Abstract

The South African economy is characterized by extreme income disparity along racial lines. Many blacks are unemployed and poor, while most whites are better off. This uneven distribution of wealth is the direct result of the apartheid system that was followed by the government between 1948 and 1994. The case chronicles the state of the South African economy from the 1950s, when many apartheid laws were passed, till the mid-2000s, when the economy was showing good growth. It discusses some of the policy initiatives taken by the ANC government after coming to power in 1994 and the implications of these policies for the South African economy. It also discusses the criticisms against the government’s policies. The case ends with a discussion on the future prospects of the South African economy.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Learn more about the apartheid system that was practiced in South Africa and the effects of the system on the country’s economy
• Learn more about the problem of economic disparity between population groups in South Africa
• Understand the significance of governmental policy initiatives and their effect on an economy
• Critically analyze the various policy initiatives taken by the South African government to address the economic disparities
• and Evaluate the future prospects of the South African economy.

Keywords

South African economy, Income disparities, Macroeconomic policy, Apartheid, Reconstruction and Development Programme, Growth, Employment and Redistribution Policy, Inflation, Government policy