EDITORIAL

Abstract

This special edition of the South African Journal of Economics contains articles emerging from the “Evidence-based Employment Scenarios” project at the Human Sciences Research Council (HSRC) in Pretoria. These scenarios focus on identifying sustainable pathways aimed at halving unemployment and poverty in South Africa. The articles published in this edition are selected amongst the substantial body of background research prepared to support the scenarios. The studies included in this special edition cover research on employment trends, industrial employment, and the link between exchange rates and employment. We have been particularly interested in the changing character of employment in minerals-based economies and the growing importance of services in employment and output globally. The role of services in economic development and growth is very poorly understood. This volume contains two studies by Fiona Tregenna that contribute to this perennial debate. One article considers whether growing services employment was caused by outsourcing She finds that outsourcing has not been the main contributor to services employment growth. In a second article, she explores possible linkages between services and manufacturing. It is generally assumed that commercial and personal services depend on manufacturing growth: she finds that there is substantial mutual interdependence and that manufacturing is also substantially dependent on the purchases of the services sector. There is substantial evidence globally that manufacturing is contributing a smaller share of total employment at ever lower levels of per capita income. This is mainly explained by productivity improvements, resulting from technology development, technology diffusion and scale economies. The article by Tewodros Gebreselasie focuses on these questions, mostly with the aim of contributing to methodology development – Stewart Ngandu considers the impact of exchange rates on employment using a computable general equilibrium experiment. He explores how the economy adjusts to a currency appreciation. He shows how a minerals-based economy could respond to, and potentially mislead, policy makers. In particular, a currency appreciation caused by rising commodity prices can lead to short term exuberance at the cost of the health of the traded goods and services sectors that are important to long-run development and growth. Professor Albert Berry of the University of Toronto has prepared 11 country-based case studies for us: these studies focus on the employment and income distribution experience of high growth economies. They will be published as an HSRC book in 2008/9. His article in this volume presents findings on four minerals economies, namely Indonesia, Chile, Venezuela and Nigeria. Finally, I have prepared an article on employment trends in the 1990s: I ask whether the dramatic fall and rise in employment could really have happened in the 1990s as reflected in the official data, as there are so many other sources of evidence that contradict this. I particularly investigate trends in agriculture, mining, and social, personal and community services. We gratefully acknowledge the support of our funders. The research reported in these articles was primarily funded through the HSRC's grant from parliament. In facilitating this, we are grateful for the support of the Department of Science and Technology. The paper on “Revisiting South African Employment Trends in the 1990s” also had the support of GTZ, on the request of the Office of the SA Presidency. The general support of the CEO of the HSRC, Dr. Olive Shisana, must also be acknowledged, in promoting an experimental project. There is a large research team and a substantial reference group that have given their time generously to participating in workshops and in reviewing this research. Their contribution has been invaluable. We would also like to thank the Guest Editor, Professor Peet Strydom, for all his professional inputs, the referees for their excellent feedback, and Professor Philip Black and Ms Titia Antonites from the SAJE for editorial, technical and administrative support. For further information on the Centre for Poverty, Employment and Growth at the HSRC, contact +27 (0) 12 302 2402 or maltman@hsrc.ac.za or visit the website http://www.hsrc.ac.za