“Team Exports” at the WIDER conference Reply


Last week Prof Marianne Matthee and Mrs Carli Bezuidenhout (along with Prof Neil Rankin of Stellenbosch University) presented their latest research on South African exporters in Pretoria. Their research forms part of a three-year UNU-WIDER and National Treasury project. The theme of the conference was “Growth and development policy: New data, new approaches, new evidence”. The research used SARS administrative data to examine different topics from the characteristics of exporters and two-way traders, through to productivity, innovation, markups and concentration, the employment tax incentive and determinants of wages.

Marianne and Carli’s work with Neil focused specifically on trade and productivity, as well as exporting and labour demand.

The SA economy, structure and growth Reply

Channing Arndt

Yesterday we had the privilege of hosting Channing Arndt of UNU-WIDER at our seminar series. He spoke on the topic of structural change of the South African economy and used mini Social Accounting Matrices constructed for the period 1993 to 2013 to have a closer look at changes in productivity.

He outlined the familiar facts of slow economic growth and a low rate of employment growth over the period – since 2008 these growth rates have been even lower. Linking this to productivity, he characterised the sectors as follows.

Employment growth
Low High
Productivity growth High Manufacturing
Low Mining Services

We had an interesting discussion on the exports of services and the growth in the skilled wage premium.

“The people are hungry – they do not want to answer all these questions” Reply

Derick PE fieldwork

From 11 to 14 June Derick Blaauw joined Prof Rinie Schenck of the Department of Social Work at UWC in Port Elizabeth where fieldwork commenced as part of a joint research project on day labourers in South Africa. They were joined by 10 field workers, recruited from graduates of the Department of Social work at NMMU and the University of Fort Hare as well as the University of the Western Cape. The Monday was spent on training and fieldwork commenced on the Tuesday. More than 100 interviews were held with day labourers across the city during the week.

The fieldworkers reported that many of the respondents were hungry and did not achieve employment success more than once or twice per week. Real wages decreased since the previous survey in 2007/08 and competition for existing jobs increased markedly as well. Migration and the presence of foreign born migrants is a reality, bringing tension to the street corners. The research team encountered a Zimbabwean teacher on one of the hiring sites. This confirm the dire situation in Zimbabwe hinting to another wave of immigrants making their way to South Africa.

Some respondents indeed did not want to participate – a choice we as researchers obviously respected. After completion of the fieldwork a debriefing session was held where all the fieldworkers expressed their concern in terms of the socio-economic position of these vulnerable people. As researchers we can highlight their plight but the biggest challenge in future will be to offer some form of hope for those who have or are close to losing it.

The project is continuing, with fieldwork in East London and Cape Town next on the agenda in the coming months.

What Brexit can mean for South Africa Reply


‘If the United Kingdom opts in favour of a Brexit in its referendum on June 23, it will generate a significant additional period of uncertainty for the SA economy’, say Professor Raymond Parsons, of the NWU School of Business and Governance and Professor Wilma Viviers, WTO Chair and Director of the TRADE research entity at NWU. Based on a preliminary internal study of the economic implications for SA of a possible Brexit next week, the two economists believe that in the event of a Brexit SA should immediately start drawing up contingency plans to best use the two-year period within which the UK would have to negotiate its exit from the EU. SA would then need to reassess several of its key trading commitments and their future. There was now almost general agreement that a Brexit would not only have a negative economic impact on the UK and EU, but also have ripple effects on many other economies. First prize globally would be if the UK decides to remain in the EU. ‘For SA the possibility of a Brexit also does not come at a propitious time for the domestic economy’, they add.

The two economists emphasize that wide-ranging authoritative assessments of the consequences for the UK itself of a Brexit range from the Bank of England fearing it may eventually precipitate a recession in the UK economy to Nobel Economics Prize winner Professor Paul Krugman’s warning that there could be a sustained 2% of GDP loss to the British economy. Whether the actual number is smaller or larger, the result will be a definite drop in UK GDP. The UK is the fifth biggest economy globally. A setback of that magnitude in its economy could have adverse spill-over effects for many economies linked either directly or indirectly to Britain’s economy, including SA and other members of the SACU – Botswana, Lesotho, Namibia and Swaziland.