Fallon, PeterPereira de Silva, Luiz A.2012-08-132012-08-131994-07https://hdl.handle.net/10986/10014South Africa has begun a new phase in its history. This article reports on a study examining the challenge of promoting equitable and fiscally sustainable growth, and evaluating alternative paths to growth using an econometric model developed by World Bank staff. The broad conclusion is that there needs to be greater complementarity between stimulating the economy through public investment and reviving private investment if South Africa is to achieve a sustainable growth. The prospects of success will be improved considerably if skills are upgraded and a reorientation towards exports is achieved, accompanied by a restructuring of public expenditure - within fiscally sustainable limits - for targeting the poor. The scenarios examined assume that political stability is achieved and that access to international capital markets improves.CC BY 3.0 IGOECONOMIC GROWTHECONOMETRIC MODELSPUBLIC INVESTMENTSPRIVATE INVESTMENTSEXPORT PROMOTIONSKILLED WORKERSPUBLIC EXPENDITURESPOVERTY MITIGATIONPOLITICAL STABILITYINTERNATIONAL CAPITAL MARKETSEMPLOYMENTTRADE POLICYLABOR MARKETS AGGREGATE DEMANDAGRICULTUREBALANCE OF PAYMENTSBASIC EDUCATIONCAPITAL STOCKDEBTDEVELOPED COUNTRIESDISPOSABLE INCOMEECONOMIC EFFECTSECONOMIC GROWTHECONOMIC IMPACTECONOMIC PERFORMANCEECONOMIC POLICIESECONOMIC PROBLEMSELECTRICITY GENERATIONEMPLOYMENT GROWTHEXCHANGE RATEEXOGENOUS FACTORSEXPORTSFOREIGN EXCHANGEFOREIGN INVESTMENTFUELSGDPGOVERNMENT EXPENDITUREGROSS DOMESTIC PRODUCTGROWTH PATHHIGH GROWTHIMPORT DUTIESIMPORTSINCOMEINCOME DIFFERENTIALSINCREASED INVESTMENTINFLATIONINTEREST RATESINTERMEDIATE GOODSINVESTMENTINVESTMENT LEVELSLABOR FORCELABOR MARKETLABOR SUPPLYLABOR SUPPLY GROWTHLONG RUNLOW INTEREST RATESMACROECONOMIC MODELMONETARY POLICIESPER CAPITA GROWTHPOLICIESPOLITICAL STABILITYPRIVATE INVESTMENTPRIVATE SECTORPRODUCTIVITYPRODUCTIVITY GROWTHPUBLIC EXPENDITUREPUBLIC EXPENDITURESPUBLIC INVESTMENTPUBLIC SECTORPUBLIC SERVICESPUBLIC SPENDINGRAPID GROWTHREAL GDPRECESSIONREDISTRIBUTIVE POLICIESREGULATORY FRAMEWORKSAVINGSSKILLED LABORSKILLED WORKERSSOCIAL STABILITYSOCIAL TENSIONSSUSTAINABLE GROWTHTOTAL FACTOR PRODUCTIVITYTOTAL FACTOR PRODUCTIVITY GROWTHUNEMPLOYMENTWAGESWorld Bank10.1596/10014