This paper critically reviews South Africa’s strategy for economic growth. The first section considers some of the macroeconomic determinants of investment, and asks whether South Africa’s macroeconomic growth strategy is ‘investor friendly’. The second section considers ‘lessons’ from international experience for growth. The third section looks at the question of what kind of investment is appropriate for a labour-demanding growth path. Is it better to go for labour-intensive investment in order to maximize the number of jobs created now or is there an argument in favour of capital and skill-intensive investment as a catalyst for more dynamic and labour-demanding growth later? ‘High productivity now’ strategies opt for the latter. ‘Hard HPN’ strategies seek to discourage low wage, low productivity activities, whereas ‘Soft HPN’ strategies seek merely to encourage greater productivity growth. The paper argues that South Africa’s industrial policy stance is consistent with Soft HPN, but that labour market policy towards wage-setting is more in line with Hard HPN thinking. Bibliogr., notes, ref.
