South Africa Macroeconomic/Financial Profile
Any attempt at explaining recent South African economic history must begin with a discussion of apartheid. Beginning around the middle of the 20th century and ending in 1990, the ruling government of the National Party (NP) engaged in the systematic oppression of non-white South Africans, in what became known as the apartheid system. To understand the net economic consequences of apartheid, consider the graph in the lower right hand corner of Figure 1 which shows real GDP per capita in constant PPP US dollars from 1980 until 2008. Looking at the graph, we see that, despite a few infrequent growth spurts, the South African economy generally suffered negative growth in per capita income between 1980 and 1993.
A 1997 Economist Intelligence Unit (EIU) report gives one possible explanation for this trend. From the mid-1970s until the early 1990s, the South African economy suffered a nearly continuous decline in domestic investment. This fact, coupled with fiscally conservative government policies, forced the economy to increasingly rely on private consumption to propel growth. However, private consumption was unable to do so because of high interest rates, high levels of personal debt, and negligible employment growth.
Although true, the above explanation does not discuss the the root cause of South Africa’s economic struggle during this period, i.e. apartheid. In the mid-1980s, growing international opposition to apartheid led to the involvement of the United States, among other countries, in a disinvestment campaign against South Africa (Knight 1990). United States participation included the passing of the Comprehensive Anti-Apartheid Act in 1986, which limited investm...
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...for unemployment, according to a 2008 EIU report, recent growth in the manufacturing and service sectors have increased demand for skilled workers, while declines in agriculture and mining have decreased demand for unskilled this labor. As a result South Africa is left with a large amount of unskilled labor.
As I have shown above, South Africa’s economic performance over the last few decades can largely be explained in the context of South Africa’s political transition out of apartheid. In the years following the end of apartheid, the ANC’s reform policies have largely been successful in stimulating economic growth, promoting stability, and overseeing the transformation of the South African economy from a traditionally mining and agriculture oriented economy to a modern economy, in which manufacturing and financial services contribute a greater share of GDP.
South Africa was positively affected in the way that before the Dutch and British, South Africa had been split up into many different tribes, who though they were free were not united. Through the centuries of hardship South Africa came out of apartheid very strong and the ANC has maintained a popularity of 60% popularity for all the elections since 1994. Economically South Africa has blossomed and is the 2nd largest economy in all of Africa and has managed to triple its GDP even though it has been less than 30 years since it has left apartheid, established democracy and freed itself from many international sanctions. South Africa’s economy still has many issues though for it is still an underdeveloped country which suffers from lack of education, employment, and crime. Socially South Africa remains strong as it is united under one goal of making its nation once again great, and it has maintained its heritage and culture. In fact, a quick look at a South African site will show many articles and memorials, of days in the past remembering the struggle for freedom. Politically, South Africa has remained strong and united with the ANC still carrying the vast majority of the votes and uses a governmental system quite similar to ours with a separation of powers and a thriving democratic system. Luckily, political diversity has also started to appear with many other groups appearing making the most out of South Africa’s democracy and all of which pledge freedom and are led by native
To understand how South Africa changed, one must know the history of Apartheid and the effects it had on the country. Apartheid was a form segregation enforced by law in South Africa. The system was in effect from 1948 to 1993. During this time the majority black and other non-white population was unfairly discriminated against. Segregation in South Africa started during the country's colonial period. Apartheid began as a political movement after the elections in 1948. The government began writing laws that put the population in different racial groups. Since 1970, members of the black population had it's citizenship taken away, by the new written laws. They were put categorized into many different tribal groups that governed themselves. The tribes were called bantustans. [1]
The apartheid system began as a way to control non-white indigenous Africans and maintaining a sense of superiority. Yet with time, the system began to hinder the development of South Africa leading toward modifications of the system. The system was changed to accommodate the United Nation’s anti-apartheid views in 1959 by offering technical assistance and trading to the states. Then
The annual spend of the South Africa’s black middle class has since risen to over R400-billion per annum compared to their white middle class counterparts whose spending power is estimated at R380 billion. Disposable household income has increased by 35% for the black middle class, since 2004, and will continue to grow in years to come. UCT Unilever Institute. (2007).
