Corporate social responsibility has become the business issue of the 21st century. Heightened expectations of the business sector, globalisation and increased media attention on the role of business in society are casting an intense spotlight on this issue. As a result, pressure has built on business to play a larger role in bringing about socio-economic development to many local communities where they operate. While for a long time companies have been involved in the community on a philanthropy basis, many companies today are reassessing the manner in which they conduct their corporate social responsibility programmes. Many companies are including corporate social responsibility issues into their strategic planning process and overall corporate strategy. Emphasis is given to certain strategic indicators that must be present in order for a company to be said to have taken a strategic approach to corporate social responsibility. This study adopted a critical-realist approach using a case study method to evaluate DaimlerChrysler South Africa’s corporate social investment programmes in the local community of the Border-Kei region against these strategic indicators. This new form of engagement is even challenging for a multinational corporation, which may feel that it is only obliged to assist the local community where its corporate headquarters is located. But as companies derive an everlarger share of revenue and profits from international operations, multinational companies are being called upon to redefine “community”, by looking beyond local, domestic and geographical communities to include those in regions where they have factories or factories operated by key suppliers. This study found that DCSA was strategically involved and had a good relationship with its local community. However, the company needs to be more connected with the rural communities to make local projects more successful especially after handover.

This thesis presents a theoretical analysis of developments in the South African monetary banking sector and money market. In the first section, evolution of the political, social and economic environments over the past few decades are discussed to provide the reader with an idea of some factors responsible for the underdeveloped nature of this market. It has been argued that the domestic political and economic landscape is relatively stable. Nevertheless, factors such as Zimbabwe’s political and ensuing economic turmoil, coupled with numerous financial crises in other developing nations have had negative consequences on domestic financial market development and economic growth. The current state of monetary policy is also analysed, within the economic environment, and various policy considerations have been put forth concerning the inflation targeting policy. The thesis then goes on to scrutinise the statutory and institutional environments within which the monetary banking institutions operate. Recent changes in the regulations governing the operations of these institutions are identified, together with the consequences of such laws on banking institutions and possible amendments have been suggested. In particular, a system of Asset Based Reserve Requirements (ABRR) has been recommended, in place of the current cash reserve requirement, to ensure regulators create a level playing field in the financial sector. The system can also provide authorities with the necessary control required to direct funds to the most desirable sectors of the economy. Development of the interbank market and the effect of reduced banking competition on the efficacy of the South African Reserve Bank’s refinancing operations and inflation targeting policy are also considered. Finally, the thesis analyses some effects of financial development on the South African economy, and whether it is in the best interests of the country to pursue financial reforms with such vigour. While financial development may bring South Africa closer to international standards of best practice, the timing and extent of the reforms will be critical to guarantee success.

Various studies conclude that accelerated economic growth and development are necessary in South Africa to make a significant contribution towards reducing high levels of unemployment, inequality and poverty. Moreover, in theories of economic growth the export sector is frequently accorded a special role in encouraging faster economic growth, which is often supported by empirical evidence. Nonetheless, a question that remains unresolved is whether higher export growth leads to higher economic growth in South Africa and what particular role exports may play within the overall economic growth process of the country. This study applies Johansen’s cointegration procedure, impulse response functions, variance decomposition analysis and Granger causality tests to shed light on the channels through which export growth may impact South Africa’s economic growth rate. Quarterly time series data ranging from 1975q1 to 2012q4 is employed in the study’s empirical tests. The empirical results lend support to the idea that the role of exports in the economic growth process fundamentally lies in their ability to encourage investment and capital formation. While export growth supports higher economic growth in the short-run, it does not have the same effect in the long-run. Nonetheless, with export growth supporting faster capital formation in South Africa, and capital formation, in turn, significantly increasing economic growth in the long-run, the impetus to growth stemming from exports has been found to lie in the channel to capital formation. On the basis of the empirical results, not only are exports a critical requirement of higher investment, but they are also anticipated to play a prominent role in lifting the balance of payments constraint that would make investment-led growth possible in the first place. Overall, a strategy of export-led growth that does not explicitly emphasise the export-capital-growth connection is likely to fall short of reflecting the dynamics contained within the exports-growth relationship in South Africa.

