The horns of a dilemma: Economic discipline and economic development in South Africa

Abstract

Economic debate exploded across the South African policy landscape during the last two years. However, the discussion and many of the emergent policy recommendations seem constrained by old paradigms and confined to incremental changes. A fundamental shift of paradigm is urgently needed, to one based on a holistic view of South African society and economic realities, one which integrates macro‐economic discipline with developmental restructuring interventions. Ultimately, a democratized economy built around widespread participation of all peoples is essential to underpin democratic political processes. A framework for macro‐economic policy reforms is presented in the form of an agenda — issues that must be addressed to restore economic health. By themselves, these reforms are essential but will not be sufficient. Equally important are interventions to rebalance economic participation, closing employment and income gaps and beginning the process of stimulating growth and redistribution simultaneously. Key strategies are identified and placed in the context of a three phase economic policy approach extending into the next century.

Notes

This article is based on a DBSA research report entitled ‘Toward a democratic economy in South Africa: an approach to economic restructuring’, compiled by Lolette van Niekerk, Jerry Eckert. and Nick Vink, and on a DBSA scenario ‘Economics for a democratic South Africa: democratic strategies that might work’, by Jerry Eckert, together with new material specifically collected for this article.

Professor of Agricultural Economics, Stellenbosch University.

Senior Policy Analyst, Development Bank of Southern Africa.