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South Africa recently celebrated ten years of democracy, but the country’s economic results remain disappointing. While macro-economic stabilisation has been a spectacular success, compared with similar emerging economies growth has been unsatisfactory and insufficient, especially for the needs of a population still suffering from the after effects of apartheid: poverty, inequality, inadequate access to public services and unemployment. Given the importance of the South African economy in the region, its lack of dynamism also represents an obstacle to economic take off and poverty reduction in neighbouring southern African countries.
On 7 October 2004, experts and policy makers debated a central aspect of this deficit in the growth of southern Africa: the weakness of domestic and foreign investment. One of the main aims of the discussion has been to explain the high cost of capital faced by both government and the private sector on the local capital markets, and to evaluate the economic impact of these costs. The participants, all actors and experts in the South African economy, have identified economic policies likely to reduce the cost of capital on both the domestic and regional levels, while, at the same time, contributing to increased growth in this part of the African continent. Changes in South African economic policies, their impact on surrounding countries and the challenges facing regional financial integration will figure on the menu of this half-day event.
This seminar drew on the discussions and presentations made at an experts' seminar organised by the OECD Development Centre in Johannesburg on 25 and 26 March 2004. Proceedings of the Johannesburg meeting have also served as a basis for the OECD Development Centre Policy Brief No. 25: "Which Policies Can Reduce the Cost of Capital in Southern Africa?" by Martin Grandes and Nicolas Pinaud.
Agenda
7 October 2004
Room 8, New Building
OECD Headquarters, Chateau de la Muette, Paris
9:00 – 9:10 Registration and Coffee
9:15 – 9:30 Opening Remarks by Ulrich Hiemenz, Deputy Director, OECD Development Centre and Regis Avanthay, Swiss Agency for Development and Co-operation
Session I: Chair - Ulrich Hiemenz
9:30 - 9:55 Which Policies Can Reduce the Cost of Capital in Southern Africa? By Martin Grandes and Nicolas Pinaud, OECD Development Centre (presentation)
9:55 - 10:10 Discussion by Sophie Chauvin, Economist, CEPII, Paris (presentation)
and Torsten Slok, Economist, OECD, Economics Department (presentation)
10:10 – 10:30 Floor Discussion
10:30 - 10:45 Coffee break
Session II: Chair - Helmut Reisen
10:45 - 11:05 How do South African Corporations Cope with High Cost of Capital? By Michael Power, Strategist, INVESTEC, South Africa (presentation)
11:05 - 11:25 Floor Discussion
11:25 - 11:45 How Monetary Policy can Lower the Cost of Capital By Brian Kahn, Senior Deputy Head of Research, Member of the Reserve Bank’s Monetary Policy Committee (MPC), South African Reserve Bank (presentation)
11:45 - 12:00 Discussion by Gordon Smith, Group Economist, Citigroup South Africa
12:00 - 12:15 Floor Discussion
12:15 - 12:30 Final Remarks by Helmut Reisen, Counsellor, OECD Development Centre
This Policy Seminar has been supported by the Swiss Agency for Development and Cooperation ( SDC).
For more information please contact Nicolas Pinaud (nicolas.pinaud@oecd.org).
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