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Today, the global youth population is at its highest ever and still growing, with the highest proportion of youth living in Africa and Asia, and a majority of them in rural areas. Young people in rural areas face the double challenge of age-specific vulnerabilities and underdevelopment of rural areas. While agriculture absorbs the majority of rural workers in developing countries, low pay and poor working conditions make it difficult to sustain rural livelihoods. Potential job opportunities for rural youth exist in agriculture and along the agri-food value chain, however. Growing populations, urbanisation and rising incomes of the working class are increasing demand for more diverse and higher value added agricultural and food products in Africa and developing Asia. This demand will create a need for off-farm labour, especially in agribusinesses, which tends to be better paid and located in rural areas and secondary towns. It could boost job creation in the food economy provided that local food systems were mobilised to take up the challenge of higher and changing domestic demand for food.

Under Action 14, countries have committed to implement a minimum standard to strengthen the effectiveness and efficiency of the mutual agreement procedure (MAP). The MAP is included in Article 25 of the OECD Model Tax Convention and commits countries to endeavour to resolve disputes related to the interpretation and application of tax treaties. The Action 14 Minimum Standard has been translated into specific terms of reference and a methodology for the peer review and monitoring process. The peer review process is conducted in two stages. Stage 1 assesses countries against the terms of reference of the minimum standard according to an agreed schedule of review. Stage 2 focuses on monitoring the follow-up of any recommendations resulting from jurisdictions' stage 1 peer review report. This report reflects the outcome of the stage 2 peer monitoring of the implementation of the Action 14 Minimum Standard by South Africa.

This publication contains the 2021 Second Round Peer Review Report on the Exchange of Information on Request of South Africa. It refers to Phase 1 only (Legal and Regulatory Framework).

Informal employment, defined through the lack of employment-based social protection, constitutes the bulk of employment in developing countries, and entails a level of vulnerability to poverty and other risks that are borne by all who are dependent on informal work income. Results from the Key Indicators of Informality based on Individuals and their Households database (KIIbIH) show that a disproportionately large number of middle‑class informal economy workers receive remittances. Such results confirm that risk management strategies, such as migration, play a part in minimising the potential risks of informal work for middle‑class informal households who may not be eligible to social assistance. They further suggest that middle‑class informal workers may have a solvent demand for social insurance so that, if informality-robust social insurance schemes were made available to them, remittances could potentially be channelled to finance the extension of social insurance to the informal economy.

Blockchain is mainstreaming, but the number of blockchain for development use-cases with proven success beyond the pilot stage remain relatively few. This paper outlines key blockchain concepts and implications in order to help policymakers reach realistic conclusions when considering its use. The paper surveys the broad landscape of blockchain for development to identify where the technology can optimise development impact and minimise harm. It subsequently critically examines four successful applications, including the World Food Programme’s Building Blocks, Oxfam’s UnBlocked Cash project, KfW’s TruBudget and Seso Global. As part of the on-going work co-ordinated by the OECD’s Blockchain Policy Centre, this paper asserts that post-COVID-19, Development Assistance Committee (DAC) donors and their development partners have a unique opportunity to shape blockchain’s implementation.

In 2018, the city of Cape Town, South Africa, was close to the 'Day Zero', requiring all taps to be shut off and citizens to fetch a daily 25 litre per person. Though the day-zero was avoided, it is estimated that, at the current rate, South Africa will experience a 17% water deficit by 2030 if no action is taken to respond to existing trends. Lessons learned during that drought crisis have been valuable for the city to manage the short-term COVID-19 implications and design long-term solutions towards greater water resilience. As a result of a multi-stakeholder policy dialogue involving 100+ stakeholders from the city of Cape Town and South Africa, this report assesses key water risks and governance challenges in Cape Town, and provides policy recommendations towards more effective, efficient and inclusive water management building on the OECD Principles on Water Governance. In particular, the report calls for strengthening integrated basin governance, transparency, integrity, stakeholder engagement, capacities at all levels of government, financial sustainability and for advancing the water allocation reform to better manage trade-offs across multiple users.