Small town economic decline has been experienced in many countries across the globe and can be explained through Geographical Economics, particularly the New Economic Geography, which suggests that agglomeration occurs as a natural outcome of high transportation and transactional costs. Yet despite the economic rationale behind their decline it is not an economic inevitability and there is evidence of towns in the United States, New Zealand and Canada that have reversed their economic fortunes. [n South Africa approximately 5 million people live in the 500 small towns and many more live in their rural hinterlands where povelty levels are extremely high within a national context. Within this context the thesis examines the current economic status and potential growth prospects of small towns in the Eastern Cape Midlands in South Africa in order to identify critical growth dri vers within small town economies. Five small towns were selected for the study via means of a purposive sample and were subjected to two regional modelling techniques, namely Shift-Share Analysis and Economic Base Theory to determine their current economic trends and past growth patterns, while a Social Accounting Matrix was utilised to identify important sectoral linkages, potential avenues for growth and evident leakages within small town economies. The sampled towns experienced negative economic growth trends between 1996 and 200 I, the primary loss in employment being accounted for by regional economic changes as opposed to national or industrial trends. The decline was more severely felt in primary/industrial sectors of the economy; evidence was found that manufacturing activities declined in all of the centres, despite the industry growing nationally. The Social Accounting Matrix highlighted strong links between the agricultural and services sectors within the national economy. Thus, considering that agriculture was identified as the primary economic driver within the region and the services sector the largest employer in all of the towns it is evident that the economic potential of the towns is to a certain extent linked to the success of agriculture in their hinterlands. Seven growth drivers, namely size, local economic development, existing markets, existing industries, infrastructure, municipal leadership and local entrepreneurs and were linked via means of a scoring framework to the sampled towns' economic potential. Whilst the results of actually determining a towns economic potential are not definitive the study does provide useful insights about the impact and potential role played by these drivers. Linked to this scoring framework and to Cook's (1971) hierarchy of places in the Eastern Cape Midlands four categories of towns were identified in the commercial falming areas and recommendations were made about appropriate developmental interventions at a municipal level, such as the need to retain local entrepreneurs and to invest in social amenities. Considering the evident need for development in rural areas the study provides critical insights into how to prioritise development strategies within small rural towns in commercial farming areas. In addition it would enable municipalities to critically reflect on their municipal Local Economic Development strategies and the relevance within the context of small towns. / KMBT_363 / Adobe Acrobat 9.54 Paper Capture Plug-in

The goal of the study is to examine the relationship between financial sector development and output growth in the agricultural, mining and manufacturing sectors in South Africa. The analysis is based on the hypothesis that financial development is essential for promoting production growth in an economy. To test the hypothesis, in the South African context, the vector autoregressive model (VAR) framework and Granger causality test are applied to a quarterly data set starting from 1970 quarter one to 2009 quarter four. The results suggest that financial intermediary development (bank based measure) and stock market development (market based measure) have a positive impact on output growth in the agriculture, mining and manufacturing sectors in South Africa. There is evidence of a one way causal relationship between financial sector development and sectoral output growth. Particularly, there is evidence that financial intermediary development and stock market development causes output growth in the agriculture, mining and manufacturing sectors in South Africa. However, there is no evidence showing causality running from sectoral output growth to financial sector development. The results provide evidence supporting the theory which states that financial development is essential to promote output growth in a country i.e. in our case South Africa. Thus an efficient financial system which promotes efficient channeling of resources towards the agricultural, mining and manufacturing sectors should be built.

