DEBATE IMPROVING PRODUCTIVITY PERFORMANCE IN SOUTH AFRICA:

Trevor Bell (1995) has written a trenchant critique of the Industrial Strategy Project synthesis volume (ISP, 1995) in Transformation, 28. He has developed his argument sharply and clearly. Bell has, moreover, as all good critics should, gone beyond mere critique and provided an alternative perspective- an alternative analysis and explanation of our manufacturing performance. While, as we shall elaborate below, we disagree with much of Bell's alternative explanation and analysis, taken on its own, it is a credible argument that draws upon distinguished international authority and warrants serious consideration. However, Bell is much weaker when it comes to presenting alternative policy options. In the real world of policy research- and this is where the ISP self-consciously attempts to locate itself- the researcher is obliged to spell out credible policy implications that flow from the analysis. The ISP has identified major weaknesses in the manufacturing sector, and, on the basis of this analysis, posited policy responses. Bell takes issue with our analysis of the problem, presents an alternative explanation, but is clearly much weaker in deriving policies designed to overcome the problem. At best this is not very helpful; at worst it is the counsel of despair. We deal here with the major points of contention in the order in which they appear in Bell's critique. Disputing the Productivity Performance. Was it really that bad? While most observers see productivity growth as the key to economic performance and standard of living (Bell disputes this- something we will come back to), measures of productivity growth are notoriously fraught with difficulty and very contentious. Bell's central contention is that there is no clear evidence to support the position advanced by the ISP to the effect that South African manufacturing has been marked by a poor performance in productivity over