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 Periodical article |
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| Title: | Financing Faster Growth in South Africa: The Case for Reforming the Financial Sector |
| Author: | Edwards, Chris |
| Year: | 1998 |
| Periodical: | Transformation: Critical Perspectives on Southern Africa |
| Issue: | 35 |
| Pages: | 49-76 |
| Language: | English |
| Geographic term: | South Africa |
| Subjects: | investments economic development Development and Technology Economics and Trade Politics and Government |
| External link: | https://d.lib.msu.edu/tran/334/OBJ/download |
| Abstract: | To lift South Africa out of the 'quagmire' of rising unemployment and persistent poverty a radical redistribution of income and wealth and/or a faster rate of economic growth than has been achieved since the 1994 elections is required. In this article the author focuses on the rate of economic growth and argues that a high level of unemployment has persisted in spite of the rate of economic growth which has been quite strong - an average of about 3 percent a year over the three years of 1994-1996. To reduce unemployment South Africa needs a target real growth rate of at least 6 percent a year. To achieve a real growth rate of 6 percent a year at least 30 percent of the country's GDP must be invested, instead of the 20 percent of recent years. To achieve such a level of investment the South African government should be following a regime of low interest rates - instead of the regime of high rates it has been following. Lower interest rates would be beneficial not so much in directly encouraging private sector investment, but rather in reducing the debt burden for the public sector and in not encouraging speculative investment. The reduction in the debt service burden would allow public sector investment to be increased. Bibliogr., notes, ref. |
