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The Organisation for Economic Co-operation and Development (OECD) has urged South Africa to step up efforts and foster strong economic growth that will spur job growth. Priorities should include a growth-enhancing macroeconomic policy-mix, and better implementation of structural reforms.
“South Africa has recorded tremendous success in a number of economic and social policies,” said OECD Secretary-General Angel Gurría. But, he added, that income inequality remains high and “a high proportion of the population is out of work. Offering people a brighter future by creating jobs is a policy priority.”
The OECD therefore urged the country to implement reforms to boost competition and improve its “dualised labour market.”
“Most industries are highly concentrated, with network industries dominated by state‑owned enterprises. Large firms are able to share excess returns with their employees via collective bargaining, and in some sectors the collective agreements are extended to other firms, creating a barrier to entry for small enterprises,” the OECD said.
It warned that this resulted in a dualised job market, with a well-paid formal sector covered by collective bargaining and a secondary market where pay is low and conditions poor. Many South Africans are also excluded from work altogether.