Cheap, simple and workable alternatives for growth could turn SA’s fortunes around – IRR

18 August 2020 - Lifting impediments to entrepreneurial initiative and individual autonomy would benefit all South Africans by stimulating growth, investment and job-creation, and halting the country’s economic decline.

Lifting impediments to entrepreneurial initiative and individual autonomy would benefit all South Africans by stimulating growth, investment and job-creation, and halting the country’s economic decline.

This is the thrust of the IRR’s post-Covid economic recovery strategy – Growth & Recovery: A strategy to #GetSAWorking – which was launched in an online media briefing today.  

Implementing the proposals would incur little cost, while offering the prospect of South Africa’s achieving growth levels of 7% by the end of the decade.

Writes author of the report, IRR Chief of Staff John Endres: “The idea underlying all the elements of this plan is that what South Africa needs, more than anything else, is economic growth. Growth offers the only way to get people working and allow them to lift themselves out of poverty.”

This could be easily achieved by focusing on four key objectives:

● attracting direct investment;
● maintaining and expanding infrastructure;
● creating a climate favourable to job creation; and
● implementing a programme of widespread economic empowerment instead of elite
enrichment.

The report says: “We expect there to be widespread consensus on these four measures. However, we add three necessary conditions which we believe are indispensable for the four policy proposals to work.”

These conditions are:

● a firm commitment to property rights, implying abandoning plans such as expropriation without compensation, prescribed assets and the monopolistic nationalisation of the healthcare system;
● an end to race-based policies, including Black Economic Empowerment and affirmative action, and their replacement with meritocratic and race-neutral policies like Economic Empowerment for the Disadvantaged (EED); and
● wide-ranging liberalisation of the labour market that removes barriers to entry for young and low-skilled individuals especially.

The report says: “If implemented, these proposals would give South Africans the opportunities they crave: real socio-economic empowerment and sustainable progress.”

In today’s online briefing, Endres noted: “Many South Africans are angry; our lives are not going the way they should be, and it’s time for that to change. It’s time to change anger to action … to create better futures for all South Africans.”

He said it was clear that South Africa could not “talk” itself out of its problems, and that it was time to act.

Adopting the proposals in the IRR report stood to “change the way South Africans and the world see the country”, not as a state in decline, but as a growing economy worth investing in.

“There’s a lot of liquidity in the markets, and that money will go where it is possible to get returns. If we can create the narrative of growth and optimism, the money will come,” he said.

IRR Deputy Head of Policy Research Hermann Pretorius said: “South Africa finds itself in a hazardous condition. Decades of destructive economic policies and mismanagement created a crisis that has now been intensified by the Covid-19 pandemic. There is widespread recognition that something must urgently be done to bring South Africa back onto a positive growth path. Now is the time for growth-enhancing structural reforms. Growth & Recovery: A strategy to #GetSAWorking addresses this urgent need.”

View this morning’s briefing at https://bit.ly/3auWCqE
Read the report at https://irr.org.za/reports/occasional-reports/growth-recovery-a-strategy-to-getsaworking
Comment soundbite in English by Hermann Pretorius   

 
Media contact: Hermann Pretorius, IRR Deputy Head of Policy Research – 079 875 4290; hermann@irr.org.za
Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za
Kelebogile Leepile Tel: 079 051 0073 Email: kelebogile@irr.org.za
Ends

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