South Africa’s Industrial Policy

Some ObservationsMaggie McMillan

IFPRI, NBER & Tufts

Observations

• Need to place South Africa in global context• Overemphasis on manufacturing?• Not enough focus on target markets• No mention of global value chains• No mention of foreign direct investment

South Africa in Context0

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Co rre la t i o n Be twe e n Se c to ra l Pro d u c ti v i ty a n dCh a n g e i n Emp lo y me n t Sh a re s i n U.S. (1 9 9 7 -2 0 0 7 )

Target Market: Africa?-2

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Average Income and Net Food Exports by Decade

Foreign Direct Investment

Global Value Chains

• Offshoring can create jobs• Blue Skies : Ghana, Egypt, South Africa, Brazil,

UK• OLAM: South Africa + 129

Conclusion

• South Africa has tremendous potential (think Olympics)

• Bold vision + action from the top is needed