The South African Economy: Coping with the Legacy of Apartheid
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Case Code: ECON018 Case Length: 19 Pages Period: 1994-2007 Pub Date: 2007 Teaching Note: Not Available |
Price: Rs.300 Organization : - Industry : - Countries : South Africa Themes: Corporate Social Responsibility |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
The South African Economy in the Apartheid Era
Apartheid was a system of racial segregation. The NP government devised apartheid as a means for the white minority to control the economic and social system of South Africa. In the apartheid era, the government excluded the blacks from the mainstream economy, with development efforts largely concentrated on the whites. The early 1950s saw a spate of repressive laws being passed. Among them, the Population Registration Act (calling for the classification of the population on the basis of race), the Group Areas Act (leading to the creation of separate residential areas for each race), the Bantu Building Workers Act (resulting in blacks being prohibited from performing skilled work in urban areas excepting designated sections), Prevention of Illegal Squatting Act (removing blacks from public and private lands and establishment of resettlement camps), Pass Laws (restricting the movement of blacks), and the Reservation of Separate Amenities Act (prohibiting non-whites from using public amenities such as buses, beaches, post offices, restrooms, etc., meant for whites) resulted in the complete subjugation of non-whites...
The Economy in the Post-Apartheid Era
In 1994, the ANC was elected to power. With political control going out of the hands of the white minority, the deprived sections of the population were hopeful that their problems would finally start being addressed. The government was faced with huge disparities in income and living conditions between the population groups...
The Policy Initiatives
In 1994, the government introduced the Reconstruction and Development Programme (RDP), which primarily aimed to reduce poverty and improve the living conditions of the poor. "Attacking poverty and deprivation will be the first priority of the democratic Government" - declared the white paper on RDP. The document added - "Our income distribution is racially distorted and ranks as one of the most unequal in the world. Women are still subject to innumerable forms of discrimination and bias. Rural people are marginalized. Throughout, a combination of lavish wealth and abject poverty characterizes our society."...
Subsequent Policy Initiatives
By 2000, the government was able to achieve many of the goals set under the RDP (Refer Exhibit VII for achievements of the RDP between 1994 and 2000); however, unemployment and poverty continued to remain high and threatened to negate the progress made. While a majority of whites continued to live in prosperity, a large section of the blacks continued to live below the poverty line. In fact, in 2001, it was estimated that 57% of blacks in South Africa lived below the poverty line, while only 2.1% of whites were poor. In other words, the economic disparities had not lessened significantly from the apartheid era.
A Finance Ministry budget review document, released along with the 2000-01 budget in February stated - "South Africa remains one of the most unequal countries in the world, with the poorest 40 per cent of households still living below the minimum household subsistence level."..
Outlook
South Africa was a unique country in many ways. While some regions in the country had infrastructure and prosperity levels comparable to developed countries, other regions were worse off than the least developed countries. There were extreme disparities in income and wealth among the race groups, as a consequence of the apartheid system. However, even thirteen years after the death of apartheid, these disparities remained as glaring as ever. Though in 2005 and 2006, South Africa's economy grew by around 5%, poverty and unemployment rates were still at high levels...
Exhibits
Exhibit I: Information on South Africa
Exhibit II: The Aims and Objectives of the ANC
Exhibit III: A Comparison of the Status of Blacks and Whites under Apartheid in 1978
Exhibit IV: Socio-Economic Objectives under the RDP
Exhibit V: South Africa: Main Economic Indicators (1995-2000)
Exhibit VI: A Comparison of Incomes (in 2001)
Exhibit VII: RDP Achievements between 1994 and 2000
Exhibit VIII: Economic Indicators in the 2000s
Exhibit IX: GINI Coefficients for South Africa and Brazil, 1995-2002
Exhibit X: Ranking of Countries on the Basis of Number of People Living with HIV/AIDS
Exhibit XI: Murders
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