'Overhaul policy, dump protectionism to stimulate growth'

A leading development think-tank has cautioned authorities against protectionism that would stifle export-based economic growth.

- Eric Naki

The Centre for Development and Enterprise (CDE) further called for an overhaul of industrial policy to move it away from protectionism, towards a focus on maximising exports.

The latest report titled Action Seven: Rethink Growth, Jobs and the DTIC, which is part of the body's Agenda 24 series, suggested that the country required a new approach to master plans, tariff-setting and competition policy.

"Policy choices are not premised on maximising export growth, but on trying to replace imports with local production - an approach that has led South Africa down an increasingly protectionist path," said executive director Ann Bernstein.

Protectionist policies mean that South African firms do not face competition from foreign firms, so they have less incentive to increase productivity as quickly as is being achieved in other countries. They therefore fall behind.