence of very high unemployment, concentrated in one segment of the population, even in the face of several recent years of robust economic growth, gives urgency to the promotion of labour-intensive growth through AsgiSA.
BUSA sees the OECD report as particularly timely at a stage when SA, in common with many other countries, is also grappling with the global economic slow-down and associated financial volatility - and in seeking confidence-building measures that underpin sustainable growth. BUSA also agrees that at present the large current account deficit is the main source of macro-economic vulnerability for SA and is partly a reflection of years of relatively weak export performance. South Africa clearly has to accord a much higher priority to innovative ways and means of strengthening its global competitiveness.
BUSA therefore agrees with the OECD report that South Africa could benefit from a comprehensive strategy to increase competition, including a more competitive-friendly regulatory framework, especially for small businesses. This is one of the reasons why BUSA has strongly pressed for the urgent introduction of a regulatory impact assessment mechanism (RIA) in SA. While BUSA accepts that SA has always had a mixed economy, it agrees that state ownership and intervention in SA often acts as a major barrier to entry and new investment. It therefore welcomes, for example, the OECD call for more prospective private participants in the sphere of electricity generation.
Generally, BUSA believes that decision-makers in the public and private sectors who want to see AsgiSA's socio-economic goals realised by 2014 should seriously study the OECD‘s pertinent recommendations. BUSA also agrees that, in the long term, a programme of greater convergence should be envisaged between South Africa's social, economic and political structures and the generally accepted standards established by the OECD. In making this commitment, a national dialogue involving South African society more broadly will be required and will therefore have to engage stakeholders on the way forward with respect to the partnership between the OECD and South Africa.
View the Economic Assessment of SA 2008 here.