The COVID-19 crisis has had a profound impact on SME access to finance. In particular, the sudden drop in revenues created acute liquidity shortages, threatening the survival of many viable businesses. The report documents an increase in demand for bank lending in the first half of 2020, and a steady supply of credit thanks to government interventions. On the other hand, other sources of finance declined, in particular early-stage equity. This paper, a special edition of Financing SMEs and Entrepreneurs, focuses on the impacts of COVID-19 on SME access to finance, along with government policy responses. It reveals that the pre-crisis financing environment was broadly favourable for SMEs and entrepreneurs, who benefited from low interest rates, loose credit standards and an increasingly diverse offer of financing instruments. It documents the unprecedented scope and scale of the policy responses undertaken by governments world-wide, and details their key characteristics, and outlines the principal issues and policy challenges for the next phases of the pandemic, such as the over-indebtedness of SMEs and the need to continue to foster a diverse range of financing instruments for SMEs.

South Africa has turned towards tourism development to jump-start its weak economy. As tourism is a labour intensive sector that can also bring foreign currency into the country, the sector was identified as priority area by the South African government. Indeed, a doubling in international tourist arrivals from 1995 to 2017 was accompanied by a tripling of employment directly related to tourism. Despite South Africa’s rich and diverse natural and cultural assets, tourism development has been challenged by the country’s geographic location and perceived safety and security issues. As the country is a long-haul destination for many large source markets, good accessibility and international openness is key to expand international tourism, but current visa regulations put an administrative burden on potential tourists. While increasing tourist arrivals are necessary for tourism development, tourism growth has to be well planned and managed to be sustainable. Although the recent coronavirus (COVID-19) pandemic and resulting containment measures have hit the economy and in particular tourism, the sector has good potential to support the South African economy and contribute to employment growth post-COVID-19. Tourism provides job opportunities for different skills and experience levels allowing for greater social integration. For tourism development to translate into inclusive growth, the tourism industry needs to be integrated into the local economy and the benefits of tourism must spread geographically to also create economic opportunities in less travelled and less prosperous regions.

South Africa has an incomplete social protection system without a mandatory pension savings scheme. Designing a universal insurance pension system would allow to reduce the important government funded pension grant system and ensure that the old-age population has decent income. Only 40% of employees are contributing to a form of saving-retirement scheme, with often a low pension. Moreover, South Africa has a dual, public and private, health care system. Half of the country’s health-care spending goes to the private sector, which covers only 16% of the population. Moreover, the health care system fails to deliver affordable quality services. The COVID-19 pandemic has highlighted the unequal distribution of health care services between public and private health providers. Around 70% of critical care beds available were in the private health care sector. Finally, the sizeable unconditional cash transfer system though reaching a large share of the population fail to lift many children in the poorest families above the poverty line.

Theoretical and empirical studies on multi-product firms have shown that firms adjust their product mix in response to trade liberalisation. This paper uses the South African Revenue Service (SARS) and National Treasury (NT) firm-level panel to assess the response of South African firms to trade policy changes and demand shocks in destination markets between 2010 and 2016. This paper shows that South African multi-product manufacturers shift their exports towards their core products when competition intensifies in their export destinations and that these dynamics lead to productivity gains at the firm level. Also, trade liberalisation policies in the destination country positively affect the number of exported goods (extensive margin) as well as the average value of already exported products (intensive margin) for multi-product exporters, whereas restrictive measures negatively affect the extensive margin. Regarding trade policy measures, results suggest that tariff liberalisation only amplifies the adjustment of South African exporters if tariff cuts affect South African firms directly, while tariff cuts benefitting other foreign competitors mitigate within firm adjustments. By contrast, the reduction of Non-Tariff Measures (NTMs) always positively affects South African exporters.