A preliminary evaluation of the new RIDP and its impact on regional development in South Africa

The debate on regional political autonomy makes regional economic development a subject of central importance. Current policy is embodied in the Regional Industrial Development Programme (RIDP), as revised in May 1991. Regional industrial policy in South Africa originated in 1956 with the Border Industry Programme, whose objective was to create economically independent sovereign states, Subsequent shifts of emphasis from socio‐political objectives towards a predominantly economic orientation in the 1991 RIDP were expected to concentrate the allocation of resources to industry at locations with greater natural potential for industrial development.

An evaluation of the preliminary results of the 1991 RIDP confirms these expectations in that, as far as capital investment is concerned, a certain degree of concentration is already discernible especially in metropolitan areas and secondary cities. However, it seems there are a number of factors present in the market‐place that are still inhibiting the full realisation of the objective of concentrated industrial development at locations with a natural potential for industrial development. The existing institutional development framework, the availability of relatively cheap excess infrastructure in certain locations and the spatial application of the new RIDP are some of the factors that could possibly have influenced locational decision making during the last 20 months.

Therefore, although the new RIDP is more market orientated than its predecessor and certainly much more economically sustainable, a number of issues still need attention, and further adjustments to the programme should be made if the various regions are to be developed optimally and scarce economic resources utilised effectively.     

An appropriate development strategy for Southern Africa∗

The limited successes achieved with development in the Third World and the national states in Southern Africa have necessitated a considerable change in development thinking and practice. The conventional developmental approach, which is based on growth models, is inappropriate for the conditions in the LDCs. A new development approach, coupled with an appropriate development strategy, has culminated in the development literature.

In this article the poverty problem in Southern Africa is outlined as a general background, whereafter the new development approach and a few guidelines for an appropriate development strategy is discussed. The application of the new strategy in the circumstances of Southern Africa is highlighted.     

Microenterprise,Multinational Business Support,and Poverty Alleviation in South Africa's Informal Economy

The authors examine corporate programs that support microenterprise development in Africa. Specifically, the analysis assesses the extent to which local income and sales are affected by Coca-Cola's initiatives to assist South Africa's microenterprise in the retail trade sector. To quantify the impact, questionnaires were obtained from owners of small-scale retail establishments in the country's vast informal economy. Regression analysis is performed on key variables from the survey, testing hypotheses advanced to explain the size of an owner's income and sales. In addition to business development support, the explanatory variables include startup capital, size, and male/female ownership. It appears that business development support has a positive effect on lifting income and reducing poverty for microenterprise owners, after controlling for other influences.     

A targeted approach to informal business development: the entrepreneurial route

The present paper maintains that initiatives to promote and support small businesses need to focus on those with growth potential rather than on the small business sector as a whole, and that the human factor, especially entrepreneurial intentions and behaviour, is the overwhelming force in small business success. Empirical evidence shows that many entrepreneurs setting up businesses in the informal economy of South Africa have little business acumen. The majority of informal businesses operate as survivalist entities with limited development and growth potential. The paper suggests that only between 10 and 15 per cent of informal entrepreneurs have sufficient business skills to expand and develop their businesses. These should be the focus of policy initiatives. Separate collective support measures should be designed to make the business environment more hospitable to low-potential informal businesses.     

The policy implications of an appropriate development strategy for Southern Africa

The development strategies of the past have not lead to meaningful development results. The fruits of economic growth do not automatically reach the poor groups. The conventional development approach (growth strategy) is unable to produce any significant development results, nor is it capable of eradicating poverty. This experience has culminated in a more appropriate strategy for the circumstances in the LDCs. In a previous article in this journal, the magnitude of the poverty problem and the conceptual framework of this relatively new approach were discussed. This article highlights the policy implications, in terms of appropriate development programmes, of this approach.     

Informal retailing through home-based micro-enterprises: The role of spaza shops

The informal trade sector constitutes an important part of the South African economy, with estimated sales of R32 billion in 2002. Its emergence is largely attributed to the divergence between the growth in population, especially the urban population, and employment growth in the formal economy. Growth of informal enterprises, especially in the retail sector, is also thriving on the demand of less affluent households, whose household needs for unsophisticated and affordable products are aptly supplied by the informal sector. The aim of this article is to focus on one of the prominent sub-sectors of informal retailing, namely spaza or tuck shops, defined as small retail businesses which operate from a residential stand or home. Particular attention is paid to the size, role and characteristics of spaza trade in South Africa, which is estimated to account for nearly 3 per cent of South Africa's retail trade.