This study examines the nature of the relationship which exists between mining sector production and development of the financial systems in South Africa. This is particularly important in that the mining sector is considered to be one of the major contributors to the country’s overall economic growth. South Africa is also considered to have a very well developed financial system, to the point where the dominance of one over the other is difficult to identify. Therefore offering insight into the nature of this relationship will assist policy makers in identifying the most effective policies in order to ensure that the developments within the financial systems impact appropriately on the mining sector, and ultimately on the economy. In addition to using the conventional proxies of financial system development, this study utilises the principal component analysis (PCA) to construct an index for the entire financial system. The multivariate cointegration approach as proposed by Johansen (1988) and Johansen and Juselius (1990) was then used to estimate the relationship between the development of the financial systems and the mining sector production for the period 1988-2008. The study reveals mixed results for different measures of financial system development. Those involving the banking system show that a negative relationship exists between total mining production and total credit extended to the private sector, while liquid liabilities has a positive relationship. Similarly, with the stock market system, mixed results are also obtained which reveal a negative relationship between total mining production and stock market capitalisation, while a positive relationship is found with secondary market turnover. Of all the financial system variables, only that of stock market capitalisation was found to be significant. The result with the financial development index reveals that a significant negative relationship exists between financial system development and total mining sector production. Results on the other variables controlled in the estimation show that positive and significant relationships exist between total mining production and both nominal exchange rate and political stability respectively. Increased mining production therefore takes place in periods of appreciating exchange rates, and similarly in the post-apartheid era. On the other hand, negative relationships were found for both trade openness and inflation control variables. The impulse response and variance decomposition analyses showed that total mining production explains the largest amount of shocks within itself. Overall, the study reveals that the mining sector might not have benefited much from the development in the South African financial system.

Foreign Direct Investment (FDI) flows into South Africa have been very low for several decades, and this research examines the reason(s) why this has been the case since 1994. There is a common belief amongst economists that there is a positive relationship between the amount of FDI received and economic growth, thus the desire to attract greater FDI inflows. A literature review was conducted to establish the determinants of FDI globally and then data were collected and assessed to test which causes are most important. The performance of developing nations in attracting FDI was first compared with that of the developed nations. Thereafter, a regional breakdown of FDI flows was presented, with a particular focus on the Southern African region. FDI inflows to South Africa since 1994 were compared against the identified determinants of FDI, as well as with FDI inflows into two other major mining economies, Chile and Botswana. The friendliness of the government towards business was identified as a significant determinant of FDI inflows and the importance of this factor in explaining FDI inflows into environment in South Africa was looked at in more depth. It was found that many investors perceive the South African government as hostile towards business and as corrupt and/or inefficient. The empirical results show that this negative perception helps explain the FDI inflows attracted by South Africa since 1994. Therefore, increased friendliness to business by the government should increase future inward FDI flows into South Africa.

This thesis analyses conflicts in the role of business as a social partner in the South African economy by studying skills development in the Border-Kei Region. Skills development is a key component of the South African government’s programme of labour market regulation and is founded on a participatory approach. The skills development framework requires the participation and co-operation of multiple social partners but relies heavily on the role of business in the attainment of national and sectoral skills development objectives. Unfortunately, however, there are significant conflicts in the role which business is expected to play which consequently hinder the efficiency of the framework and the likelihood that that these objectives will be realised. One of the most pertinent examples of these conflicts is the voluntary nature of the skills development framework, which incentivises but does not compel organisations to invest in training and development. Other conflicts include dissonances between national and employer led strategies and organisational disincentives to engage in training and development. This qualitative study uses an interpretive approach to study how and to what extent the Skills Development Act is implemented in selected organisations in Buffalo City as well as studying the issues pertaining to the implementation process. By using a purposive sampling approach, this research includes both primary data in the form of semi-structured interviews and secondary data in the form of documentary sources. The data represents the perspectives of business, labour and government and provides significant depth of insight into the discussions and issues surrounding skills development in Buffalo City. This dissertation argues that South Africa’s vocational training system, institutionalised through appropriate legislation, may not be sufficient to mobilise social partners, and of primary concern in this research – business – to invest in skills development. It suggests that extensive reliance on business is an insufficient way in which to upskill the labour market. However, with few alternatives to this approach, it is subsequently essential that business is encouraged to buy into the collective interest of skills development objectives. This primarily entails overcoming the challenges that embody the framework and increasing state emphasis on skills development.