Petersson, Lennart. Post-Apartheid Southern Africa: Economic Challenges and Policies for the Future: Proceedings of the 16th Arne Ryde Symposium, 23-24 August 1996, Lund, Sweden. New York City: Routledge, 1998.
National Party of South Africa came to power through the election in 1984. It started the racial segregation, especially in the case of industrial wealth. While South Africa’s white minority had the highest living standards in Africa, which was the same as the standards of living in the Western world have had, the majority of black people in terms of any standards including income, education, and even entering government off...
Harris, L. 1991. The Mixed economy of a democratic South Africa. Investment Analysts Journal: 32-41.
... could not afford even clothing. Godimer and Walker have noted the poor economic condition in South Africa during the period of apartheid. The poor education and job reservations where affluent jobs were reserved for the white crippled the efforts of majority of the black people from progressing and improving.
Young, A. (2013). Four things nelson ‘madiba’ mandela did that helped revive the south africa economy, which had been battered by apartheid sanctions. Unpublished raw data, . Retrieved from http://www.ibtimes.com/four-things-nelson-madiba-mandela-did-helped-revive-south-africa-economy-which-had-been-battered
South Africa really began to suffer when apartheid was written into the law. Apartheid was first introduced in the 1948 election that the Afrikaner National Party won. The plan was to take the already existing segregation and expand it (Wright, 60). Apartheid was a system that segregated South Africa’s population racially and considered non-whites inferior (“History of South Africa in the apartheid era”). Apartheid was designed to make it legal for Europeans to dominate economics and politics (“History of South Africa in the apartheid era”).
South Africa is known to be successful after the Apartheid but it really wasn’t. The South African Revolution also known as the time of the Apartheid took place during 1908-1994. It was a long struggle for the Africans, which included riots, protests, segregation and physical pain. During the period of the Apartheid, blacks were not treated with equal respect to the whites. They weren’t allowed to vote, hold office and the children couldn’t go to school with whites. It was a horrific time for blacks, but they were able to get through it. Blacks were fired from their jobs and given to whites. The South Africans could not even hold a job and they wouldn’t be able to earn any money to support their family. Nelson Mandela did change their government to a democracy, but that’s the only positive outcome from the Apartheid. After the Apartheid South Africa was unsuccessful socially, but it was successful from a political standpoint.
Economic development is highly dependent on the natural resources for food and energy production, which inputs to manufacturing, and to absorbing wastes and pollutants. Thus, there is a high dependency on farming. However, South Africa is not rich in agriculture resources; ...
Apartheid was considered a necessary arrangement in South Africa, as the Afrikaner National Party gained a strong majority political control of the country after the 1940’s and the economic dependence on their fertile natural resources, such as diamond and gold mines and other metals such as platinum. This required intense labor and the white dominant control over the repressed black majority allowed for an
The harmful impact of globalization on South Africa has been apparent , through the financial squeeze and through market- oriented policies that have silent economic and reorganization, in job losses, crisis in schooling, closing of hospitals, make wider loopholes in the social security net, water cut offs, the degeneration housing shortage, and unrelenting starvation and poverty in a perspective of deepening discrimination in what is already the second most disparate nation on the globe.
According to Collier & Dollar, (2001) economic growth is normally dependent on the nature and quality of economic policies that a country implements. In South Africa, soon after apartheid the government have tried to wrestle with the multiple objectives which are namely to reduce poverty, increase employment, increase international trade as well as increasing the rate of economic growth. According to Mohr et al, (2015) the macroeconomic objectives are used to assess the performance of the economy. The five macroeconomic objectives that will be discussed in this assignment are firstly the economic growth, full employment, price stability, balance of payments and equitable distribution of income. The assignment will then evaluate each of the objectives of macroeconomic growth and asses where South Africa as a country is performing on each of these respective points.