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Rejuvenating South Africa's economy - Lessons from South Korea

The Inclusive Society Institute (ISI) is busy developing a new growth centred economic blueprint for South Africa. The project comprises a number of phases, the first of which is to study several economies from historically distressed jurisdictions that have successfully turned themselves into winning nations. In this second panel discussion, the focus was on South Korea. South Korea was one of the poorest nations on earth in the late fifties/early sixties, whereas today it is, globally, the 11th largest economy by GDP.

The crux of South Korea’s success story is captured in its ‘Can do’ attitude, a healthy work ethic, and the mobilisation of the nation behind its economic plan. The ‘Can do’ and work ethics, based on the New Village Movement philosophy, is inculcated in the national psyche from primary school days already.

Other unique approaches include a higher emphasis on rural development, where the rural GDP per capita outperforms the urban GDP per capita; a high focus on innovation and human development; less reliance on FDI and greater emphasis in internal savings; and a state that works in partnership with business and civil society. Whilst great emphasis is placed on human development and ensuring sufficient societal safety nets, assistance by the state in the development of enterprises is primarily based on performance as opposed to universal handouts.

South Korea’s Ambassador to South Africa, Dr Jong-Dae Park, an economist by trade and author of the book Re-inventing Africa’s Development, was the keynote presenter. South African panellists included Prof Tania Ajam from the School of Public Leadership at Stellenbosch University and a member of the President’s Economic Advisory Council, Mr Theo Vorster (the lead panellist), also an economist and CEO of Galileo Capital, and Ms Joan Fubbs, director of the Centre for Education in Economics and Finance and former chairperson of the parliamentary portfolio committee on trade and industry.

The programme was directed by Mr Daryl Swanepoel, the ISI’s CEO, who in setting the scene for the discussion, suggested that the depressed state of the South African economy obligated policymakers to take decisive action, and to make the structural reforms necessary to ensure growth in the economy. He argued in favour of developing a blended economy, with less reliance on dogmatic ideology and a greater emphasis on implementing policy that provides solutions to the twin challenges of ensuring economic growth, whilst addressing income inequality (poverty alleviation).

The ISI is of the opinion that imaginative, out of the box thinking is now required more than ever. In guiding the institute’s dialogue and policy development, few parameters will be set, but the outcomes are conditioned on two pre-requisites: that the economy be demographically transformed, that is to be made more equal and inclusive, and that it provide sufficient opportunity, safety-nets and cross-subsidiarity to ensure dignity for the poor.


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