Original Research

Globalisation, economic policy and the new dualism in the South African economy

Gavin Maasdorp
South African Journal of Economic and Management Sciences | Vol 4, No 3 | a2660 | DOI: https://doi.org/10.4102/sajems.v4i3.2660 | © 2018 Gavin Maasdorp | This work is licensed under CC Attribution 4.0
Submitted: 09 July 2018 | Published: 30 September 2001

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Gavin Maasdorp, Department of Economics, University of Natal, South Africa

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Abstract

Economic dualism in South Africa has mutated from the original modem vs. traditional sector conception to one of poverty vs. non-poverty. Globalisation provides opportunities to reduce poverty, but government policies determine the outcome. The South African government's sound macroeconomic policies have not been matched on the micro side. The labour market has not been liberalised, employers are loath to increase staff numbers, and foreign investment in labour-intensive industries is not being attracted. The policy choice is one of lower real wages and more jobs or higher real wages and fewer jobs. The unemployed and those in absolute poverty would opt for the former, unionised labour for the latter. Policy reforms will be politically difficult, but without them the dual economy will persist.

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