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    Lecture at the HSRC: Joel Netshitenzhe


     February 18 2010

    Transformative Capacity And Developmental States: Lessons for South Africa

    I should thank Professor Linda Weiss for what all of us would agree are a paper and a presentation reflecting clarity of thought and elucidation.  I am quite confident that we will also agree that this is a great initiative on the part of the HSRC as we grapple with complex questions that the Professor has raised.
    Both the paper and the presentation cover critical issues at the centre of which is the  question: can ours ever become a developmental state and if so, how! I should say, though that I found her critique of South African possibilities and constraints a tad modest and diplomatic – and I will come back to some of the issues later.
    In terms of methodology, Prof Weiss’ approach of moving from the general to the particular is particularly useful in a discussion of this kind; and so is locating the concept of developmental states within the current reality of the global financial and broader economic crisis.

    Two questions arise from her observations on the crisis:

    The first one is, what should we make of state interventions unfolding across the globe, especially in the developed countries! Are these tactical manoeuvres to ameliorate the impact of the crisis on an otherwise settled system of economic relations within and among countries – in other words, efforts aimed merely at the containment of capitalism’s rapacious licence? Or are we witnessing strategic choices on paths of development aimed at reengineering relations among three social centres: the state, citizens and the market?
    The second question, quite germane to today’s discussion, is: how did developmental states fare in the crisis and what factors influenced this!

    In this respect, according to a World Bank publication, Global Economic Prospects 2010: Crisis, Finance and Growth
    • East Asian economies were more adversely affected “ the real effects of the global economic slowdown, less so by the financial disruptions which preceded [it]”. This was due mainly to a slump in global demand for their products.
    • “More than any other regions, developing Europe and Central Asia bore the brunt of [the] global financial crisis”. This was caused by such vulnerabilities as large current account and fiscal deficits, over‐reliance on foreign capital to finance domestic consumption and so on.
    • Latin America and the Caribbean region “...has been able to weather the external shocks better than other regions. Their sound macro‐economic fundamentals cushioned them in this regard.
    • “South Asia appears to have escaped the worst effects of the crisis”. GDP growth remained high, though there were challenges relating to financing the current account deficit. This may have to do with measures taken in the late 1990s to protect their financial systems and levels of domestic and regional consumer demand.

    * To download full version of Joel Netshitenzhe's response:

    Developmental States.pdfDevelopmental States.pdf

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