The Government of South Africa apparently is clear about its goals for the reform of public enterprises. In his 2001 Budget Speech (RSA, 2001a, p.1), the Minister of Public Enterprises explains ?restructuring? as the generic term taken to represent the set of strategies employed by the state to ensure that public enterprises in South Africa are efficient, effective, and powerful engines of socio-economic development.Restructuring aims to maximize the contribution that these state assets can make to de- velopment through the integration of public, private and social capital and expertise.

The post-apartheid government of South Africa inherited over 300 state- owned enterprises [SOEs], with four of the firms accounting for 86 percent of aggregate turnover, 94 percent of total income, 77 percent of all employment, and 91 percent of the total assets of these enterprises. These key enterprises, as they are collectively described in the Government's Policy Framework Paper, are in telecommunications (Telkom), energy (Eskom), transportation (Transnet), and defense (Denel). None of these firms are slated for outright privatization in the near future. The debate is joined around the wisdom of the Government?s model of reform, its so called matrix of options.

At the end of the 1960s, after a half century of rapid industrialisation, South Africa had a relatively advanced and diversified manufacturing sector. By the standards of today's advanced industrial countries, which feature in Gerschenkron's (1952) seminal analysis, South Africa was a very late industrialiser, but it was a very much earlier industrialiser than those East Asian countries which have been the stars of the manufacturing growth firmament since the 1960s.

Since the early 1970s, however, South Africa's manufacturing growth performance has deteriorated greatly, and has been especially poor since the early 1980s. This is the central fact which any account of South Afric an manufacturing in the period 1970-2000 must seek to explain.

An account of how South Africa industrialised in the decades before 1970 is necessary for understanding subsequent developments, and the forces which dislodged South Africa from its earlier, robust growth trajectory. Section 2 thus provides a short description of the main features of South African industrial development from the eve of the First World War through to the beginning of the 1970s. Section 3 deals with developments during the 1970s, a decade notable for the great gold-led commodity price boom which began in 1972; and Section 4 with the period from the early 1980s through to the late 1990s, during which manufacturing output stagnated and employment declined. In the light of the discussion in earlier sections, Section 5 considers some further perspectives on the problems of South African manufacturing over the past thirty years, and their implications for the future sectoral growth path of the economy.

Studies on the South African labour market have almost exclusively focused on the factors determining and shaping the current and future supply of labour in the country. This has, in the main, been driven by the availability of national data sets that have been limited essentially to household surveys produced by Statistics South Africa.

This has of course resulted in an extremely rich flow of useful and interesting results on the determinants of participation, employment and earnings in the South African labour market. However, the more integrated model of the labour market, would of course also need to examine the contribution of intra- and inter-firm dynamics in shaping the domestic labour market.

Until the very recent release of two firm surveys for the country, scant else was available to undertake such research. The purpose of this paper therefore is firstly to expose the reader to the labour market information embedded in the two surveys. Secondly, and perhaps more importantly, we will attempt to concentrate on those labour market issues that shed more light on firm-level skills development, skills acquisition and labour demand factors that are dictated by human capital attributes.

In essence, the paper will try and assess the contribution of firm-specific effects in shaping employment and earnings, together with providing a more coherent grasp of firms' activities and perceptions in relation to the recruitment, development and shortage of skilled personnel in their respective organisations.

This paper examines the relation between the institutional structures of advanced OECD countries and the comparative growth and investment of 27 industries in those countries over the period 1970 to 1995. The underlying thesis that the paper examines is that there is a matching between the institutional structures of countries and the characteristics of industries, which is reflected in the comparative growth and investment of industries in different countries. We find support for this hypothesis and report that the marked differences in institutional structure that exist across advanced countries are associated with comparative growth and investment of different industries. Consistent with theory, we find that relations between institutional structures and investment differ between fixed investment and research and development, and that relations between institutions and growth are sensitive to the relative degree of development of countries.

In the 1980s the UK (and Chile) began the processes of privatizing and restructuring stateowned enterprises, liberalizing the markets in which they operated and regulating their conduct. Since then many countries at all levels of development have implemented their own programmes of regulatory reform. Almost two decades after the process started it is time to take stock and to reflect on the general lessons to be learned from the UK experience. In the rest of the introduction I outline briefly the major events and themes. For detailed surveys of UK regulatory reforms see Armstrong et al. (1994), Helm and Jenkinson (1998) and Newbery (1999). Cowan (2001) covers the theoretical principles of regulation and relates them to UK experience. There were many reasons for privatization and the accompanying regulatory reform. State-owned enterprises had performed poorly in terms of both productive and allocative efficiency because of imperfect monitoring, unclear objectives and lack of competitive pressure. Privatization and, particularly, competition would weaken the power of trade unions in the enterprises. The government was unwilling to finance the major investment programmes required by the enterprises. Shifts in demand and in technology reduced the scope of natural monopoly conditions. The government was keen to obtain an immediate inflow of cash from asset sales. Equity sales offered the opportunity to extend share-ownership.

