Countertrade as a development tool: a comparative analytical approach
- Authors: Van Dyk, Johannes Jacobus
- Date: 2015
- Subjects: Countertrade , Countertrade -- South Africa
- Language: English
- Type: Thesis , Doctoral , DPhil
- Identifier: http://hdl.handle.net/10948/5054 , vital:20795
- Description: This study explores the consequences of defence countertrade arrangements for national development based on the South African experience in comparative perspective. Although defence countertrade has been controversial in many contexts, it is concluded that it may play a positive developmental role. This is premised on the central role governments can play in ensuring that countertrade's role in national economic development – global pressures and neo-liberalism notwithstanding – remains an important tool through which active industrial policy may be pursued. This can include developing and maintaining a defence industrial base (DIB) in those countries that have such capabilities. Countertrade occurs under two kinds of market conditions. The one is where there is a natural need for trading but it is constrained in some way, for example, by an absence of currency or an oversupply. Under these conditions countries can resort to bartering, which involves a commodity for commodity exchange and no money. The second market condition is one where countertrade is purposefully structured to secure reciprocal benefits as a condition of a commercial sales transaction - defence or civil in nature. This is referred to as leveraged procurement and manifests primarily as defence offsets involving the defence industrial base, which is the concern of this study. Around 40 per cent of countries, including South Africa, use various purposely structured government procurement programmes when procuring goods and services abroad. These programmes apply the principle of reciprocity through the use of internationally accepted countertrade practices that manifest in many diverse ways. Although „countertrade‘ is the collective term, it is regularly referred to as „offsets‘. Procurement leverage is used to secure some reciprocal benefit from the foreign seller (benefits sought vary from country to country). Countertrade-related practices occur widely despite the fact that the World Trade Organisation's (WTO) Agreement on Government Procurement (GPA6) rules out the use of offsets. Their use is viewed as a discriminatory procurement practice that interferes with free trade. However, the WTO allows for exceptions in the case of developing countries and also for national security and public health contracts. It is important to note that countertrade (and offset) practices, valued in billions of US Dollars, are applicable mostly to defence contracts, although becoming increasingly relevant in non-defence (i.e. civil) government procurements. This research systematically interrogated and investigated issues surrounding the origins and subsequent popular and increased use of countertrade since the 1980s. The purported negative impact of defence-related offsets on the defence industrial base (i.e. the loss or gain of jobs, technology and market share) of both the exporting and receiving countries is of particular concern to the US government and the European Union (EU). My exploratory mixed method research, together with practitioner (insider) and reflexive research approaches, culminated in a primarily descriptive, qualitative, analytical narrative. The research is further founded on structured survey questionnaires. These specific research approaches are known to be subjective and biased and I thus needed to take extra care to prevent emotive subjectivities, primarily through triangulating my findings against a variety of other views and arguments pertaining to the research question. This was done to provide for a holistic overview, and in consideration of the case study, in particular. It must be noted that South Africa has two sets of industrial participation policies and practices. One is Defence Industrial Participation (DIP) managed exclusively by Armscor, South Africa's acquisition agency, which favours pursuing defence industry development objectives. The other is the National Industrial Participation Programme (NIPP), managed independently by the Department of Trade and Industry (DTI). The NIPP is primarily focused on the civil industry with a bias towards manufacturing, investments and exports. The DIP is the focus of the case study element of this research. Since its inception in 1968, Armscor has been tasked with establishing a DIB. Until the late 1980s, this DIB made huge strides in developing unique defence equipment to cater for the harsh Southern African environment and its military operational conditions. The DIB's development was enhanced further by the various UN embargoes imposed on the former South African apartheid government. Owing to these embargoes, Armscor dealt with all its defence imports (and exports) in a clandestine manner. Armscor was the only government entity that applied countertrade from around 1988 until 1996 when the DTI introduced NIPP. During the latter part of 1996, Armscor redrafted its countertrade policy with the new DIP policy approved in early 1997. This policy was applied during the biggest arms transaction in South Africa‟s history, namely, the Strategic Defence Package (SDP). A DIP commitment of circa R15 billion resulted from the equipment bought under the SDP. This study investigated how the DIP manifested in practice from 2000 to 2012 within the DIB that involved numerous South African Defence Industry (SADI) entities. The study considered the DIB, its growth and decline, and to what extent the DIP assisted it to retain its capabilities and capacities, including the retention of jobs. Hence, parts of the case study cover issues related to the South African military complex and the SDP‟s selection process. Subsequent investigations into alleged acts of misconduct and maladministration in the selection process, fraud and corruption are also covered, although not in detail, since this matter is sub judice the outcome of the 2011 presidential appointed Arms Procurement Commission (APC) of inquiry that is anticipating completing its investigations in 2015. Although there are many derivative views on the actual defence equipment needs of the South African National Defence Force (SANDF), the study did not endeavour to analyse these views in depth as they are adequately covered in the 1996 Defence Review. Similarly, there are views expressed that South Africa paid much more for its equipment compared with similar types of equipment bought by other countries. A cost comparative analysis was not performed as the exact configuration of each type of