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Johannesburg – South Africa’s answer to achieving inclusive growth may lie in developing its manufacturing sector said an analyst.
Dr Martyn Davies, managing director of emerging markets & Africa for Deloitte Africa, spoke to Fin24 ahead of the World Economic Forum (WEF) Africa 2017 to be held in Durban this week. Over 1000 leaders in business, government, and civil society will meet to continue discussions presented at Davos earlier this year. This includes discussions on inclusive growth.
Davies is also one of the fellows at the MasterCard Centre for Inclusive Growth. He explained to Fin24 that an inclusive economy is one in which the wealth gap is minimised and where everyone in the economy feels they are getting a “fair share”. “There is a concept of us, not one of us and them,” he said.
He pointed out that it is difficult for a resource-driven economy to achieve inclusive growth. “Almost in every case of a resource-driven economy, they have baked-in non-inclusivenes.”
He explained that the only way to grow an inclusive society was through diversification, possible through the development of the manufacturing sector. “There is no sector like manufacturing which creates large amounts of employment,” he said.
Davies added that the manufacturing sector has the benefit of providing jobs which develops intellectual property in people. “In mining, with each day you dig a hole, you’re not learning much… But if you are building on an assembly line of a BMW3 series in Rosslyn, then you have done more than digging a hole.”
If a country can “crack the code” of diversifying the economy by building a “sustainable manufacturing-driven economy” then inclusive growth can be achieved, he reiterated. “You need to have manufacturing as a large part of the economy, bottom line.”
READ: Sfiso Buthelezi: The word radical may scare, but it's same as inclusive growth
Previously, at the launch of WEF Africa 2017, Deputy Finance
Minister Sfiso Buthelezi said that policies for inclusive growth would involve the
beneficiation of primary products to improve the value of exported goods.
Buthelezi also said that there was no difference between radical economic transformation and inclusive growth given the outcomes of both.
However Davies told Fin24 that inclusive growth is not a “policy issue” and that radical economic transformation is a “non-sensical” buzz phrase.
Davies added that he had attended a number of forums before, where the concept of radical economic transformation was presented, but labelled differently.
Previously, political analyst Ralph Mathekga told Fin24 that radical economic transformation and inclusive growth are not the same, and that radical economic transformation was the means to achieve inclusive growth.
Mathekga highlighted the importance of promoting debate on the issue. “People should debate how you get there. Do you radically transform the economy and what does it actually mean to radically transform the economy?”
