11 months ago


Building resilience Q

Building resilience Q What are the prospects for strong, sustainable balanced growth with the economies of the United States, Europe, Japan and Canada all growing steadily again? A For the first time in quite a while, we have synchronised growth among the G7 countries, which should enable a more stabilising effect on the global economy. It’s not as strong as it could be, it is not as strong as it should be, but it is strong, sustainable steady growth and threequarters per cent more than last year. I would bet that the G7 will be at least a full percentage point higher than last year. Q Is this time to move towards monetary tightening and fiscal consolidation to control escalating deficits and debt? A It is beyond time. All the countries have passed up opportunities. They must undertake actions to relax on the regulatory and structural impediment sides, which would provide them room to tighten their fiscal and monetary policies. Q What contributions and risks to global growth come from the big emerging economies? A The biggest risk that both China and India provide is a stop-go pattern of growth – not negative or zero growth, but getting off to a slow start. Both face strong challenges domestically in terms of regulatory freedom, market competition and the ability of firms to acquire money based on a profit outlook rather than a state-controlled distribution sector. Q What structural reforms are needed to revive productivity, especially given ageing populations and the digital revolution? A Labour market reforms top the list. In the United States, labour market reforms are needed as well as regulatory reform from the central government. In Europe, Leaders must commit to the regulatory structural reforms that will allow their workers a chance to earn a better wage labour markets should be the numberone priority because of rigidities in wage flexibility, job change flexibility and mobility among countries. France’s Emmanuel Macron is taking an interesting approach but the details so far are lacking, so we are unable to judge whether it will get through the legislature, what the popular reaction will be and how detailed the reforms will be. In the United Kingdom, uncertainties surrounding Brexit were large before the recent election. I don’t think the European Union will be any more flexible than it would have been before the election. France and Germany still want to extract a high penalty from the UK. Stock markets in continental Europe have experienced weaknesses that suggests those markets are more worried about that penalty than they are about the UK’s departure. Q Do you expect US President Donald Trump to come together with his colleagues at Hamburg to produce a credible action plan for growth that includes the standard language about open markets? A That’s a very interesting question, and very difficult to answer. So long as the discussions focus on regulatory reform and freeing domestic economies, Trump will be a strong supporter. To the extent the leaders talk about bilateral trade, he will be a strong supporter. He seems to be exhibiting a continued strong uncomfortableness with multilateral trade. To the extent that the communiqué looks towards a trans-Pacific or multilateral trading approach, he will not be supportive. Q How can the G20 leaders boost growth and respond to their publics’ dissatisfaction? A There is increasing discomfort with globalisation. We have not done a good job selling the benefits to our populations. There’s an imbalance between validating and affirming the gross benefits and what people see as the short- and medium-term costs. Leaders need to be cautious in how they talk about globalisation. They need to sell it in terms of what it means to workers. We haven’t focused on that. Also, leaders must commit themselves to the regulatory structural reforms that will allow their workers a chance to earn a better wage and move to jobs where they have growth opportunities instead of being stuck in ageing industries. It is interesting to see Trump talk about apprenticeship training, drawing on the German model. Some of us have talked about this for a long time. Not everyone should go to college. There are lots of skilled parts of the labour market that provide wonderful opportunities for long-term employment growth and good income. G20 leaders could also talk about labour market training at the entry level – we are not good at retraining senior middle-aged workers for new fields. But we need to do a better job of training high school and junior college leavers so they have usable skills for today’s labour market to find good-paying jobs. G20 48 G20 Germany: The Hamburg Summit • July 2017

ADVOCACY AMSCO Human capital for growth and sustainability Africa’s pharmaceutical industry grew to an estimated $20.8 billion in 2013, from just $4.7 billion in 2003. Prescription drugs are expected to grow at a compound annual rate of 6 per cent, generics at 9 per cent and medical devices at 11 per cent between 2013 and 2020. Although relatively small compared to other markets, Africa’s pharmaceutical sector is considered the fastest-growing in the world – great news for businesses and entrepreneurs looking for opportunities in developing markets. The African Management Services Company (AMSCO) supported one of the fastest-growing health and beauty chains in East Africa, Goodlife Pharmacies Limited, to achieve best practice and be a real growth story about Kenya’s booming sector. Rapid expansion A start-up business in 2014, the company grew from zero to 26 stores – 10 acquisitions and 16 new branches in 2017. With aspirations to become the largest pharmaceutical retail chain in the East Africa market, their expansion is a reality – displaying a true sense of entrepreneurship in Africa. Goodlife is a prime example of what happens when the public and private sector partner for social and economic development. In March 2015, the International Finance Corporation invested $4.5 million into the business to assist with the company’s expansion plans. In addition to mobilising the necessary financial resources, Goodlife has made an effort to acquire the requisite technical and managerial skills to support its growth strategy. A provider of human capital development solutions to private and public businesses across sub-Saharan Africa, AMSCO was instrumental in the recruitment and secondment of the company’s Chief Executive Officer, Chief Operations Officer and Retail Human Resources Manager. Leadership, training support and skills transfer were required to build the business from ground up. Goodlife is steadfast on harnessing its pharmaceutical management skills pool. This includes skills in supply chain management, A start-up business in 2014, the company grew from zero to 26 branches There are now 26 Goodlife pharmacies in East Africa entrepreneurship, financial and marketing management. Goodlife’s staff numbers have grown, from 64 in 2014 to 172 in April 2017, and the staff retention rate currently stands at 91 per cent. Goodlife’s growth is proof Africa needs innovative solutions for human capital at scale to generate growth. There’s also a need for the public sector, private sector and service providers to work together to build the continent. We cannot change Africa by doing the same things we have been doing. The continent requires a mind-set change from doing business as usual to partnership-driven capacity interventions. AMSCO works with the private sector, governments, development financiers and development agencies to achieve large-scale socio-economic transformation of Africa. MPHO KGOSIDINTSI Marketing and Communications Manager AMSCO 33 Fricker Road Illovo Boulevard Illovo, Johannesburg

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