Saturday, 22 July 2023

Uncertain responses: Contrasting industrial policy during the COVID-19 pandemic and loadshedding

  • Year: 2023
  • Author(s): Neva Makgetla (TIPS)

South Africa’s official responses to two far-reaching crises – the COVID-19 pandemic from 2020 and escalating loadshedding in 2022 – underscored a profound, albeit unacknowledged, ambivalence about industrial policy. That reality emerged even though the democratic state has consistently called for economic reconstruction.

This policy brief summarises the divergent strategies, and then seeks to explain the divergence in priorities and scale between the responses to the two crises. It finds that government agencies could align around industrial policy initiatives on a disruptive scale if, as in the pandemic, those initiatives mirrored policies adopted in the Global North, and did not impose large costs on powerful stakeholders. More commonly, however, as with loadshedding, economic reconstruction requires innovative, tailored solutions and imposes significant burdens on powerful companies and institutions. In these circumstances, government interventions have proven modest and often incoherent. 

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