JACQUES MORISSET: Waking up sleeping giant SA will need public capital and businesses dynamism
The state must urgently invest in infrastructure to upgrade the stock of public capital
SA has lost its two main levers of economic development: public investment in physical and social infrastructure (think China, which invests in it almost 20% of its GDP every year) and a Schumpeter-like creative destruction process through which obsolete firms are replaced by innovative ones (think IBM and Microsoft).
The SA economy, a sleeping giant on the continent, can achieve a faster and more inclusive trajectory of growth only if the country rebuilds its public capital stock and dynamises its businesses, especially by creating synergies between the public and private sectors. This simple lesson is derived from economic theory and empirical evidence in fast-growing countries. ..
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