Injecting Dynamism into the Private Sector : Priority 4

Overview & Synopsis

The new political context emerging from the May 2024 elections provides a unique opportunity for South Africa. The alignment of economic and political incentives, in the sense that improving the economy is essential for gaining political power, offers a platform to launch a decisive transformation process, even if there is not yet an agreement on which economic reforms to implement. Such alignment was key behind the successful economic transformation of China in the early 1980s, Vietnam in the late 1980s and 1990s, Poland in the 2010s, and India in the early 2020s. Those successes were anchored on a development bargain, whereby the country’s elites shifted from protecting their own positions to gambling on a growth-based future. This report offers pragmatic policy options, tailored for South African policymakers who want to obtain short-term results, while creating momentum for structural reforms, resume growth, and improve the overall welfare of their citizens, especially the most disadvantaged.