SHAWN HAGEDORN: Infrastructure spending is no magic bullet without a growth plan
Competitiveness and global integration are the way forward, not redistribution
None of our leaders has produced a viable growth plan, yet many support ramping up infrastructure projects to spark jobs and growth. While it is unrealistic for any country to expect infrastructure investments to spur growth without a plan, SA has special challenges.
If we view the global economy as a computer network, the cost of upgrading SA’s hardware is high, whereas exceptional performance gains are to be had through better network integration. That all of today’s successful economies are extraordinarily integrated into the global economy highlights SA’s central political-economic disconnect. Our governing party’s electoral success largely reflects the dependencies it has created through emphasising redistribution. The resulting policy framework is incompatible with pursuing global integration. Yet our only path to sustained high growth is through expanding value-added exports...