The Significance of Physical Infrastructure in Economic Growth: Maputo Development Corridor LESEGO LETSILE BSc Honours in Urban and Regional Planning 2014 i The Significance of Physical Infrastructure in Economic Growth: Maputo Development Corridor By LESEGO LETSILE Submitted in partial fulfilment for the degree of Bachelor of Science with Honours in Urban and Regional Planning in the School of Architecture and Planning, Faculty of Engineering and the Built Environment at the University of the Witwatersrand, Johannesburg. ii DECLARATION I declare that unless otherwise indicated in the text, this research report is my own unaided work, and has not been submitted before for any degree or examination to any other university. …………………………………………………………….. Lesego Letsile 22 October 2014 iii To my family and friends iv ACKNOWLEDGEMENTS I would first like to thank God almighty for giving me the strength and perseverance to complete this document. I would also like to thank my mother, Rose Kgomotso Letsile, for her constant support and being a blessing in my life. I would also like to thank my family and friends for their support. I also wish to thank my supervisor, Professor Alison Todes, for her guidance and patience throughout the year. Professor Todes has encouraged me during the most difficult times and her insightful comments have contributed to my ability to enhance the quality of my research. v Contents ACKNOWLEDGEMENTS.......................................................................................................... v List of tables ......................................................................................................................................... viii List of figures ........................................................................................................................................ viii Chapter 1: Introduction .......................................................................................................................... 1 1.1. Introduction ............................................................................................................................. 1 1.2. Context .................................................................................................................................... 2 1.3. The effects of infrastructure in economic growth ................................................................... 3 1.4. Problem statement ................................................................................................................... 4 1.5. Research question ................................................................................................................... 4 1.5.1. Research sub-questions ................................................................................................... 5 1.6. Methodology ........................................................................................................................... 5 1.6.1. Economic indicators ........................................................................................................ 5 1.6.2 Social indicators ..................................................................................................................... 6 1.7. Chapter outline ........................................................................................................................ 6 1.7.1. Chapter 2 ......................................................................................................................... 6 1.7.2. Chapter 3 ......................................................................................................................... 6 1.7.3. Chapter 4 ............................................................................................................................... 7 1.7.3. Chapter 5 ......................................................................................................................... 7 1.7.4. Chapter 6 ......................................................................................................................... 7 1.7.5. Chapter 7 ......................................................................................................................... 7 Chapter 2: The relationship between infrastructure and growth ............................................................. 8 2.1. Introduction ................................................................................................................................ 8 2.2. The role of infrastructure in economic growth ....................................................................... 8 2.2. The impact of infrastructure in economic growth in India, China and South Africa ....... 16 2.3. Critiques ..................................................................................................................................... 23 2.4. Conclusion ................................................................................................................................. 24 Chapter 3: The Maputo Development Corridor .................................................................................... 26 3.1. Introduction ................................................................................................................................ 26 3.2. Overview of the MDC ............................................................................................................... 26 3.3.3. Critiques .................................................................................................................................. 33 3.3. The Maputo Development Corridor (MDC) .............................................................................. 34 3.3.1. Main infrastructure projects ................................................................................................ 34 3.3.2. The main Economic Development projects ........................................................................ 36 vi 3.4. Conclusion ................................................................................................................................. 38 Chapter 4: Profile of the selected municipalities .................................................................................. 38 4.1. Introduction ................................................................................................................................ 39 4.2. Population .................................................................................................................................. 42 4.3. Governance ................................................................................................................................ 44 Chapter 5: Change and evolution of key sectors and indicators for the economic sector in Maputo Development Corridor .......................................................................................................................... 48 5.1. Introduction ................................................................................................................................ 48 5.2. Employment ............................................................................................................................... 48 5.3. Growth performance index (GPI) for total formal and informal employment .......................... 58 5.4. Gross Value Added .................................................................................................................... 60 5.5. Growth Performance index (GPI) for GVA ................................................................................. 70 5.6. Social indicators ......................................................................................................................... 72 5.6.1 Human Development Index ................................................................................................. 72 5.6.2 Household expenditure ........................................................................................................ 73 5.6.3. Disposable income .............................................................................................................. 75 5.7. Conclusion ................................................................................................................................. 78 Chapter 6: Analysis ............................................................................................................................... 79 6.1. Introduction ................................................................................................................................ 79 6.2. How has economic growth and employment improved in the municipalities along the corridor since the commencement of the project? .......................................................................................... 80 6.2.1. Economic indicators ................................................................................................................ 80 6.3. How has the quality of life improved along the corridor? ......................................................... 82 6.3.1 The social indicators ............................................................................................................ 82 6.4. Conclusion ................................................................................................................................. 83 Chapter 7: conclusion ..........................................................................................................................