While South Africa slept: why is it not like an Asian economy?
Over the last fifty years or more the most remarkable feature of global economic growth has been the growth demonstrated by the so-called ‘Asian Tiger’ economies (Hong Kong, Singapore, South Korea, and Taiwan). After the early leadership in growth by Japan we saw the next group (Singapore, Hong Kong, Korea and Taiwan) progress through the developmental stages to become modern high-income countries. This group was followed by the next wave of countries (loosely Malaysia, India and perhaps China with the latter being more of a tsunami than a wave), and then possibly Thailand and Indonesia. More lately we are seeing the ‘Tiger Cubs’ (Vietnam, Laos – the Lao People’s Democratic Republic – and Cambodia). The missing aspirant here is the Philippines, which started with a growl that faded to a whimper.
The objective of this paper is to assess the economic profile and progress of South Africa against these Asian growth economies, with special reference to the role of manufacturing in their growth and to ask if South Africa’s aspirations to emulate these growth patterns are realistic. We concur that South Africa did not capitalise on the opportunities it had in the 1990s (and later) to move forward from its then strong industrial base and large pool of cheap labour to emulate the Asian success. We appreciate that South Africa was emerging from a troubled period in its history, but we counter this by pointing out that China, Vietnam, Cambodia and Laos were all similarly emerging from their own troubled periods.
The paper starts by examining growth rates from the early 1960s, and shows that over this period and, more importantly, over a period from around 1990 South Africa has not been measuring up to Asian standards. Much has been written on the so-called Asian growth miracle, and driving this wave have been a complex mix of factors and policies. But two common themes emerge, namely their industrialisation with the emphasis on exports to the United States of America (US) and their ability to build a sound economic and overall infrastructural base from which to launch this development assault. Are these options open for South Africa? Current policy indications are that they are not.
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