This study critically analyzed land redistribution and economic empowerment of farm workers in the Stellenbosch agricultural area. Past socio-economic and political policies have resulted in a racially skewed and inequitable distribution of land as well as overcrowding, overstocking and poverty in the countryside. It has become imperative that fundamental change is brought about in order to improve economical opportunities of all South Africans to access land for beneficial and productive use. Land reform, as the central thrust of land policy, is not only part of the effort towards the creation of equitable land distribution, but also of national reconciliation and stability. This study analyzed the notion of economic empowerment of farm workers. It looked at historical overview of the evolution of politics in South Africa and contemporary legislative framework pertaining to land redistribution and farm workers in the Western Cape. A case study of Bouwland farm in the Stellenbosch agricultural area was used as an example of how land redistribution can contribute to economically empower farm workers.

Job creation and poverty eradication have been the top priority of the South African government over the past few years and continues to be on the agenda. The government is making numerous efforts to aggressively address poverty levels and create jobs. In 1994 the African National Congress (ANC) led government inherited an economy that had glaring disparities. Most of the important economic resources of the country are concentrated in urban areas, while very few economic activities and resources are found in the rural areas. While about 70% of the country’s poorest people live in rural areas, the abundance of economic resources in towns and cities has led to minimal growth taking place in rural areas. High poverty levels continue to manifest itself in various forms and shapes in communities. The negative effects of unemployment continue to threaten our societal well-being and stability. It is evident that in poverty stricken communities there are limited economic development opportunities and have thus become trapped in a poverty cycle, and economic growth is the only sustainable approach of addressing poverty and unemployment. Local economic development (LED) is but one intervention that could be used to create jobs and eradicate poverty at a given locality. LED has been regarded as an approach towards economic development and growth whereby local people are encouraged to work in collaboration in order to achieve sustainable economic growth, bringing economic benefits and improved quality of life for all community members in a municipal area. LED is an intervention solely based at a local level being driven by local people to realise economic benefits that would improve their quality of life. A qualitative study was conducted at Alfred Nzo District Municipality to assess the contribution of LED on job creation and poverty eradication. The target population included LED managers, Project Practitioners, LED Project Beneficiaries, LED Portfolio Councillors in the Alfred Nzo District Municipality and its Local Municipalities as well as relevant sector departments and Public Entities. The study examined the contribution of LED funded projects in job creation and poverty eradication. The project also assessed the problems, issues and challenges in LED and how they are being addressed. The study found that the implementation of LED in Alfred Nzo continues to be ineffective and confronted with numerous challenges. LED has been viewed as one of the tools for job creation targeted at unskilled and unemployed members of the community. Municipalities seem to be under utilising the Municipal Infrastructure Grant (MIG) and Equitable Share for funding the LED programme. In most municipalities LED is still regarded as an unfunded mandate. Most municipalities rely heavily on grant funding from sector departments and state owned enterprises for LED. A point of concern is the lack of regular and structured discussions on LED issues within municipalities which continue to re-enforce uncoordinated planning, insufficient budgeting and poor implementation of programmes within the municipality. The study noted serious skills shortages within the project beneficiaries which hamper effective implementation of LED projects. These skills include financial management, project management, conflict resolution and business management. These are core skills for the sound and viability of management of LED projects. Access to markets has been raised as an on-going concern for LED practitioners. It is recommended that a change is made from project-based LED to a business-based approach in LED. This would require all LED projects to be registered business entities, be liable for tax and require them to produce sound business plans before receiving grant funding.