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Dr Calvin Mudzingiri
Dr Calvin Mudzingiri, Assistant Dean: Faculty of Economic and Management Sciences, University of the Free State, Qwaqwa Campus.

Opinion article by Dr Calvin Mudzingiri, Assistant Dean: Economic and Management Sciences, University of the Free State, Qwaqwa Campus 


The sudden hike of import tariffs by US President Donald Trump and his administration to countries across the world is set to reduce the volume of goods traded and affect citizen welfare across the globe. The Trump administration implemented a global 10% import tariff and a varying targeted reciprocal tariff to a host of countries, including South Africa. The reciprocal import tariff to be levied on South African export goods to the US is set at 30%. Historical data show that yearly trade between SA and US amounts to $23 billion and the US is SA’s the second biggest trading partner after China. The high tariff will reduce the competitiveness of South African export goods to American markets, leading to reduced demand of SA exports in US markets, low income to firms, job losses, low income to households and ultimately lower South African economic growth.

 

SA and US trade

South Africa exports platinum, locally assembled cars, raw aluminium, ferroalloys and agriculture products, among other goods, to the US. The implication of the US administration’s 30% tariff hike could result in job losses in the mining, automobile, agriculture and many other industries. More income losses to SA agricultural exports can also be experienced if the African Growth Opportunity Act (AGOA) expires in September 2025, if the US congressmen decide not to renew the agreement. Given the low economic growth rate in South Africa in 2024, which is estimated at 0.6%, the tariff hike by the US will exacerbate sluggish economic growth and recovery from the COVID 19 pandemic. 

Statistics also show that SA imports energy products, machinery, vehicle, industrial and other consumer goods. The goods and services SA imports from the US play a critical role in developing and sustaining local industry. SA can decide to source the goods from other markets and if this happens with all economies where tariffs were imposed, the US will be worse off. There is a possibility that economies which received a tariff hike from the US will implement a reciprocal tariff hike to the US reducing the volume of global trade. The reduced trade volumes have dire implications for job creation, income generation by firms and households, making citizens worse off.


US current trade policy

It is important to note that President Trump administration’s trade policies are premised on a trade notion synonymous to ‘mercantilism’, which was practised in Europe between the 16th to 18th centuries. Under mercantilism, an economy aims to maintain a trade surplus, the government regulate the economy, discourage imports (in the case of the US using tariff hikes) and promote growth of home industries among other initiatives. Conventional economics wisdom has proved that policies pursued by the Trump administration of protectionism are a breeding ground for trade wars. There is great potential of fellow trading partners retaliating and if that happens, global citizens will be made worse off as they will be forced to pay high prices for goods due to additional costs driven by tariff hikes. In addition, US industry relies on raw materials from other countries. If the suppliers of raw material resources retaliate, the production cost model of US firms will rise, reducing export competitiveness of US exports.

Trump’s administration is calling for firms across the world to move and produce goods in the US to avoid tariff levies. The action works against the benefits of free trade and can affect firms’ comparative advantages. The production cost structure in the US can be higher than in other countries leading to firms realising low profits if they move to the US. It is essential to note that free trade with absolutely no trade barriers will enhance the welfare of citizens at large, since goods and services will be purchased at low prices. The US government’s act of over-regulating trade can limit economic growth not only of other countries but even that of the US economy.

 

Options for the SA government

In the face of trade adversity, the SA government must not fold its hands and do nothing. It is enlightening to note that the authorities have already initiated diplomatic and trade negotiations. Negotiations can possibly focus on tariff reduction, maintaining the AGOA, and delving deep in the logic used to arrive at the 30% tariff hike. The diplomatic initiatives must encompass improving perceptions and clarity of SA policies such as the Expropriation Act which is one of the reasons cited by the US administration in ratcheting the tariff trade war.

South Africa must re-orient its trading patterns and partnerships. The aggregate world gross domestic product (GDP) is greater than the US total production for goods and services. There is need for SA to improve trade relations with other economies to broaden its trade base. The current frosty trade relationship between SA and the US presents a window to strengthen trade with the EU, Asia, BRICS plus, Africa, and any other economy willing to get into trade partnerships. SA must explore other markets where the export goods still enjoy competitiveness.

To ensure economic resilience to trade wars in the long run, SA needs to seriously invest in research and development that promote value addition of local production, enhancing local production and technology advancement that can stimulate economies of scale, which can boost competitiveness of export goods. Competitiveness can be further enhanced by improving energy production efficiency, which is a crucial input of goods and services production. Developing a powerful and skilled human capital base can lead to labour productivity efficiency, further enhancing competitiveness. SA has a dilapidated infrastructure ranging from roads, rail, buildings and industry among others. Improving the infrastructure will go a long way in improving local production, leading to creation of jobs and improved incomes for households.

