A Macroeconomic Framework for South Africa's Developmental State: Financialisation, Value Chains & Economic Transformation
18 October 2021 | 12h00 – 14h00 SAST
Policy Dialogue Panel
Dr Seeraj Mohamed, Deputy Director, Parliamentary Budget Office SA
Professor Susan Newman, Head of the Department of Economics, Open University, UK
Dr. Nthabiseng Moleko, Senior Lecturer & Development Economist, University of Stellenbosch Business School (USB)
Discussant: Ayabonga Cawe, Managing Director of Xesibe Holdings (Pty) Ltd; Presidential Economic Advisory Council member & MetroFMTalk host, MetroFM radio
Macroeconomic solutions to the extraordinarily high levels of unemployment, poverty and inequality and to transforming the South African economy rarely examine the roles of finance, cross-border financial flows and financialisation in shaping economic development pathways. The financialisation of the South African economy has resulted in finance becoming the largest and most influential sector of the economy and increasing deindustrialization. This state of affairs has led to the increased influence of global and domestic institutional investors and credit ratings agencies on the decisions of large corporations with regard to the allocation of finance and on government’s economic policy priorities. In this context, post-1994 macroeconomic policies have aim to increase credibility with financiers and credit rating agencies. These policy options endorsed and assisted the extractive tendencies of the dominant large corporations and exacerbated deindustrialization and unemployment.
What would revisiting these fundamentals mean for restructuring the economy and rethinking the macroeconomic priorities of the state? To answer this question and stimulate a conversation about another approach to investment and employment aimed at diversifying and deepening industrial development, this Dialogue will focus on:
• Reversing financialisation for economic transformation
• Proposing an alternative approach to SA’s economic reconstruction
• Considering elusive economic transformation via global value chain development
This is the fourth in a series of HSRC Macroeconomic Policy Dialogues, with the next one planned for mid-February 2022. HSRC would like to open these dialogues widely, we want to promote evidence-informed solutions to diverse macroeconomic puzzles that hinder transformational development in South Africa, our continent and beyond. Dialogues also aim to strengthen cooperation with policy practitioners, academia and non-governmental stakeholders.