New OECD report illustrates way to revive economic growth
The OECD Economic Survey of South Africa for 2017 has revealed how the country can revive economic growth.
The South African economy has registered tremendous progress over the past two decades, boosting living standards and lifting millions out of poverty nationwide.
Further reforms are now necessary, however, to revive economic growth and ensure that all South Africans can benefit from it, according to a new report from the Organisation for Economic Cooperation and Development (OECD).
The latest OECD Economic Survey of South Africa saod that wide-ranging structural reforms will be needed to put the economy on a new growth trajectory, boost job creation and improve inclusivity.
The survey, presented in Pretoria by OECD Secretary-General Angel Gurría and South African Minister of Finance, Malusi Gigaba, identified priority areas for future action, including continuing efforts to maintain macroeconomic stability, improve the business environment and deepen regional integration, all of which are critical for inclusive growth and job creation.
“South Africa has accomplished many great things in the past two decades, but building stronger and more inclusive growth will require bold action from policymakers,” Angel said. “Ensuring a better future for all South Africans will require increased access to higher education, a stronger and fairer labour market, deeper participation in regional markets and a regulatory framework that fosters entrepreneurship and allows small businesses to thrive.
Many of the necessary reforms will be difficult, but the rewards will be worth the effort.”
Given the limited scope for monetary or fiscal policy action to boost growth, the survey suggested a range of structural policy reforms. It encouraged South Africa to open key sectors, including telecommunications, energy, transport and services, to more competition. It also said that moving forward with the planned introduction of a national minimum wage will reduce in-work poverty and inequality. Wider development of apprenticeship and internship programmes will also increase the inclusion of youth in the labour market, while streamlining the labour dispute system should increase flexibility and lower barriers to job creation.
Skills shortages and mismatches remain key bottlenecks to growth and inclusiveness, and access to higher education remains limited. Establishing a universal student loan scheme contingent on future earnings, with the participation of banks and backed by government guarantees, is a feasible solution, the survey said. A recent OECD report, Getting Skills Right: South Africa, analyses skills mismatches in further detail and explores potential strategies for addressing them.
The whole presentation can be downloaded
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