equipment can differ substantially due to the unique operational needs of the various defence forces – the exact configuration of such equipment is not in the public domain, since it is a sovereign security concern. Despite many opposing views, it is concluded that DIP (also referred to as defence offsets) has worked for South Africa: in many ways the South African DIP practice compares favourably with internationally accepted best practices. The research‟s postulation that countertrade can be used as a possible development mechanism is therefore supported by the findings of this study that showed that DIP had a positive retention impact on the DIB, and jobs, and made a positive contribution to Gross National Product (GNP7). The study found that the 1997 DIP policy needed to be much better aligned with the broader strategic national industrial development aims and objectives, including better corroboration with the NIPP. In this respect critical inferences are made that the DIP policy primarily focused on the SADI and its capabilities, without considering its wider application in a broader industrial sense. However, in the context of the Armscor legal mandate (i.t.o. Act 57 of 1968) ensuring the establishment of a DIB in South Africa, the DIP policy was clear in its intent to specifically further the interests of only the SADI. However, the 2014 Defence Review recommends that the DIP policy should be much more focused and even prescriptive when considering specific strategic defence needs. Although DIP policy directives contain requirements for establishing strategic local capabilities and capacities that could adequately cater for logistic support, repair and maintenance of foreign produced defence equipment, this aspect was not well contracted in the 1999 SDP. There is also general consensus that foreign obligors should in future not be allowed the freedoms of choice evident in the SDP‟s DIP process, which resulted in numerous smaller companies not benefitting as was generally anticipated. Future defence contracts should not be signed without an appropriate DIP business plan. Hence, all indications are that the DIP regime in South Africa is set to become much more stringent in its application and subsequent discharge administration.
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- Date Issued: 2015
Textile and clothing industry competitiveness in the Southern African region
- Authors: Mwamayi, Kibunji Adam
- Date: 2013
- Subjects: Textile industry -- Africa, Southern , Clothing trade -- Africa, Southern , Competition, International , Africa, Southern -- Economic policy
- Language: English
- Type: Thesis , Doctoral , DPhil
- Identifier: vital:9137 , http://hdl.handle.net/10948/d1018684
- Description: This is a study of the relationship between approaches to people management and competitiveness, by examining the case of the textile and clothing industry in Southern Africa. The textile and clothing industry has historically played a major role in many national economies (including many southern African countries) contributing not only to overall economic growth, but also to the creation of significant numbers of relatively well-paid jobs. In the Southern African Region (SAR), the textile and clothing industry has undergone many structural pressures in the face of increased cheap imports from South-East Asian countries – above all, China and Bangladesh - which have resulted in the closure of many firms, and the significant downsizing of many survivors. This study seeks to explore the relationship between HR practice and organizational sustainability in the textile and clothing industry in Southern Africa region, with a particular emphasis on the cases of three countries: South Africa, Mauritius and the Democratic Republic of the Congo. Whilst at very different stages of national development, and with distinct political and developmental histories, all three countries were subject to active industrial policies, including the development of national clothing and textile industries. Again, all have faced the challenge of sustaining these industries in the face of liberalization and intensive competition from the Far East. This study is based on a multi-method approach, combining in-depth interviews with national industry surveys, and the usage of relevant documentary sources. It takes cognizance of the increasing relevance of new HRM practices and discourses to the growing field of Development Studies in the 21st century. The existing HRM literature suggests that there are a number of alternative people management strategies through which firms may secure their competitiveness, most notably strategic approaches to hard HRM (which treats people as an instrument to be strategically deployed to promote competitiveness), soft HRM (which promotes cooperative approaches to managing people) and traditional labour repression (managing people simply as a cost, to be managed in a short-term, un-strategic manner). The literature on HRM in Africa has suggested an alternative paradigm, which combines autocratic paternalism with elements of communitarianism. This study found that the bulk of firms encompassed by the study employed HR policies that recognizably fell within the soft HRM paradigm, enabling high value added production. However, an important exception lies in the area of security of tenure: firms tended to combine high levels of employee involvement and participation; as well as a commitment to human resource development, along with a persistent reliance on the usage of redundancies to adjust changes in the relative need for labour. Hence, this study highlights the limitations of theoretical approaches which see HR strategies as being necessarily coherent and self-reinforcing. Firms may broadly adhere to one approach, whilst adopting aspects of another as needs arise and in response to external pressures. An important exception to this was Mauritius, in which security of tenure appeared to be stronger, perhaps owing to the greater ease of enforcing regulations against illegal imports in a relatively small island country by allowing firms to plan for the future with greater confidence. In contrast, firms in South Africa were characterized by much lower security of tenure, against a backdrop of declining profits, reflecting the competitive challenges posed not only by legitimate low cost imports, but also illegal imports and the proliferation of rural sweatships. One again, this study highlights the relative fragility of the position of many firms and the continued importance of governmental support, most notably in terms of export incentives, support and facilitation in the adoption of new technologies, as well as better policing against illegal imports.