The main landmarks in the process were the privatization of telecommunications (1984), natural gas (1986), airports (1987), water and waste-water (1989), electricity supply (1990/91) and rail (1994/95). Sector-specific regulators, with a large degree of independence from the government, were established around the time of privatization to regulate dominant firms' conduct, especially their pricing. The main innovation as far as conduct regulation was concerned was the use of price caps, backed up by yardstick competition in the regionally organized industries (water and electricity). Setting price caps, however, has not proved as straightforward as was imagined by early proponents, and it turned out that regulators have to make substantial use of the tools used when applying rateof- return regulation. A difficult aspect of price control has proved to be the determination of access or interconnection prices, which are the prices that a vertically integrated firm charges rival suppliers for the use of its network services.

Issues of industry structure were initially left to one side, and British Telecom (BT) and British Gas were privatized as vertically integrated dominant incumbents. This contrasts with policy in the USA at the time, which separated AT&T vertically into a long-distance company and the regional Bell operating companies. In the UK a single firm, Mercury, was licensed to compete with BT in the long-distance market with the guarantee that there would be a duopoly for seven years. Since the end of the duopoly policy in 1991 entry into all telecommunications markets has been fully liberalized, though a decade later it is still the case that BT has a dominant market position. British Gas was left untouched as a monopsonistic buyer of gas, as the only gas transporter and with a de facto monopoly in the supply of gas. Although entry into gas supply for large customers was liberalized in a legal sense there was no competitive entry for almost ten years after it had become feasible. Thereafter the regulatory authorities chiselled away at BG's structure and conduct, until BG split itself vertically in 1997 into separate transportation and supply companies. Full competition in supply has existed since 1998.

The regional water and wastewater companies were privatized as vertically integrated entities, and only recently have there been moves to introduce some product market competition in water. The electricity industry, though, was subject to large-scale restructuring. Transmission was separated from generation and the generating company was split horizontally into three competing businesses. A power pool was established to allow spot market trading of electricity. Distribution and retail supply remained regionally organized, with a rolling programme of allowing entry into retail supply. The retail supply markets were fully liberalized in 1998. Ownership structures have changed significantly over time, with many of the regional companies being owned by foreign utilities, and some vertical reintegration has been allowed. Distribution and supply businesses have built new generation capacity and generators have been allowed to buy supply businesses once market power was deemed not to be an issue in generation.

The railway industry was subjected to the largest restructuring of all at the time of privatization. The monolithic state-owned British Rail was transformed into more than eighty companies. Provision of track, stations and signalling was separated from train operation, which was itself split into separate routes and regions and franchised. Train ownership was separated from train operating companies, and track maintenance was likewise divorced from track ownership. In the next section I consider the regulation of conduct, including price controls, quality and investment monitoring and the use of spot markets for intermediate products. Section 3 covers structural regulation and entry conditions. Section 4 considers the role of regulatory institutions. Section 5 concludes.

Two years ago, the Internet was seen as changing the world. The most prestigious business schools were rushing to create concentrations in E-commerce, and the conjunction of the entrepreneur (preferably with a Stanford degree) with the venture capitalist was heralded as the key to the "new economy", in which, according to some, there would be no more recessions. Today, the dotcoms are perceived to be dying, and the firms in the information technology sector seem to be leading the world towards a recession.

What are policy makers supposed to do in these confusing circumstances? Is an Internet policy still important for a developing country? What sectors of the economy will be affected? What are the links to telecommunications policy? The aim of this paper is to provide some elements to help analyze these problems and to discuss what economists know and do not know about the answers. I feel somewhat nervous speaking about this topic in front of this audience. Indeed, South Africa has gone through a remarkable public debate on the issue, which has cumulated in the "Green Paper on Electronic Commerce for South Africa" and the answers that have been given to that Green Paper.

However, I feel that there might be some benefits to take a somewhat more academic approach to the topic. This will lead us to the following conclusions. First, the Internet is indeed an important phenomenon, that is progressively changing many aspects of the way in which modern economies function. Second, the Internet creates opportunities, but is also a source of threats; policy makers cannot afford to ignore it. I will argue in particular that the exporting sector of all economies need access to a first rate communications infrastructure. Third, public policy is important, and it should be oriented to the creation of a high quality telecommunications infrastructure. In this perspective, the rapid introduction of competition in the telecommunications sector, and I know that this is a subject of debate in South Africa, is a necessary component of any forward looking policy in this domain.

This paper will evaluate the micro-finance sector in South Africa, its scope and development, and its role in the financial sector and the economy more generally. It is informed by the premise that households and institutions save and invest independently, and that the financial system's role is to intermediate between them and to cycle available funds to where they are needed. Consequently the primary objective of this paper is to understand the key factors that affect the micro-finance (MF) sector.

