‘Learning by importing’ in global value chains: upgrading and South–South strategies in the Ugandan pharmaceutical industry

Drawing on global value chain analysis, this article discusses the possibilities for upgrading in a domestically oriented import-dependent industry. The pharmaceutical industry in Uganda consists of a large number of importers, nine of which have upgraded into assembly and four a step further into manufacturing. The industry upgrades by a process of ‘learning by importing’. Although not engaged with global buyers, pharmaceutical producers in Uganda are tied into the global pharmaceutical value chain by international linkages with their suppliers, mainly in India, from whom they access technology and intermediates for production. Hence, this industry is based on South–South networks for production of low-value pharmaceutical products. With the globalisation of the pharmaceutical industry, an increasing number of global lead firms are ceasing to manufacture these products. This study illustrates an alternative form of industrialisation and upgrading that has not been adequately considered in the development of the African pharmaceutical industry.     

Is an Optimum Currency Area Feasible in East and South East Asia?

Abstract

In the backdrop of the recent economic crisis in the European Union, this study attempts to assess the degree of regional integration and the suitability of a monetary union in the East and South-East Asian (ESEA) region. For this purpose, we analyse the issue in a variety of ways. First, a long-run linkage of real output of the countries is tested using the cointegration analysis. Results suggest that real output of most of the countries in the region is cointegrated and move together in the long-run. To analyse the issue in detail, we focus on the impact of three different shocks, namely global, regional and country-specific, on real output of the countries. Results of impulse response and variance decomposition analysis reveal that regional shocks do not dominate in the sample countries, which is an indication of unfavourable condition to form an optimal currency area (OCA) in the region. These results are further confirmed by the outcome of computation of the modified Bayoumi and Eichengreen's Indices. Finally, we employ the concept of Generalized Purchasing Power Parity (G-PPP), which however reveals that the bilateral real exchange rate of ESEA countries move together in the long-run and share a common stochastic trend, which in turn provides some empirical support for an OCA in the region.     

Utilisation of indigenous workers and its relevance to human service organisations and development projects in South Africa∗

The article discusses major issues related to the employment of indigenous workers in human service organisations and development projects.

Main motives for introducing this new type of worker and the essential tasks they perform as well as their unique attributes are presented.

The discussion concludes by advocating the expansion of the efforts in the South African context.     

Structural change in the economy and energy needs: A South African perspective∗

The paper reviews economic structural changes and the resultant effect on the demand for energy. Seen globally, structural change is determined primarily by:

• shifts In the sectoral contributions

• technological development

• increase in the urban population

• redistribution of income.

The South African situation is analysed with respect to the following factors:

• changes In sectoral energy use as a result of the development of the economy away from an agrarian economy towards a more industrialised economy

• urbanisation and the changing energy consumption patterns especially with regard to increased food and water, housing, domestic energy, transport and waste disposal needs

• redistribution of income and projected future demand for energy.

The importance of structural change in planning for future energy needs is emphasised.     

Beyond community participation? Alternative routes to civil engagement and development in South Africa

Although community participation still enjoys a high level of support across various sectors in South Africa, its practice is fraught with conceptual and practical difficulties. This paper starts out by examining some of the problems and limitations associated with community participation, including the heterogeneity and fragmentation of many poor communities, the lack of social and material resources and community members' expectations of receiving a return from their involvement in development projects. Participatory rural appraisal (PRA) or participatory learning and action (PLA) is used as an example to illustrate some of the conceptual and theoretical limitations that characterise most approaches to participatory development. In particular it is argued that approaches such as PRA/PLA lack the theoretical basis for effectively getting to grips with the problems of participatory development. What is needed is a conceptual framework not only to understand the responses of communities, but also to locate such communities within their socio-economic contexts. The second part of the paper therefore examines three developments in social science theory that may be able to contribute to the development of a richer conceptual framework for popular participation. These are the concept of social capital, the asset-based approach to development, and the debate around the role of the state in development.     

‘Growing’ social protection in developing countries: Lessons from Brazil and South Africa

The rapid expansion of social protection in the South provides a rich diversity of experiences and lessons on how best to reduce poverty and ultimately eradicate it. Knowledge on how best to ‘grow’ social assistance, understood as long-term institutions responsible for reducing and preventing poverty, is at a premium. This article examines the expansion of social assistance in Brazil and South Africa, two of the middle income countries widely perceived to have advanced furthest in ‘growing’ social protection. It examines three aspects: the primacy of politics in explaining the expansion of social protection and assistance, the tensions between path-dependence and innovation in terms of institutions and practices, and the poverty and inequality outcomes of social assistance expansion. The article concludes by drawing the main lessons for other developing countries.     

