Marthinus C. Breitenbach

Maize and wheat production trends in South Africa in a deregulated environment

Qualitative control measures and government regulation of the marketing of agricultural produce was seen as distorting the working of the market mechanism. Trade liberalisation, with tariffication of agricultural produce and the deregulation of the marketing of agricultural produce was therefore promoted. It was expected that producers of agricultural produce would respond to liberalisation efforts and deregulation in a way that would move production closer to some optimum point. An analysis of production trends for maize and wheat confirms that production of these commodities have moved closer to an optimum point, especially after the deregulation of these markets.

Telecentres for sustainable rural development: Review and case study of a South African rural telecentre

This paper evaluates a South African rural telecentre that may serve as a ‘best practice’ model. The paper first provides a brief literature review of telecentres and the role of information and communication technology in economic development. A qualitative evaluation of a case study is presented within the context of sustainability considerations and development outcomes; that is, showing how the telecentre has improved the lives of the rural community at Thabina. Some of the observed economic development impacts are listed in the paper and an attempt is made to capture the essence of the vital links between the use of information and communication technology (technology transfer), human development, education and economic development.

Exchange rate misalignment and economic growth : evidence from nonlinear panel cointegration and Granger causality tests

Abstract We analyse the impact of exchange rate misalignment on economic growth for a sample of emerging economies from 1970 to 2014 using a panel smooth transition regression vector error correction model. Besides, we provide a granger causality test conducted in a non-linear framework. We find that a rise in misalignment increases significantly the output in the short-run when currencies are close to equilibrium. When they are highly misaligned, the impact on growth is reduced. However, no significant impact of output on misalignment was found in the short-run. We provide evidence that misalignment granger causes the output at any given level of misalignment both in the short and long-run. Weaker granger causality was found between output and misalignment. This raises some important policy implications. Although emerging economies can use undervaluation as a growth strategy, the benefits are smaller when currencies are highly undervalued. There is, therefore, an incentive to keep exchange rates closer to their equilibrium.

MODELLING FERTILISER USE IN THE GRAIN CROP AND OILSEED SECTORS OF SOUTH AFRICA

A Partial Equilibrium (PE) model is developed to model fertiliser use in the grain crop and oilseed sectors to assess the impact of changes in the physical and economic environment on production and fertiliser use. Since the adoption of a policy of trade liberalisation and the shift towards a free market for agricultural products, the actual cropping patterns of grain crops have moved closer to the expected optimum production pattern. It is shown that the total area cultivated will decrease by 2,4 percent. Results show that except for the area under sunflower (that remains unchanged) and yellow maize that increases, the area utilised by other crops will decrease. Fertiliser use is directly correlated with production patterns in the provinces. A comparison of the base-case scenario and optimum solution revealed that the movement from a base to an optimum solution results in a drop in total area cultivated, production and exports. Fertiliser use correspondingly decreases.

Exchange rate misalignment and economic growth: On the possible transmission channels for emerging economies

Abstract Despite the large body of work that exists on the impact of exchange rate undervaluation on economic growth, only a mere literature focuses on the potential transmission mechanisms. There are authors who consider the size of the tradable sector as the operative channel through which undervaluation impacts economic growth. This is due to poor contracting environment and market failures that are prominent in the tradable sector as bad institutions “tax” tradables more than non-tradables. We look at this issue in this article for a set of emerging economies using annual data from 1970 to 2014. We find that the size of the tradable sector is indeed the operative channel through which undervaluation impacts growth. We have ruled out that bad institutions “tax” tradables more than non-tradables. Our results, robust to different undervaluation indexes, highlight instead the importance of total factor productivity surge induced by an undervaluation in increasing growth.

Quantifying shifts in primary factor demand in the South African economy

ABSTRACT This article uses a dynamic computable general equilibrium model to explain the persistence in the high levels of unemployment in the South African economy in spite of modest to relatively strong output growth. We make use of a historical simulation for the period 2006–13 and find that the capital–labour ratio increased despite a relative increase in the rental price of capital. Classical economic theory suggests that changes in industry preferences toward capital and labour lead to adjusted capital–labour ratios. We quantify the changes in industry factor preferences during this period and highlight their impact in explaining observed labour market outcomes. Other changes in the economy over this period are also quantified.