Political economy of port institutional and pricing reform in South Africa

Zulu, Jessicah Maneya

Political economy of port institutional and pricing reform in South Africa

Master Thesis

2014

Publisher

University of Cape Town

Department

School of Economics

Faculty

Faculty of Commerce

Abstract

The late 1970's witnessed many countries in the developing world shifting away from earlier models of development which were built around Import Substitution Industrialisation (lSI). These countries were experiencing economic problems which are common to the application of lSI policy particularly, high cost domestic production and overvalued exchange rates (Rodriguez, 2003). In this regard, many developing countries moved increasingly towards export-led growth strategies and trade policies which encouraged private sector competitiveness in a global economy - a model laid out in the "Washington Consensus". This model comprises a set of broad free market economic ideas which advocate macroeconomic stability, free trade, floating exchange rates and free markets to help improve economic welfare under uncertain conditions (Williamson, 2004). In the case of South Africa, also a developing country, similar challenges were experienced with the adoption of the lSI policy. Gross Domestic Product (GOP) and investment rates were low, exports of goods and services were volatile and at times negative and the external capital account had been in deficit since the 1970's (Department of Trade and Industry [DTI], 2008). Furthermore, exports were highly concentrated around mineral commodities and the tariff regime was indiscriminatingly protective of the domestic industry (DTI, 2008). The lSI policy, coupled with the sanctions against apartheid resulted in low levels of productivity and high levels of unemployment in the South African economy.

Description

Includes bibliographical references

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