The MF industry was formally (legally) established in 1992 when the state issued an Exemption to the Usury Act that removed interest rate ceilings on small loans under R6,000.00 with a repayment period of less than thirty-six months. Since then there has been phenomenal growth of a formally non-existent industry, providing a good example of how micro-financiers were able to develop given a favourable incentive system. The rapid growth of the industry provided the impetus for a second Exemption to the Usury Act in 1999, where revisions to the amount of small loans were increased from R6,000.00 to R10,000.00, the Micro Finance Regulatory Council (MFRC) was established to manage the sector, and new regulations to govern the way that micro-loans could be administered and repayments collected were added. However, the growth of the industry has raised as many questions of the financial sector's operation as it has answered those concerning a conducive regulatory climate. Firstly, why has there been such rapid growth in the industry given that SA has a fairly sophisticated financial sector in the first place? Partly related to this is the question of who are the end-users of the loans supplied by the MF industry. Put differently, we need to understand the determinants of the demand for debt, and the segment of society who demands the services supplied by the MF industry. We then need to analyse the parameters of the regulatory framework and identify how lenders are affected by it. Lastly we will provide insights into the structure and performance of the sector in an attempt to augment the discussion.

The rest of the paper proceeds as follows. Firstly, the depth, structure and efficiency of South Africa's financial sector are discussed in comparative perspective in order to contextualise the discussion. Secondly, the structure and size of the industry are estimated. We then proceed to investigate the demand for debt using the Income and Expenditure Survey (Statistics South Africa, 1995) and an adjusted dataset compiled by Wefa Southern Africa for 1999. Lastly, we turn our attention to the regulatory framework of the sector and the degree to which it complies with international best practise.

The South African Electricity Supply Industry (ESI) is dominated by a state-owned and vertically integrated utility, Eskom, which ranks seventh in the world in terms of size and electricity sales. It supplies about 96% of South Africa's electricity requirements which equals more than half of the electricity generated on the African continent. Eskom owns and controls the high voltage transmission grid1 and it supplies about 60% of electricity directly to customers. The remainder of electricity distribution is undertaken by about 240, recently amalgamated, local authorities. The municipal distributors buy bulk electricity from Eskom, with some also generating small amounts for sale in their areas of jurisdiction. A few industries have private generation facilities for their own use, accounting for 2.8% of total electricity produced.

Since the early 1980s South Africa's trade policy regime has shifted from one of import substitution towards one of export orientation. This shift has been encouraged by trade liberalisation which accelerated in 1994 with tariff liberalisation, export orientation policies that ranged from direct support (GEIS) to marketing related support, and the GEAR macroeconomic strategy that was explicitly expected to transform South Africa into a 'competitive, outward orientated economy' (GEAR, 1996). Accompanying each of these policies is some instrument that is used to gauge the effectiveness of the policy in raising the competitiveness of South African exports. For example, the trade liberalisation and export promotion policies aim to reduce the anti-export bias associated with South Africa's history of protection (Holden, 1992, Bell et al., 1993, IDC,1997). The GEAR strategy aims to enhance the competitiveness of South African production by stabilising the real effective exchange rate at a competitive level over time.

The success of these policies has been mixed. Manufacturing exports have grown rapidly since the mid 1980s and now account for 43.8 % of total exports. Export orientation has also risen with the share of production rising from 6.6 % in 1984 to 22 % in 1998. While some of this growth was driven by surplus domestic production capacity in the 1980s and early 1990s, the continued rise in exports since 1993 as domestic demand recovered suggests that shift towards export markets has become permanent. Yet the structure of trade is still very capital and skill intensive (Bell and Cattaneo, 1997, Edwards, 2001b) and appears out of norm with other middle income countries (Tsikata, 1999). Some of this is due to number of capital biased domestic supply side policies, but the inability of labour intensive sectors to compete has also played a role (Edwards, 2001b). Employment in manufacturing has also continued to fall since many of these policies were implemented. Finally, while exports have grown, this growth is not significantly greater than other dynamic emerging countries (Golub, 2000).

This paper evaluates the competitiveness of South African production during the 1990s. Through this some insights into the mixed performance of South African exports can be achieved. The paper is structured in three parts. The first part provides a detailed review of measurements used to analyse the changing competitiveness of South African exports. The second part utilises a variety of classifications to present an overview of the changing commodity and regional structure of South African manufacturing trade. The third part utilises a 'œdynamic' Revealed Comparative Advantage measure to analyse the changing competitiveness of South African exports at a sectoral level.

This paper examines whether endogenous growth processes can be found in middle income country contexts. Estimation proceeds by means of dynamic heterogeneous panel analysis. Empirical evidence finds in favour of both knowledge spill-over effects, and of positive impacts on total factor productivty growth by Schumpeterian innovative activity. A crucial finding is that spill-over effects emerge from investment in human rather than physical capital, and that the quality dimension in human capital investment is vital in generating innovation.