Boosting local economic activity can stimulate local consumption of goods as household income improves. If the incomes of SA citizens improve, there is a potential to increase local consumption. Goods meant for export markets can end up being consumed in the domestic markets, providing a homemade solution to dwindling export goods markets. The SA government must consider developing and supporting new industries that can compete in the local and international markets. In this way, the trade challenges posed by unfriendly US administration trade policies can present opportunities to the SA economy in the long run.

News Archive

Institutional research culture a precondition for research capacity building and excellence
2004-11-16

A lecture presented by Dr. Andrew M. Kaniki at the University of the Free State Recognition Function for research excellence

16 November 2004
The Vice Chancellor, Prof. Frederick Fourie
Deputy Vice Chancellors, Deans
Awardees
Colleagues and ladies and gentlemen

It is a great pleasure to be here at the University of the Free State. I am particularly honoured to have been invited to present this lecture at the First Annual Recognition Function for Research Excellence to honour researchers who have excelled in their respective fields of expertise. I would like to sincerely thank the office of the Director of Research and Development (Professor Swanepol), and in particular Mr. Aldo Stroebel for facilitating the invitation to this celebration.

I would like to congratulate you (the UFS) for institutionalizing “celebration of research excellence”, which as I will argue in this lecture is one of the key characteristics of institutional research culture that supports research capacity building and sustains research excellence.

Allow me to also take this opportunity to congratulate the University of the Free State for clocking 100 years of existence.

Ahmed Bawa and Johan Mouton (2000) in their chapter entitled Research, in the book: Transformation in higher education: global pressures and local realities in South Africa (ed. N. Cloete et. al Pretoria: CHET. 296-333) have argued that “…the sources of productivity and competitiveness [in the knowledge society and global economy] are increasingly dependent on [quality] knowledge and information being applied to productivity”. The quality knowledge they refer to here is research output or research products and the research process, which (research) as defined by the [OECD] Frascati Manual (2002: 30) is:

“…creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of knowledge to devise new applications”

The South African Government has set itself the objective of transforming South Africa into a knowledge society that competes effectively in the global system. A knowledge society requires appropriate numbers of educated and skilled people to create quality new knowledge and to translate the knowledge in innovative ways. To this end a number of policies and strategies like the Human Resource Development [HRD] Strategy for South Africa, the National Plan for Higher Education (NPHE) and the South Africa’s Research and Development [R&D] Strategy, have highlighted human resource development and the concomitant scarce skills development as critical for wealth creation in the context of globalization. The key mission of the HRD Strategy for instance is:

To maximize the potential of the people of South Africa, through the acquisition of knowledge and skills, to work productively and competitively in order to achieve a rising quality of life for all, and to set in place an operational plan, together with the necessary institutional arrangements, to achieve this.

The R&D Strategy emphasizes that maximum effort must be exerted to train the necessary numbers of our people in all fields required for development, running and management of modern economies. Higher education institutions like the University of the Free State have a key role to play in this process, because whatever form or shape a university takes, it is expected to conduct research (quality research); teach (quality teaching – and good graduates); and contribute to the development of its community! Thus the NPHE states that the role of higher education in a knowledge-driven world is threefold:

Human resource development;

High-level skills training and

Production, acquisition and application of knowledge.

Quality research output or knowledge which as argued is critical in determining the degree of competitiveness of a country in the knowledge economy is dependent upon quality research (process). Both the process of producing quality research and its utilization cannot and does not happen in a vacuum. It requires an environment that facilitates the production of new knowledge, its utilization and renewal. It requires skilled persons that can produce new knowledge and facilitate the production of new skills for quality knowledge production. Such an environment or in essence a university must have the culture that supports research activity. Institution research culture (that is a conducive and enabling institutional research culture) is a precondition to research capacity building. Without an institutional research culture that facilitates the development and nurturing of new young researchers it is difficult, if not impossible for a university to effectively and efficiently generate new and more quality researchers. Institutional research culture is also necessary to sustain quality research and quality research output or research excellence. It facilitates the development and sustenance of the institutional and people capacities required to do research produce quality research and generally attain research excellence!

We do recognize that the patterns of information and knowledge seeking, and knowledge generation vary among field or disciplines. For example, we know that in the humanities knowledge workers often work individually, and not as collaboratively as do those of the sciences, they all however, require supportive environments – institutional research culture to achieve and sustain research excellence. An institution does not simply attain a supportive research culture, but as Patricia Clements (English Department, University of Alberta, Edmonton) in her presentation Growing a research culture argues, research culture has to be grown [and maintained]. It unifies all natural and engineering scientists; medical researchers, humanists, and social scientists.

