South Africa’s income levels lag behind global standards

Income levels in most developing and emerging countries will not catch up with advanced economies for many decades without efforts to boost productivity, according to a new report by the Organisation for Economic Co-operation and Development (OECD) Development Centre.

The Perspectives on Global Development 2014  report shows that while China, Kazakhstan and Panama are on track to reach OECD levels of average income by 2050, a number of middle-income countries - including Brazil, Colombia, Hungary, Mexico and South Africa - will take much longer at current growth rates.

Labour productivity in most developing and emerging countries is well below half the level of OECD countries, the report shows. Diversification into higher value-added areas in agriculture, manufacturing and services, along with economic reforms and a greater focus on innovation, could help remedy this.

“Many of the upper middle-income countries we expected would be catching up with advanced economies by the middle of the century will not do so at today’s growth rates,” said OECD secretary-general Angel Gurría. “Boosting productivity would help enhance growth and narrow the gap in living standards relative to the advanced economies more quickly.