Identifying weaknesses Bureaucracy and red tape The bureaucratic obstacles that businesses face have a direct impact on economic development and growth. A lot has been said about the need for reform to improve South Africa’s ranking on the World Bank’s yearly Doing Business index, which defines the extent to which the regulatory environment is conducive to the starting and operation of a firm. South Africa is aiming to be among the top 50 global performers by 2022 (Ramaphosa, 2019). That objective seems far off as South Africa fell from 82 to 84 out of 190 countries assessed in the ‘Doing Business 2020’ survey (World Bank, 2019). Participants in the webinar have raised concerns about bureaucracy and red tape, stating that it is particularly burdensome for smaller firms, and acts as a disincentive against new business start-ups. To comply with the onerous administrative legalities is time consuming and slays the entrepreneurial spirit so desperately needed in the country. It uses resources that could have been channelled towards growing rather than bureaucratic compliance issues.
Education, skills and work ethic
“The bureaucratic obstacles that businesses face have a direct impact on economic development and growth.”
Education quality contributes considerably to a country’s economic growth and getting the basics of schooling right will be important to place South Africa on a sustainable growth path. However, the South African education system continues to fall behind when achievement is measured against international metrics. The result is an education system that does not adequately prepare young people for the workplace. In the most recent Trends in International Mathematics and Science Study – a project of the International Association for the Evaluation of Educational Achievement, measuring Grade 5 level mathematics and science accomplishment – South Africa scored among the five lowest performing countries of 64 nations that took part in the assessment. The top five countries were from East Asia and include Singapore, Hong Kong, South Korea, Chinese Taipei and Japan. (Reddy et al, 2020). These countries have also been successful in achieving accelerated economic growth in recent decades. The ISI has studied South Korea and Japan to draw lessons for the South African economy. In both instances, education was a key factor in their success. South Africa’s education outcomes are inadequate despite substantial investment. Total public expenditure on education for primary, secondary, and post-secondary nontertiary education, as a percentage of total government expenditure, is relatively high when compared with Organisation for Economic Cooperation and Development countries (Education GPS, 2021).
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