Agenda Four sources of ‘de-industrialisation’ and a new concept of the ‘Dutch Disease’
by Dr Gabriel Palma Using Kaldor’s well-known concept, one of the most notable ‘stylised facts’ of the post-war period is the rapid decline in manufacturing employment in most industrialised countries and in many medium- and high-income developing countries. Although it is well known that over the long-term course of economic development, the structure of employment changes substantially, relative changes in employment on the scale and at the speed occurring during this period constitute a phenomenon without precedent. The main aim of this paper is to study the trajectory of manufacturing employment in the post-war period – in particular, the ‘inverted-U’ phenomenon of the process of economic development in which an increase in per capita income is accompanied by the percentage of employment in manufacturing first rising, then stabilising and finally falling. Dr. Gabriel Palma of the Faculty of Economics at the University of Cambridge is well-known internationally for his influential work in areas such as economic reform in Latin America and East Asia, industrialisation and deindustrialisation and growth. Mexico’s growth slowdown since 1982
by Dr Jaime Ros Over the past two-and-a-half decades, the pace of Mexico’s economic development has suffered a severe slowdown compared to the historical record of the previous 40 years. From 1982-2004, Mexico’s GDP per capita has grown at an average rate of only 0.7% per year which compares very unfavourably with the historical record of 3.2% per year over the period 1940-1981. This growth slowdown is particularly serious to the extent that it implies wasting the ‘demographic bonus’ associated with the transition towards low rates of population growth in the context of a still very dynamic growth of the working age population. In these conditions, in which in other historical experiences one can observe an acceleration in the growth of per capita incomes, in the Mexican case one observes an increasing underemployment of the labor force and a deceleration in the growth of per capita incomes. This paper reviews the causes of the slow growth of the Mexican economy over the period. Dr. Jaime Ros is Professor in the Department of Economics and Policy Studies and Faculty Fellow of the Kellogg Institute for International Studies at the University of Notre Dame in the US. Prof. Ros is a well-renowned expert in issues such as exchange rate management, unemployment and trade. He draws on a wealth of research and international experience, particularly in Latin America. Which sectors can be engines of growth and employment in South Africa? An analysis of manufacturing and services
by Fiona Tregenna This paper investigates the relationship between the manufacturing and services sectors in South Africa and between each of them and the rest of the economy, in terms of capacity to drive and support economic growth and employment retention and creation. A key question in this regard is whether manufacturing (still) has the potential to be the key engine of economic growth, or whether services or services sub-sectors can play this role in future. This has critical implications for whether the relative decline in manufacturing and rise in services in the South African economy will affect the prospects for sustainable growth and for addressing the crisis of unemployment. The findings of this research suggest that manufacturing remains more important in terms of ‘growth-pulling’ than is services. On the other hand, services are absolutely central in employment creation, both directly and indirectly. This is notwithstanding the underemployment of ‘low-skilled’ workers in services. Further, services are highly heterogeneous and sub-sectors such as ICT share similar characteristics as manufacturing. To some extent these differing qualities of sectors present a tension in prioritising growth and employment. However, this trade-off is mitigated to the extent that the current level of unemployment in South Africa itself constitutes a constraint on growth. Fiona Tregenna of the Faculty of Economics, University of Cambridge, is a Research Associate at the Employment, Growth & Development Initiative at the HSRC. |
