Abstract
M.A.
The objective of this study is to estimate the productivity of labour in the South
African textile industry.
This was achieved by firstly looking at the theoretical background which will
facilitate the calculation of labour productivity. The Cobb-Douglas production
function was found to be most suitable to estimate labour productivity in the
South African textile industry. Conditions necessary and sufficient for equilibrium
to hold were explored which gave an indication on efficiency in the allocation of
input factors , capital and labour. South African textile industry's performance over the years has been influenced
by the changing trade policies brought about by the Uruguay round of talks of 15
December 1993. The talks concluded that countries should reduce tariffs and
embark on export-led growth. Exporters should have free access to imported
intermediate inputs and countries should do away with anti export bias
associated with import protection. Inevitably the South African textiles industry
was affected by the conclusions drawn at the Uruguay Round of talks. The textile
industry which had enjoyed growth under high protection tariffs and other import
duties had shed down the high tariffs and liberalise trade. But the tariff reductions
had to happen over the period ranging between five and twelve years. This
further implied that export incentive schemes will have to be eliminated as they
were in contradiction with GATT Agreement so, R2 billion that the government
had budgeted for the General Export Incentive Scheme will have to be dispensed
with and according to GATT South Africa has been given three years to dispose
of the export incentive scheme.
ix
The long term strategy for the textile industry was formulated as an industrial
strategy to prepare the industry for the changing policies. The long term
objectives emphasised on achieving international competitiveness, labour
demanding growth to foster employment in the textile industry and lastly to
supply local consumers with textiles at affordable prices. But it should be noted
that trying to gain international competitiveness imply laying off workers as new
technology comes in. This is in contradiction with the Industrial strategy which
advocates for labour absorbing economic growth in the textile industry especially
in the light of the fact that employment has been on the decline over the years
and it is expected that the new industrial strategy, will be able to create more
jobs.