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- Date Issued: 2013
Trends in mobilisation and unionisation in South Africa and Germany: a comparative analysis
- Authors: Whiteley, Julianne Beverley
- Date: 2001
- Subjects: Industrial mobilization -- South Africa , Labor unions -- South Africa , Industrial mobilization -- Germany , Labor unions -- Germany , South Africa -- Economic conditions , Germany -- Economic conditions
- Language: English
- Type: Thesis , Masters , MSocSc
- Identifier: vital:3332 , http://hdl.handle.net/10962/d1003125 , Industrial mobilization -- South Africa , Labor unions -- South Africa , Industrial mobilization -- Germany , Labor unions -- Germany , South Africa -- Economic conditions , Germany -- Economic conditions
- Description: The purpose of this study is to investigate long-term trends in the union membership of South Africa and Germany, and to highlight trends in unionisation in both of these countries over a period of time. The long-term aspect of this study differentiates it from more detailed specific studies concerned with the individual fortunes of confederations or unions. The changing fortunes of trade unions have been associated with changes in work organisation, the influence of institutional pressures, or long term changes in the economic cycle. All these factors may, of course, shape and be shaped by each other. From a comparative perspective this dissertation determines whether the fortunes of unions are ultimately a product of the long waves of an economic cycle, or if other factors, such as variations in union/state relations, changes in the forms of work organisation and shifts in the employment market, impact upon union membership and mobilisation. It is hoped that the comparison of a transitional and an advanced economy may shed new light on the causes of union growth and decline, and the impact of specific social, legal and cultural variables thereon. The theoretical frame of reference for this study emerged from literature pertaining to union growth and decline. This literature discusses the historical, economic and sectoral challenges that confront the identity of unions and their ability to mobilise membership within contemporary labour markets. The entire study relies heavily on primary data collected from a wide range of sources in both countries. This method facilitates the comparison and cross-checking of information, which ensures a full and balanced study. A synthesis of the facts obtained led to certain suggestions relating to the areas in which both South African and German labour organisations could adapt their agenda and interests to the changing nature of the employment market in order to avert membership decline. The methodology of this research draws from Skopol’s work which argues that social studies ought to be grounded in historical experience in order to make sense out of specific social events that occur today. The research design utilises an initial comparative historical-political analysis of the emergence of unionism in South Africa and Germany, so as to establish those factors which have, in the past, affected union growth and decline in both countries. Thereafter, the impact of contemporary economic and sectoral trends that reoccur in the South African and German labour markets are examined and compared, in order to establish their influence on the growth or decline of union membership in both countries in the future. This study consists of four sections. The first section comprises a historical dimension that uses Valenzuela’s work relating to the political nature of labour movements to establish those factors which, in the past, have affected union growth and decline. This is done to determine whether the type of insertion of labour movements into historical national political processes, and the links formed between trade unions and political parties influences membership growth or decline. The following three sections deal with the present challenges that may affect the unions in the future. Section Two deals with factors of economic recession (namely, poverty and unemployment) which confront trade unions in the 1990s. Hyman’s Theory of Disaggregation is applied to determine if recessive socio-economic factors can account for the strength of decline of unions, as opposed to union mobilisation being purely linked to transitions between long waves of the economy as Kelly suggests. The relevance of these theories to the rise and decline of unionism in South Africa and Germany is compared and contrasted. The third section determines whether changes to more flexible forms of work organisation and shifts in the employment market can account for the contrasting strength of the South African labour movement and the decline of the German labour movement today. The way in which these issues impact negatively upon union strength in South Africa and Germany in the 1990s is compared and contrasted, again using Hyman’s Theory of Disaggregation. The final section establishes whether or not the roles adopted by the South African and German labour movements during their confrontation with labour repressive regimes impacts upon their ability to attract union membership today, despite the constraints imposed upon unions by prevailing economic and structural uncertainties. Therefore the historicity of the South African and German labour movements, (based upon the findings of the first part of this study), is referred back to. At the same time, the reactions of the South African and German labour movements to prevailing economic and structural realities, (as examined in the second part of this research) are re-examined. Three conclusions are reached. Firstly, regardless of their strengths or weaknesses, all labour organisations are capable of adjusting to the adverse changes taking place in contemporary employment markets if they prove willing to advance and defend the interests of all who work, including those in the informal sector. If unions continue to neglect the informal labour market, they run the risk of being transposed by social movements that are antagonistic to trade unions or new expressions of the workforce’s latent collectivism. Secondly, in successfully playing a social movement role that led to the downfall of Apartheid in 1994, the South African labour movement has evolved as an energetic body with a dimension of recumbent militancy that attempts to adapt its identity to the changing nature of the employment market. This enables the South African labour movement to continue to attract membership despite the prevailing economic uncertainties. In contrast, forced co-operation and consensus within the German industrial relations arena since World War Two has resulted in a less dynamic union movement that lacks initiative in adapting to the changing nature of the employment market. The result is a decline in unionism. Finally, the fortunes of unions are not, as Kelly suggests, purely a product of economic cycles. Political climates can also influence mobilisation, as has occurred in both South Africa and Germany. This implies that mobilisation is not only activated by the economic dissatisfaction of a union movement.
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- Date Issued: 2001