Poverty-beating informal sector needs clear policies
Pippa Green and Frederick Fourie: ‘Policies that focus on supporting and enabling informal enterprises rather than on compliance with regulations and bylaws could be a crucial element’
Perhaps the most pressing economic challenge in SA is insufficient jobs. Unemployment is the biggest driver of inequality and, were it not for social grants, would be the most important determinant of poverty. "Amazingly few people work in SA," Harvard economics professor and former Venezuelan economics minister told a Johannesburg audience nearly a decade ago. Ricardo Hausmann headed the "Harvard group", which came to SA in 2007 at the behest of the Treasury to investigate ways of growing the economy that would dent the unemployment rate. The latest figures for the first quarter of 2017 put the unemployment rate at nearly 28%. Surprisingly, for a country with high unemployment and poverty, the informal sector is relatively small, comprising about 17% of the workforce — between 2.3-million and 2.6-million people. The equivalent figures for the region and large parts of Asia and Latin America are much higher, leaving SA "an outlier not only in the region but in the Global South", as ...