The South African Economy: Coping with the Legacy of Apartheid
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Case Details:
Case Code : ECON018
Case Length : 19 Pages
Period : 1994-2007
Pub Date : 2007
Teaching Note :Not Available
Organization : -
Industry : -
Countries : South Africa
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"It is going to take decades to correct many of the wrongs."1
- Rev. Motlalepula Chabaku, a legislator in Free State Province.
"The general consensus is that there has not been an improvement in
equality,"2
- Matthew Stern, former economist, South Africa Country Office, World
Bank, in 2004.
Introduction
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In February 2007, Statistics South Africa3
announced that the real GDP of South Africa increased by 5.6%
(annualized) in the fourth quarter of 2006, well above market
expectations. The South African economy had been growing continuously
since 1998, making it the longest economic upswing in the country's
history. Business too was booming, with consumer demand growing at a
fast pace. The country was seeing a rapid increase in the number of
inbound tourists as well. "Having tripled the number of overseas
visitors since 1994, it (the tourism industry) is regarded as being
ready for 'a second phase of growth,'"4
said a report in the Financial Times (Refer Exhibit I for more
information on South Africa). |
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However, the impressive numbers hid some harsh realities.
Around 50% of South Africa's population continued to live below the poverty line
and the country had an unemployment rate of more than 25%. The economic
disparity between population groups in South Africa was wide and usually
manifested itself along racial lines. Analysts attributed this disparity to the
apartheid system, a race-based discrimination policy practiced by the government
between 1948 and 1994.
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South Africa held its first multi-racial election
only in 1994. The elections brought the African National Congress (ANC)
to power. The ANC government took several policy initiatives to achieve
its goal of bridging the economic gap between white and non-white
sections of the population. It initially focused on social issues, with
the launch of the Reconstruction and Development Programme (RDP).
However, in 1996, with the Growth, Employment And Redistribution (GEAR)
policy, the government decided to concentrate more on wooing foreign
investment and on encouraging trade and industry. |
The South African Economy: Coping with the Legacy of Apartheid
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