I therefore am of the view that Institutional Research Culture is critical to research capacity building and research excellence. I therefore want to spend a few minutes looking at the characteristics of research culture. To be effective, institutional research culture has grown and sustained not only at the institutional level, but also at the faculty, school and departmental levels of any university.

What is Research Culture?

In the process of researching on institutional research culture I identified several characteristics. Many of these overlap in some way. I want to deal with some of these characteristics; some in a little more detail while others simply cursorily. In the process what we should be asking ourselves is the extent to which an institution, like the University of the Free State, and its faculties, individually and severally, is growing and or sustaining this culture.

Institutional Research Strategy: As a plan of action or guide for a course of action, the institutional research strategy must spell out research goals that a university wants to achieve. It must be a prescription of what the university needs to be done with respect to research. As a strategy it is neither an independent activity nor an end in itself, but a component part and operationalization of the university policy or mission. ( Related to this is the Establishment of Institutional research policies)

Includes and makes public the targets, e.g. achieve so many rated scientists and make sure that every year we have so many SAPSE publications. That way people keep an eye on research agendas of the university and nation.

The UFS is obviously on its way, having launched its own Research strategy (A Strategic framework for the development of research at the University of the Free Sate. August 2003). Note that this strategy refers specifically to the “Culture of research” Fig 1

A set of administrative practices to support and encourage research. Patricia Clements (English Department, University of Alberta, Edmonton) in her presentation Growing a research culture argues that that research activity and output within the her Faculty (Arts) were very low and, in spite of the numbers of staff, with no Associate Dean for Research in the Faculty as though they had accepted that research belonged to Medicine and Science and Engineering, and teaching, separated from inquiry, belonged to the Arts. With the change in the thinking about research and development of research culture, it became clear that there was a major role for research support in a faculty her size (now about 360 full time continuing academic staff). The faculty developed a support system for research and began to address the SSHRC issues.

Reduce the bureaucracy system and micromanagement of research! This however, also implies that there is capacity and policies and procedure to manage and guide research processes

Establishment of Intellectual Property regulations and assistance

Research ethics policy and safeguarding by research administration

Focused, applied and suitable nature of the delivery mode (an institution open to new methodologies for conducting research

Programmes suited both full and part-time study particularly at graduate level (Mainly at Faculty/school and department level, and depending on what’s manageable)

Hiring senior academics to engage in, teach on and supervise postgraduate students to facilitate exchange of and transfer ideas and most importantly mentorship especially in view of declining numbers of researchers in particular fields

Quality instruction and facilitation in learning about research processes

A high retention rate of students maintained by the supportive and challenging learning environment and the use of online facilities to support collaboration and in-class learning

Availability of research grants: and awareness of sourcing funds from external sources like the National Research Foundation; Water Research Commission; Medical Research Council, private philanthropies and others outside the country. For example an institution should be able to assess how much of the slice the available funds (NRF etc) its able acquire and possibly top slice from institutional budget.

Adequacy of the financial reward system to encourage university staff members to do research (General Celebration of achievement for research excellence and achievement. This ranges form Annual reports mention; celebratory dinner. At Alberta researchers were given lapels. I don’t know of any academic who do not feel a sense of achievement to get into print or recognised. Access to research facilities within and outside the institution

Provision of infrastructure to support university-based research (e.g. equipment, admin support, etc.) – but also awareness of publicly funded and available research facilities and equipment!

Internet connectivity and changes in the bandwidth of the internet to download articles

Subscription to related bodies by the library so that researcher can download articles

Facilities and resources to attend international conferences to keep one updated

Number of visiting professors/speakers targeting senior scholars and invite them to lunch to ask them to participate and to encourage their best graduate students to do so within the institution and across institutions

Research training seminars for research students including young academics

Participation of staff/students in delivering research papers to national and international conferences

Establishment of research groups to provide interaction frameworks to achieve critical mass of research-active staff

Facilitation for more research time: Targeting new scholars and giving them reduced teaching loads in their first year or two for the purpose of developing their research programs. For the purpose of helping new colleagues to see the shape of South African research support, personalizing it, and creating research community

Take research to the community and argue its necessity, and utility

And, finally celebrating excellence. We must recognize achievement - parties and public recognition for colleagues who achieve splendid things in their research.

In conclusion, I want to reemphasize that research culture has to be grown it does not simply exist in an institution. If it is grown it needs to be nourished, nurtured and sustained. An institution cannot simply leave on borrowed reputation and expect to remain research excellent. It is on this basis that instruments like the National Research Foundation rating system recognizes excellence within a given period of time and not necessarily for a life time! This it is believed encourages continued research excellence.

THANK YOU and best wishes

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