Trade and Industry

Productivity in SA: Friend or Fiend?

  • Year: 2004
  • Publication Author(s): Christopher D. Mlosy; Thomas E. Pogue
  • Countries and Regions: South Africa

Today in South Africa we are witnessing changes that are remaking the country. These changes are in the social, economic and political spheres. Under its democratic government, South Africa committed itself to the principles of free-market economy nearly a decade ago. Yet, these commitments have not borne their expected fruits. This paper analyses one aspect of this experience, the link (or lack there of) between productivity, economic growth, and employment in South Africa. It begins with a review of the expected theoretical relationship between these variables. Evidence of South Africa's productivity, economic growth, and employment experience since 1994 then follows. In evaluating these areas, nuances that emerge because of alternative definitions are sought and placed within a comparative context. The final section focuses on South Africa's jobless growth experience and formulates policy recommendations to make this relationship more favourable. First, some parallel international experiences and theoretical insights are reviewed for policy guidance. Policy recommendations to alleviate potentially problematic areas in the relationship between productivity and employment in South Africa then follow. Finally, policy recommendations are made over action that can be undertaken to enhance positive aspects of the relationship between productivity and employment in South Africa.