Promoting Growth and Employment in South Africa

This study examines the pressing challenge of generating sustainable growth, job creation, and poverty reduction in South Africa, drawing extensively on research supported by the World Bank over the last few years. The underlying message is that the challenge facing South Africa will not be solved by one (or more) “quick fix” solutions, but instead demands concerted policy initiatives to improve the investment climate, enhance labor market flexibility, and access global opportunities. Forward-looking scenarios suggest that faster growth is possible if pro-growth reforms are complemented by successful initiatives to accelerate skills accumulation, although the growing impact of the HIV/AIDS pandemic could threaten this success. Authors’ Affiliation and Sponsorship Jeffrey D. Lewis, Advisor, Economic Policy and Prospects Group, The World Bank e-mail: [email protected] THE WORKING PAPER SERIES The Africa Region Working Paper Series expedites dissemination of applied research and policy studies with potential for improving economic performance and social conditions in Sub-Saharan Africa. The Series publishes papers at preliminary stages to stimulate timely discussion within the Region and among client countries, donors, and the policy research community. The editorial board for the Series consists of representatives from professional Families appointed by the Region’s Sector Directors. Managing editor of the series: Paula J. White, AFTM3, Email: [email protected], who may be contacted for hard copies. For additional information visit the Web site http://www.worldbank.org/afr/wps/index.htm, where copies are available in pdf format. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s). They do not necessarily represent the views of the World Bank Group, its Executive Directors, or the countries that they represent and should not be attributed to them. PROMOTING GROWTH AND EMPLOYMENT IN SOUTH AFRICA