Manufacturing development and the economic crisis: Restructuring in the eighties

Abstract

Abstract The particularly severe losses of manufacturing employment since 1982 should not obscure the evidence that declining growth rates can be traced back to the mid‐seventies. This article attempts to identify the most important structural features of the particular pattern of South African industrial development which are responsible for this deepening crisis. The manufacturing sector faces fundamental constraints on further expansion and these can be partially attributed to the highly 'polarised' pattern of industrial development engendered by import‐substitution and the failure to develop a broadly based mass market due to the existence of extreme income and wealth inequalities. Efforts to restore a stable growth process have taken the form of restructuring by manufacturing firms and a shift towards the introduction of neo‐conservative economic policies by the state. These have serious implications for wages and employment but it is argued that they are unlikely to provide a way out of the current economic impasse. Notes An earlier and much longer version of this paper was presented at the Workshop on Macroeconomic Policy and Poverty in South Africa at UCT in August 1986 under the title 'Crisis and Restructuring in the South African Manufacturing Sector'.