An analysis of alternative objective measures of economic performance and social development.
- Authors: Hlanti, Msawenkosi Madoda
- Date: 2014
- Subjects: National income -- Economic aspects -- South Africa -- Evaluation , Economic development -- Social aspects -- South Africa -- Evaluation , Gross domestic product -- South Africa , Sustainable development -- South Africa , Social planning -- South Africa , Economic policy , South Africa -- Social conditions
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1099 , http://hdl.handle.net/10962/d1013144
- Description: The measurement of economic performance and social development has become increasingly important as societies have evolved and become more complex. At present nations do not only seek to improve economic performance but are also compelled to improve social development through improvements in socially and environmentally sustainable initiatives. Traditional measures such as Gross Domestic Product (GDP) which is derived from United Nations’ System of National Accounts (SNA) have been criticised given the inability to adequately account for these social and environmental aspects of social development. Given these perceived deficiencies in the conventional measures, several alternative objective measures have been proposed in an attempt to address these shortcomings. Therefore the primary aim of this study is to analyse, via a literature survey, these alternative objective measures of economic performance and social development. The alternative measures that constitute the survey are the Index of Sustainable Economic Welfare (ISEW), the Genuine Savings (GS), and the United Nations’ Human Development Index (HDI). Upon the completion of the literature survey, sustainable development theory is used to evaluate the extent to which the National Accounts and the alternative objective measures are consistent with Hicksian and Fisherian definitions of income and capital, which embody the concepts of sustainability and sustainable development. The evaluation reveals that the National Accounts neither conform to the Hicksian nor the Fisherian definitions of income, thus could not be viewed as a measure of sustainable income. It is found that the ISEW is consistent with the Fisherian definition of income and is also a partial indicator of sustainable development. The evaluation of the GS measure reveals that it is consistent with the Hicksian definition but not the Fisherian definition. In terms of overall sustainability, it is argued that GS is a partial measure of weak sustainability. The HDI is similar to the National Accounts, in that it is neither consistent with the Hicksian nor the Fisherian definitions of income and is also not a measure of sustainability. In summary, the study demonstrates that despite GDP's shortcomings as a measure of economic performance and social development, currently, there is no alternative approach which simultaneously addresses every flaw in GDP. However, all the alternatives yield a much better approximation of social development than GDP.
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An industrial strategy for the South African footwear subsector
- Authors: Ismail, Faizel
- Date: 1993-03
- Subjects: Footwear industry -- Economic aspects -- South Africa , Footwear industry -- South Africa -- Planning , Labour unions -- South Africa , Economic policy
- Language: English
- Type: text , book
- Identifier: http://hdl.handle.net/10962/66033 , vital:28885
- Description: There is an emerging consensus amongst economic policy makers that amongst the most important development problems facing South Africa today are the extremely high unemployment levels (estimated at 40% of the formal labour force) and the need to satisfy the basic needs of South Africa's population (ie, food, shelter, clothing and footwear etc). There is also agreement that in order to achieve these twin objectives it is necessary to obtain positive and increasing economic growth rates. The question of how these high and sustainable economic growth rates can be achieved has spawned an intense debate about South Africa's future growth path. This debate about South Africa's economic future after Apartheid is based on differing evaluations of the opportunities offered by the country's current resource endowments and the constraints inhibiting growth (Moll, 1991a, 1991b; Kaplinsky, 1991; Jordan, 1991, Levy, 1991). Some writers1 have argued that a low wage, labour intensive export strategy is the only way that South Africa can rapidly create employment and meet the needs of international competition (Moll, 1991a). Moll therefore argues that increasing the demand for unskilled labour will benefit the poor most. To compete successfully internationally on the basis of low wages (as Moll suggests) is only possible by increasing relative poverty, resulting in increases in absolute poverty, it has been argued (Kaplinsky, 1992). The recent literature (Amsden, 1989; Wade, 1990) on the success of the East Asian NICs (particularly South Korea and Taiwan) strongly refutes the neo-classical view (Little, 1979; Lai, 1983) that developing countries should grow by exploiting their static Comparative Advantage (CA), that is, exploiting the availability of abundant cheap labour. These writers (Amsden, 1989; Wade, 1990) argue that developing countries can move up the value added chain - making it possible for them to pay relatively higher wages - by selective intervention in the market A recent World Bank study (Levy, 1991) analyses the potential of South Africa's manufacturing sector to move on to a dynamic labour-demanding growth path. In analysing the potential of the Garment Sector (the most labour-intensive sector), Levy (1991) argues that South Africa's international comparative advantage lies in the mid- to-upper end of the world garment industry and expanding expons from this sector will increase employment and allow "moderate increases in real wages". In this paper we develop Levy's proposition - that a labour-demanding expon strategy is possible in South Africa for the Garment subsector - for the Footwear subsector. This study will focus on the Footwear subsector for the following reasons. This is a mature industry which is well-established in South Africa. It still remains labour-intensive and well suited like the garment subsector for a labour demanding growth strategy (Levy, 1992). It has a well developed infrastructure in South Africa. However the relative performance of this sector in comparison to that of countries at similar levels of development (the NICs) has been poor (discussed below). It is striking that Footwear has been a leading export sector for the most dynamic, Developing, as well as, Southern European economies during the 1970s and 1980s (Taiwan, Korea, Brazil, Italy, Spain, Portugal, China). Two sets of questions arise from the above discussion. Firstly, like the manufacturing sector as a whole, the performance of the South Afi can Footwear subsector has been unspectacular during the 1970s and 1980s. Why has ihis been so? What is the capability of the Footwear sector to supply the domestic market and to compete internationally ie, export? What are the implications of this for industrial policy? What incentives have been supplied to support the development of this sector and how effective have they been? What incentives will be required to advance the restructuring and development of this sector? What institutions exist in support of this industry and how can these institutions be developed and extended? Secondly, as South Africa develops a more outward oriented manufacturing strategy, it will have to understand the changing nature of international markets and international competition. How have these markets changed? What is the new basis of international competitiveness? What are the implications for South Africa? The objective of this study is to attempt to answer these two sets of questions. The second set of questions will not be answered in any detail in this study, but will draw extensively on a study undertaken by the author (see Ismail, 1992). Previous attempts at developing an analyses and strategy for the industry have been inward oriented (see Van Wyk's IDC Report, 1988) and ad hoc (BTI, 1990). Whilst Sid Cohn's Strat Plan 2000 has gone furthest in developing a systemic approach to the footwear industry, his focus on subcontracting as the main (labour) cost cutting measure has only served to gloss over the underlying inefficiencies of the industry in the management of raw materials and production. We provide a brief summary and critique of these strategies below before presenting a summary of our argument.
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