Public assets and services delivery in South Africa: Is it really a success?

Poverty alleviation remains a pressing concern for South African policy-makers. Implementing effective anti-poverty policies requires a clear understanding of the nature and extent of poverty. The extant literature on South African poverty dynamics shows a decline in the headcount ratio over the first decade of the twenty-first century. However, the prior research largely adopts a narrow money-metric approach, or uses multi-dimensional indices that include welfare indicators based on private assets (e.g. television sets) or those that are provided publicly (e.g. access to water). This paper uses multiple correspondence analysis to measure non-income poverty trends for the period 2005–12. The novelty in this undertaking lies in an attempt to include a measure of the perceived quality of public assets and services to complement the standard indices. This provides some measure of ‘success’ of public service delivery, accounting for both changes in access and quality.     

South Africa's infrastructure service delivery needs: The role and challenge for public‐private partnerships

South Africa's development challenges include over R100 billion needed in investment in infrastructure over the next ten years. Municipalities lack the institutional and financial capacity to address this alone and have to raise private sector finance to supplement their own resources and government grants. The borrowing of capital requires a well‐run administration that is able to raise sufficient revenue to meet all running costs, including loan redemption. Municipalities are showing increasing interest in municipal service partnerships (MSPs), including public‐private partnerships (PPPs), as a way of improving efficiency and accessing capital markets. This raises a number of challenges that include understanding and dealing with the continuing negative perceptions of the role of the private sector; clarifying the roles of the private sector and the government, especially local government; and addressing those issues necessary to produce effective and efficient MSPs in South Africa.     

Sources of export fluctuations: empirical evidence from Taiwan and South Korea, 1981–2000

This paper examines the sources of export fluctuations in Taiwan and South Korea using two structural VAR models and cointegration. The empirical evidence shows that changes in real variables have a significant and persistent influence on the variation of export growth while the monetary disturbances have only a short-lived effect. Furthermore, the U.S. disturbances are found to be important for explaining export fluctuations for Taiwan, while they have an insignificant and short-run effect on South Korea’s exports. Comparing the influences of different real factors, the innovation accounting shows that changes in the world oil price have the most important and robust effects on exports in both counties.     

Are ‘Albergo Diffuso’ and community-based tourism the answers to community development in South Africa?

Conventional mass tourism shortcomings have facilitated the origin of alternative forms of tourism such as community-based tourism (CBT). Lately, another form of tourism known as ‘Albergo Diffuso’ (AD) has also been mentioned as a possible strategy to revive depressed specific local contexts, such as townships, villages and small towns. This article’s aim is twofold: first to contextualise the concept of AD in the South African milieu and secondly to investigate the possible relationship and role that CBT and AD could have. In this context, specific characteristics and similarities between CBT and AD are explored. The article’s main contribution concerns the exploration of the AD concept as an alternative form of tourism related to local community development. This is the first time that this concept has been presented in a South African context.     

Can trade liberalisation in South Africa reduce poverty and inequality while boosting economic growth? Macro–micro reflections

South Africa is trapped in a cycle of modest growth, unacceptable poverty levels and record unemployment. This has led to renewed interest on the relationship between macro (growth) and micro (poverty and distribution) issues. This paper uses a macro–micro tool that couples a computable general equilibrium model with microsimulation models to examine the impact of further unilateral trade policy reforms on growth, poverty and welfare. Trade liberalisation alone has very minimal short-run macroeconomic consequences while its long-term impacts are positive and magnified by technical factor productivity (TFP) effects. Trade liberalisation has no appreciable impact on poverty in the short run even if we allow for trade-induced TFP increases. In the long run, however, poverty reduces even in the case when we do not allow for TFP increases. Trade liberalisation policy has been found to be progressive despite the low level of tariff protection remaining in South Africa.     

A historical irony in the making? State,private sector and land reform in the South African wine industry

This article traces the development of the land distribution policy of the Department of Land Affairs (DLA) of South Africa. Despite the DLA ‘s political commitment to land reform by way of restitution, redistribution and tenure reform, to date no small‐scale wine farmers have been settled in South Africa by virtue of this policy. Three case studies describe how agricultural labourers have successfully gained access to this lucrative sector through private sector intervention. It is also argued that the small farm versus large farm debate masks the real opportunities for land reform in the wine industry.     

