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Why isn't South Africa growing faster? Microeconomic evidence from a firm survey
Author(s) -
Clarke George,
Habyarimana James,
Kaplan David,
Ramachandran Vijaya
Publication year - 2008
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.1417
Subject(s) - investment (military) , human capital , labour economics , economics , corporate governance , business , capital (architecture) , market economy , finance , archaeology , politics , political science , law , history
The investment levels in South Africa have remained relatively low despite an overall picture of economic stability and good governance. This analysis looks at South Africa's investment climate, using data from an Investment Climate Survey (ICS) of over 800 firms conducted by the Department of Trade and Industry and the World Bank. It suggests that exchange rate instability and the cost of crime may be deterrents to investment. But more importantly, labour regulations may be discouraging firms from entering labour‐intensive areas. Labour costs are also high, especially for skilled workers. Efforts to improve worker skills are crucial for raising human capital levels and reducing the cost of skilled labour. Copyright © 2008 John Wiley & Sons, Ltd.