Panel 3: Opportunities and Constraints in Labour-Intensive Sectors

P3.1 Could the Emperor’s New Clothes be Made in the Coega Special Economic Zone?

Prof Anthony Black, University of Cape Town

Summary: South Africa could be doing a lot better with labour intensive (or light) manufacturing. Special Economic Zones (SEZs) can be used to establish industry competitiveness and to experiment with reform, a famous example being the case of the Shenzhen SEZ in China. Using the example of Coega SEZ in the Eastern Cape, this commentary explores how industrial policy support should be used to stimulate labour intensive light manufacturing, mobilising the unemployed as a leading sector.

"Mobilising the unemployed as a leading sector means that a prime focus for industrial policy must be to equip the unemployed with skills."

- Prof Anthony Black, University of Cape Town

"Mobilising the unemployed as a leading sector means that a prime focus for industrial policy must be to equip the unemployed with skills."

- Prof Anthony Black, University of Cape Town

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P3.2 Opportunities and Constraints in Expanding Employment-intensive Sectors

Prof Fiona Tregenna, University of Johannesburg

Summary: The relationship between increasing growth, reducing unemployment and prioritising employment intensive sectors is a nuanced and complicated one. This complexity is unpacked, and the tension between needing to increase both labour productivity and the absorption of labour in developing economies with high unemployment, is presented as a critical consideration in South Africa. The suggestion is that in choosing which sectors and activities to prioritise for support, we need both those that have strong growth pulling properties and those that are strongly labour absorbing.

"In choosing which sectors/activities to prioritise for support, we need both those that have strong growth-pulling properties as well as activities that are strongly labour-absorbing (including of low-skilled labour)."

- Prof Fiona Tregenna, University of Johannesburg

"In choosing which sectors/activities to prioritise for support, we need both those that have strong growth-pulling properties as well as activities that are strongly labour-absorbing (including of low-skilled labour)."

- Prof Fiona Tregenna, University of Johannesburg

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P3.3 Constraints and Opportunities in the Clothing and Textile Sectors

Etienne Vlok, SACTWU

Summary: The South African clothing and textile manufacturing sectors are critical for economic development and job creation efforts. Over the last few decades these sectors have been negatively impacted by an increase in imports as well as customs fraud. Several key opportunities as well as significant constraints associated with prioritising the growth of these sectors, are explored in this commentary. Some of the opportunities that operate in favour of the industry include revived efforts to deal with customs fraud and new initiatives such as the Clothing and Textiles Competitiveness Programme. Challenges include those related to a weak economy and limited leadership and technical skills in the sector to drive growth.

"The importance of the clothing and textile manufacturing sectors for job creation derives from their high labour intensity, the relatively low-cost to create jobs, the high employment multiplier effect within the broader economy, and their impact on gender equity, broad-based black economic empowerment, and job creation in rural areas. "

- Etienne Vlok, SACTWU

"The importance of the clothing and textile manufacturing sectors for job creation derives from their high labour intensity, the relatively low-cost to create jobs, the high employment multiplier effect within the broader economy, and their impact on gender equity, broad-based black economic empowerment, and job creation in rural areas. "

- Etienne Vlok, SACTWU

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P3.4 A Developmental Regionalism Approach to the African Continental Free Trade Area (AfCFTA)

Prof Faizel Ismail, Director at the Nelson Mandela School of Public Governance, University of Cape Town

Summary: AfCFTA has the potential to increase growth, raise welfare and stimulate industrial development on the continent. It also has the potential to negatively affect some of the smaller, more vulnerable countries. Adopting a “developmental regionalism” approach to trade integration, the writer proposes, will give AfCFTA the best chance to catalyse the process of transformative industrial development, cross-border investment, and democratic governance in Africa. The writer explains how the pillars of this approach are gaining traction across Africa, and need to be engaged by policy makers, both conceptually and in practice.

"Transformation involves the process of moving the economy away from being based on low value-added primary products towards higher value-added production and knowledge-based products."

- Faizel Ismail, Director at the Nelson Mandela School of Public Governance, University of Cape Town

"Transformation involves the process of moving the economy away from being based on low value-added primary products towards higher value-added production and knowledge-based products."

- Faizel Ismail, Director at the Nelson Mandela School of Public Governance, University of Cape Town

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