The main findings of the district pilot project of labour‐intensive road construction and maintenance in Botswana and the implications for similar projects in South Africa

Unemployment has been identified as one of the main problems confronting South Africa. Recently, in order to improve rural infrastructure and create employment, several pilot projects of rural road construction have been initiated in South Africa. In such a context it is considered that attention should be drawn to a pilot project carried out some time ago in Botswana to examine the potential of labour‐intensive methods in the construction and maintenance of rural roads.

The main conclusion of the pilot project was that labour‐intensive methods were viable, although attention had to be paid to several critical factors. In 1982, following its evaluation of the pilot project, the Government of Botswana decided that over the next five years the technical and organisational methods developed during the pilot project should be replicated throughout Botswana.

After a brief survey of the background to the project, the paper summarises several important features of the pilot project and its main findings. The paper closes with some comments on the implications of this pilot project for those currently underway in South Africa.     

What can economists do with South Africa's SAMs?

The South African Central Economic Advisory Service has recently published a report containing social accounting matrices for the economy as a whole, and for eight planning regions. This article provides a critical evaluation of these SAMs.

The Black states are includes in the SAMs, and the national SAM identifies seven income categories, four race groups, and ten occupational categories. Interindustry transactions are portrayed in a twenty‐four sector inter‐industry matrix. The regional SAM includes an analysis of racial incomes, and interregional flows of transfers from households, and trade and government transfers. A paradoxical result is that African migrant workers, who often hold the lowest occupations, appear in the top decile of the distribution of African incomes in the national SAM. The SAMs do not identify rural households, African households, in the rapidly growing fringe settlements around the metropolitan regions, and informal sector activities, and the article argues that these SAMs provide a snapshot of the economy which is severely out of focus.

The SAMs are based on a 1978 input‐output table and 1980 expenditure patterns. Since then changes in wage levels, the strength of Black unions, and the exchange rate of the Rand may have caused significant alterations in certain coefficients in the economy, possibly making the SAMs unsuitable for modelling policy changes.     

The South African labour market, 1995–2015

This study investigates the changes in the South African labour market in the post-apartheid period. While unemployment increased over the 1995–2015 period, employment also increased. Nonetheless, the extent of employment increase is not rapid enough to absorb all net entrants into the labour force, resulting in increasing unemployment, or an employment absorption rate of 65.3%. Unemployment is concentrated in specific demographically and geographically defined groups, most notably Africans, the lowly educated and those aged below 30 years, residing in rural areas in Gauteng. Finally, four worrying findings are observed: youth jobseekers aged below 30 years struggle to find their first job; chronic unemployment is more serious for the relatively older jobseekers (aged 45 years or above) with past work experience; employees working for small, medium and micro enterprises still stagnate at approximately 3.5 million; and jobseekers from the older age cohorts are less likely to actively seek work by enquiring at workplaces and answering job advertisements.     

South Africa's special employment programme of R600 million∗

In 1985 an amount of R6OO million was allocated for special employment projects. The most important ones were labour intensive projects by the public and private sectors, projects to support the small business sector, and the training of unemployed persons.

Various conditions were set for the programmes. Regarding the labour‐intensive projects for instance, a relatively small allowance was paid to the unemployed person in order to accommodate as many persons as possible, and to ensure the workers were not diverted from other employment opportunities. Furthermore, at least 50 per cent of the total funds allocated had to be for the wages of the unemployed persons. In terms of acceptability among both training institutions and the persons involved, the scheme for the training of unemployed persons was particularly successful.

Only a relatively small part of South Africa's unemployment problem can be addressed with a programme of this nature. Measures to address the structural unemployment problem remain first priority.     

Analysis of South Korea’s Direct Investment in China

I.General Situation of South Korea’sDirect Investment in ChinaSouth Korea’s investment in China has increased dramatically since1992,when the twocountries formallyestablished diplomatic relations.According to China’s statistics,in1992,South Korea’s direct investment in China was only US$119million.By2002,it reachedUS$2.721billion–a26.78percent annual growth on average.This was much higher thantheaverageannual growth ofinvestmentby other countries in China,which stood at10.87 pe…