International Perspectives and Parallels

Preface

In many ways, the apartheid era left South Africa as a 'special case' in the field of labour market analysis, with large gaps of human development particularly in older generations, a huge degree of under-utilisation of its labour force, and difficult tensions in its industrial relations. As if this heritage were not enough, the 1990s brought another scourge with potentially disastrous consequences for the life and work of the people of this country, in the form of the HIV/AIDS pandemic. For those who study South Africa's labour market, it is often hard to see many useful parallels with developments in other countries, in view of all these dramatic challenges.

And yet, there is a lot to be learned from international comparisons, even between countries with different development histories. Labour markets function with surprising similarity in countries with very different economic and social structures, although it is not always easy to draw analytical conclusions from such parallels and even more difficult to base policy recommendations on them. The focus of the present paper is not on producing as much comparable data as possible, but on finding examples of analyses and case histories on relevant themes that could stimulate and deepen the discussion in South Africa. The paper is a contribution to the Labour Market Analysis (LMA) project presently undertaken by the South African Human Sciences Research Council (HSRC) of South Africa with the support of the Swedish International Development Cooperation Agency (Sida).¹ The project aims primarily to identify priorities for future labour market research rather than to formulate recommendations for policy intervention. That is also the purpose of the present paper.

1. Changing economic structures

In comparative studies of economic development, South Africa is mostly treated as one among a score of countries that analysts refer to as 'emerging economies'. This group of economies is very diverse, and in order to capture the most important factors that influence demand and supply in the labour market, it is necessary to focus the comparisons on countries that have something in common with the South African economy. Because of its history and pattern of economic growth, South Africa has more in common with Latin America than with the rest of Africa, and it is often relevant to compare its structure and the functioning of its economy with countries like Brazil and Mexico, which also have a history of ethnic repression still reflected in big income differences.

Table 1 shows South Africa's basic economic data compared to six other middle-income economies. The group has been chosen to cover diversity rather than common patterns of behaviour, and it comprises both bigger and smaller countries, whose income levels differ widely depending on whether the comparison is made at Purchasing Power Parity (PPP) or by nominal US dollar values. Since we are studying both external and internal transactions, either of those standards is applicable to different comparisons. Other countries will be included when they are of particular interest, but it is useful to return to most of these six countries from time to time, to take note of differences as well as similarities.

Table 1.

Basic economic data of some middle-income countries

In this group of countries, South Africa is medium-sized and has a relatively high income, if the comparison is based on domestic purchasing power. The high Gini coefficient of inequality in the four first countries has its origins in the availability of mineral resources (and, in Malaysia, a plantation economy) combined with ethnic differences. The two Central and Eastern Europe (CEE) countries still show the low income differences characteristic of the former socialist economies. South Africa is an outlier as regards the Human Development Index (HDR), but this is a recent phenomenon caused by the onslaught of the HIV/AIDS pandemic since the beginning of the 1990s. In the 1980s, South Africa's HDI was closer to the other countries in the group.

The 1990s brought a lot of changes to the emerging economies, as a result of changing global patterns of trade and investment, but also as...