Economic Growth in South Africa: Selected Policy Issues

Abstract

Economic growth is critical for the success of the current political transition in South Africa, but there is little agreement about what will generate this growth. While much can be learned from the successes and failures of others, an effective growth strategy must be sensitive to the specific conditions of South Africa. This study provides a brief historical perspective, examines South Africa's macroeconomic policies (fiscal, monetary and exchange rate), the country's physical and human resources, the importance of the informal economy and income redistribution, and the appropriate role of government. It also considers lessons from the newly industrialized countries. Finally, the authors offer a workable growth policy consistent with long-and short-term economic issues.