The aim of this essay is to examine whether the NDP’s vision for economy and employment can match the SDG (number eight) of economic growth (specifically, promoting inclusive and sustainable economic growth, employment and decent work for all). Furthermore, an analysis is made of the contribution that trade and industrialization can make towards the realization of this vision. In particular, what is examined is the power of the ‘synthetic triad’ of the NDP, the country’s trade policy and its industrial policy as formulated by the Department of Trade and Industry in realizing the vision of economic and employment growth in South Africa.
The paper begins with a description of the visions and their explicit targets, as well as the current empirical reality in South Africa and within the global North. Following this, an examination of the literature on inclusive and labour-absorbing economic growth for developing countries is conducted to provide a conceptual framework – with a focus on the roles of trade and industrialization. Thereafter, the revealed conceptual framework is applied to the case of South Africa, while giving a little attention to the broader case of developing countries apropos the SDG. The conclusion then provides a summarized consolidation of the argument.
The UN SDG number eight (decent work and economic growth) is matched with the NDP vision of employment and economic growth. Particularly, the role of trade and industrialization are assessed in enabling the realization of the goals in South Africa. It is shown that trade and industrialization form the basis for accelerated labour-absorbing economic growth characterized by high productivity and higher incomes. Underpinned by this, a ‘synthetic triad’ of South Africa’s TPSF, NIPF/IPAP, and NDP is key to achieve the NDP goal. ‘Synthetic’ because there is a synthesis between trade policy, industrial policy, and the broader development policy that reflects in the synthesis between the three policy frameworks aforementioned.
At a glance
- Examines South Africa’s NDP, TPSF and NIPF/IPAP as a policy triad
- Considers WTO agreements TRIPS, TRIMS and GATS as constraints on policy space
- Relates policy design to Peter Evans’ criteria for a developmental state
- 17 sources in the bibliography
Table of Contents
1. Introduction
2. Analysis
2.1. Visions for development
2.2. Trade and industrialization: The inclusive economic growth
2.3. Trade and industrialization in South Africa
2.4. The Constraints
3. Conclusion
Objectives and Themes
This essay examines whether South Africa’s National Development Plan vision for economic and employment growth aligns with United Nations Sustainable Development Goal 8. It considers how trade and industrialization, supported by a combination of development, trade and industrial policy frameworks, can contribute to that vision.
- National development goals and decent work
- Industrialization, productivity and employment
- Trade and structural transformation
- South Africa’s development, trade and industrial policy frameworks
- Skills, labour standards and constraints on policy space
Excerpt from the Book
2.2. Trade and industrialization: The inclusive economic growth
Industrial development and industrialization has had a vital role to play in the economic growth of countries like Indonesia, Taiwan, Korea, and China (Kniivila, 2007:295). The reason that industrialization through manufacturing is key is that the manufacturing sector has faster productivity growth that allows for the expansion of productive capabilities, and it plays the leading role in diffusing technological progress throughout the economy (ECA, 2016:31). Due to the higher productivity growth, industrialization is also associated with higher per capita incomes (Timmer and Szirmai, 2000) – which enables the development of a domestic consumption base that supports further economic expansion and employment growth. There is recognition within the traditions of institutional economics, evolutionary economics, and endogenous growth theory that manufacturing (industrialization) is imperative for economic development (Szirmai, 2012) because as economic growth is mainly driven by technological change and innovation that drive productivity growth, and industrialization enables such productivity growth, it follows that industrialization is thus at the heart of modern economic growth (Kniivila, 2007:295). For economic diversification of the production structure and the creation of job opportunities for an ever-growing workforce, industrialization is a key catalyst (ECA, 2015).
Trade growth often goes hand-in-hand with industrialization as it provides an avenue for the increase in domestic production beyond the constraints of domestic demand. In this way, trade supports industrialization. Furthermore, trade (both through imports and exports) provides a key channel for the flow of services required to further improve productive capacity in agriculture, industry and services, the flow of technology, and finance, by connecting global markets to developing-country consumers and producers (UNCTAD, 2014:2). These are needed in turn for structural transformation of economies. When correctly exploited, the creation of jobs, the improvement of living standards, and the efficient use of resources can result from the opportunities brought by international trade (UNCTAD, 2014:1). However, although trade can, under certain conditions, promote industrialization, it can on the other hand lead to deindustrialization (ECA, 2015). Therefore, sequencing of trade and industrial policy is important for sustainability of industrialization – for instance, gradual trade liberalization is often better than fast or leaping liberalization when increasing the exposure of the industrialized economy to foreign competition (Rodrik, 2010).
Chapter Summaries
1. Introduction: The essay introduces the relationship between South Africa’s National Development Plan and Sustainable Development Goal 8, and outlines its approach to assessing trade and industrialization.
2. Analysis: This chapter compares development visions, explores the relationship between trade, industrialization and employment, and applies the discussion to South African policy. It also considers skills, labour standards and international constraints on policy space.
3. Conclusion: The conclusion brings together the discussion of development, trade and industrial policy and acknowledges constraints affecting their contribution to the 2030 goals.
Keywords
South Africa, National Development Plan, Sustainable Development Goal 8, trade policy, industrial policy, industrialization, economic growth, employment, decent work, economic diversification, structural transformation, policy space
Frequently Asked Questions
What is this essay about?
It examines the relationship between South Africa’s development ambitions and the roles of trade and industrialization in economic and employment growth.
What are the central themes?
The central themes include development goals, industrialization, trade, employment, economic diversification and the coordination of public policies.
What is the main research question?
The essay asks whether the National Development Plan’s economic and employment vision can match Sustainable Development Goal 8, and how trade and industrialization can contribute to that vision.
What method does the author use?
The author analyses development visions and policy frameworks, reviews literature on inclusive and labour-absorbing growth, and applies the resulting conceptual framework to South Africa.
What does the main analysis cover?
It considers development visions, the relationship between trade and industrialization, their application in South Africa, and constraints on the proposed policy approach.
Which keywords characterize the essay?
Key terms include the National Development Plan, Sustainable Development Goal 8, trade policy, industrial policy, employment and structural transformation.
What is meant by the synthetic triad?
The phrase refers to the relationship between the National Development Plan, the Trade Policy and Strategy Framework, and the National Industrial Policy Framework implemented through the Industrial Policy Action Plan.
Which international agreements are discussed as constraints?
The essay considers the World Trade Organization’s TRIPS, TRIMS and GATS agreements in relation to industrial, trade and development policy space.
Why does the essay discuss skills?
It considers education, skills and technology policies as complements to trade and industrial policy, particularly in relation to workers’ participation in industrial employment.
- Quote paper
- Abel Gaiya (Author), 2016, Exploiting the Synthetic Triad of the South African TPSP, NIPP/IPAP and NDP, Munich, GRIN Verlag, https://www.grin.com/document/376783
