Closure

Since attaining democracy in 1994, South Africa has been one of the most productive countries in Africa. It’s economy has been growing at almost 5% a year for the past several years. This economic growth aids the unemployment and poverty that negatively affects all of Africa. With nearly ¼ of South Africa’s labor force currently unemployed, South Africa has implemented several programs geared towards creating and sustaining jobs within the country.   Such polices include developing infrastructure to upgrade and build railway lines, harbours, ports, and roads. Increasingly, production is becoming more globally oriented, and South Africa is branching out to foreign countries and forming integral parts of supply chains. To promote continued economic growth, South Africa relies on the free market system and plans to tear down any existing barriers to trade, especially those faced by South African exporters.  To promote sustainable growth, South Africa’s global economic strategy focuses on all of Africa and a strong developmental agenda with foreign powers.

International Trade

"Trade (2009): Exports--$71.9 billion; merchandise exports: minerals and metals, motor vehicles and parts, agricultural products. Major markets--China, U.S., Japan, Germany, U.K., Sub-Saharan Africa. Imports--$75.7 billion: machinery, transport equipment, chemicals, petroleum products, textiles, and scientific instruments. Major suppliers--China, Germany, U.S., Saudi Arabia, Japan.
GDP composition (2009): Agriculture and mining (primary sector)--7%; industry (secondary sector)--20%; services (tertiary sector)--73%. South Africa is one of the largest producers of platinum, manganese, gold, and chrome in the world; also significant coal production."
US Department of State


These facts show that South Africa is a country, rich in natural resources, that primarily imports technology based products.  South Africa relies heavily on the most developed nations in the world, including the US, China, and much of Europe. Trade links with countries in Africa are also considered vital to South Africa. The country’s economy is permanently connected to that of the southern African region, and its success is linked to the economic recovery of the continent.
 

"Since 2001, Germany has been South Africa’s largest source of imports, showing annual growth of 18.5% between 2007 and 2008. In 2008, South Africa’s biggest trade partner was the Netherlands."
Economy of South Africa

Fiscal and Monetary Policy

South Africa's monetary policy is condensed into the South African Reserve Bank (SARB).  This institution acts as the country's central bank and, according to South Africa's Constitution, is supposed to "protect the value of the currency".  The SARB attempts to combat inflation and grow the country's economy in the market system through competition and fairness.  The South African Reserve Bank determines the budget, which can come to affect production, income, and employment.

An overview of monetary policy
Fiscal policy

Inequalities in South Africa

The primary problems with inequality in South Africa involve poverty and unemployment.  A great deal of the problems in South Africa spurn from racial issues and the lingering effects of apartheid. In the more than 15 year since the end of apartheid, South Africa has made some major improvements in its government, education, housing, and health programs. But while South Africa has made reform efforts, the country still struggles to create jobs and maintain equality in its employment.  As a result, those unemployed, more than ¼ of the population, live in poverty and squalor

One United Nations Report reveals that “Blacks constitute the poorest layer of the population, making up over 90 percent of the 21.9 million poor. In seven of the nine provinces more than 50 percent of the population lives in poverty.”  South Africa shares many problems that the whole of Africa does, but despite the surprisingly high unemployment rate, South Africa is one of the most productive and wealthy nations in the whole continent.

As a measure of the income distribution, the Gini coefficient represents the inequalities between incomes. Since 1995, South Africa’s Gini coefficient has risen from .596 to .635 in 2002.  South Africa is a country where the rich are extremely wealthy and the poor live in the poorest of conditions. The income distribution between the rich and poor in South Africa is shocking. 60% of South Africa’s population earn less than $7,000 per year, whereas 2.2% of the population earn more than $50,000 per year. As the working class falls further into poverty, the rich minority seems to be accruing more and more personal wealth.

With the inequalities in wealth and employment, South Africa is a ticking time-bomb for revolution.  Such protests, like the ones occurring in the Middle East, often arise from the youth, discontent with their ability to acquire jobs and the overall trends in government.  Because South Africa's government has been proactive in reforming other areas, they need to focus on the labor sector more.  For example, loosening the rigid labor regulations that restrict firms and their ability to expand would increase the employment rate.  While these problems cannot be solved instantly, South Africa needs to be proactive to get more of the lower class working for wages.

Other Source: World Bank

Employment in South Africa

A country of nearly 50 million people, South Africa also has a surprisingly high unemployment rate of 23.3%. As of 2007, 9% of South Africa's working population was involved in agriculture.  26% work in industry, and 65% of workers are in services.  As a very productive mining country, South Africa is the world's largest producer of platinum, gold, and chromium.  Other important industries include "automobile assembly, metalworking, machinery, textiles, iron and steel, chemicals, fertilizer, [and] foodstuffs." In  2010, the composition of South Africa's GDP by sector was as follows.

agriculture: 3%

industry: 31.2%

services: 65.8%

 

Female Estimated Earned Income (PPP US$): 7,328

Male Estimated Earned Income (PPP US$): 12,273

 

Index Mundi
CIA World Factbook
Human Development Report

Comparative GDP Graph

 

Data from The World Bank 

Real GDP Graph

 

Data fromThe World Bank