Nora Lustig

Position: Professor, Latin American Economics and Director, Commitment to Equity Institute

Institution: Tulane University

Nora Lustig is Samuel Z. Stone Professor of Latin American Economics and Director of the Commitment to Equity Institute (CEQI) at Tulane University. She is also a Nonresident Fellow at the Center for Global Development and the Inter-American Dialogue. Her current research focuses on assessing the impact of taxation and social spending on inequality and poverty in developing countries and on the determinants of income distribution in Latin America. Prof. Lustig is a co-principal investigator of the project ‘Inequality in the Giants’. She serves on the Atkinson Commission on Poverty and on the Stiglitz et al. Commission on Measuring Economic Performance and Social Progress. She received her doctorate in Economics from the University of California, Berkeley.

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How much is inequality reduced by progressive taxation and government spending?

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Editor's Corner

What windows could BRICS open?

This year, South Africa takes over from China as the chair of BRICS grouping of countries (Brazil, Russia, India, China, and South Africa). What new opportunities for trade and development does this offer?

Although BRICS is, in the main, a political grouping rather than an economic or trade bloc, it nonetheless provides important opportunities to advance a country’s economic and trade interests, as agricultural economist, Wandile Sihlobo points out in this edition of Econ3x3.

Sihlobo explores the role that South African agriculture and agribusiness lobbies can play working through the SA BRICS Business Council. Specifically, he points out that our share of agricultural trade to the other BRICS countries is pretty small in relative terms - an average of 8% over the past 10 years in total agricultural exports of US$9,9 billion. China, the leading market, accounts for just 5% of total SA agricultural exports, while Russia accounts for just 2%. Of course, Russia’s war with Ukraine and the consequent instability may threaten even these exports. Brazil and India are negligible importers of SA agricultural goods, he writes.

It is also difficult for products such as South African wine to compete in the Chinese market as producers face import duties as high as 14%, compared with other major wine producers such as Australia and Chile, which face no tariffs. But then these countries have bilateral trade agreements with China. South Africa’s chairmanship of BRICS now provides an opportunity for the country to lobby for better access to those markets.

But it is also prudent to consider possible trade-offs other countries may want in return for better access to agricultural goods, such as in manufactured goods. This may affect the country’s localisation strategy.

Nonetheless, Sihlobo argues, there may be windows of opportunity to negotiate commodity-specific protocols with other BRICS partners, all of whom (except for South Africa) have large populations and solid economic growth prospects, equating to sustainable markets.

Of course, the country should not neglect its traditional and lucrative agricultural markets for instance in the EU and the African continent. The instability of one of the key BRICS partners at war will clearly be a negative factor but nonetheless, the SA BRICS Business Council would be wise to use this opportunity to expand trade in order to promote growth and better employment prospects at home.

In the last edition of Econ3x3, we published some unexpected good news around educational progress. Education, argued Martin Gustafsson of the Research on Socio-Economic Policy unit (ReSEP) at Stellenbosch University, is improving at a more consistent rate than we think. But because progress is slow, it often goes unnoticed.

Although basic reading and numeracy skills of South Africa’s learners are “strikingly low”, the country has been “improving at a speed that is rapid by international standards,” notwithstanding the devastating effects on education of the pandemic and lockdown.

Gustafsson explains why it is so hard to convey this message. One reason is that the focus on matric results often overshadows other measurements. But more pertinently, he argues that exams are poor indicators of educational progress.

System-wide progress, when it occurs, is “painfully slow”. But this is precisely why we need rigorous means of measurement.

Careful measurement – even of slow progress - matters because it should be an indispensable tool for policymakers and educationists. If no improvement is detectable, it could lead them to make unnecessary and disruptive changes such as changing the curriculum.

Education authorities need to pay careful attention to how progress is measured. Slow and steady steps are often ignored, but if we are serious about improving the quality of education, we need to focus on what works.

Pippa Green, March 15, 2023

Working Papers from the REDI3x3 project are available HERE

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What windows could BRICS open?

READ, WRITE & REASON

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