Panel 2: Microeconomic Constraints on Growth and Employment and Possible Solutions

P2.1 Exports, Growth and Employment in South Africa

Prof Lawrence Edwards, University of Cape Town

Summary: South Africa must raise exports, is the central thread of this commentary. The writer explores the key features of South African exports that are critical for economic growth and employment creation and discusses policy implications related to promoting service exports and experimenting with an export processing zone.

"The firm level evidence for SA illustrates that exporters of manufactured goods are up to 50% more productive (value added per worker) than non-exporters."

- Prof Lawrence Edwards, University of Cape Town

"The firm level evidence for SA illustrates that exporters of manufactured goods are up to 50% more productive (value added per worker) than non-exporters."

- Prof Lawrence Edwards, University of Cape Town

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P2.2 Market Structure, Market Power and Competition Policy in South Africa: Growth and Employment challenges

Prof Liberty Mncube, Wits University and FTI Consulting

Summary: The impact of market concentration on economic growth and economic inequality are explored in this commentary. Examining the level of market concentration in South Africa the writer explores why market power is a major issue.  The causes of market concentration – both legitimate and illegitimate - are discussed, as well as the harmful consequences of illegitimate market power, which can slow economic growth, and increase poverty, joblessness and corruption.

"South Africa has a market power and concentration problem. This is so, despite the strong competition regulation institutions."

- Prof Liberty, Wits University and FTI Consulting

"South Africa has a market power and concentration problem. This is so, despite the strong competition regulation institutions."

- Prof Liberty, Wits University and FTI Consulting

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P2.3 South Africa’s Energy Policy: Opportunities and Constraints for Economic Growth and Employment

Prof Kenneth Creamer, University of the Witwatersrand

Summary: South Africa should integrate its energy policy with its industrial policy, to accelerate growth, investment and employment opportunities in South Africa. This commentary explores how building competitive new industries that can rely on more localised, less monopolistic, green energy production, requires overcoming backward-looking vested interests that to date have prevented progress in this regard.

"If South Africa successfully manages its energy transition to a reliable, low-carbon, least cost energy supply, this will have significant implications for the country’s industrialisation potential."

- Prof Kenneth Creamer, University of the Witwatersrand

"If South Africa successfully manages its energy transition to a reliable, low-carbon, least cost energy supply, this will have significant implications for the country’s industrialisation potential."

- Prof Kenneth Creamer, University of the Witwatersrand

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P2.4 South Africa’s Current Competition Policy Cases: The Search for Economic Growth

Tamara Paremoer, Competition Commission of SA

Summary: The link between competition, growth and employment are discussed in this commentary. Exploring two key areas of the work of the competition authorities: merger control and the protection of employment, and curtailing the abuse of dominance by large businesses, the writer looks at the dynamic effects of competition on employment, as well as the importance of competition policy in promoting transformation.

"The high levels of concentration, low levels of dynamism and high barriers to entry in the South African economy are well documented, as are the low levels of black ownership and control of firms. These features of the economy impose several constraints to growth."

- Tamara Paremoer, Competition Commission of SA

"The high levels of concentration, low levels of dynamism and high barriers to entry in the South African economy are well documented, as are the low levels of black ownership and control of firms. These features of the economy impose several constraints to growth."

- Tamara Paremoer, Competition Commission of SA

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