Answer to Question #311357 in Sociology for Pilisiwe

Question

Summarise the development feature of South Africa

Answer 1

South Africa Economic Outlook

Real GDP grew at an estimated 0.7% in 2019, down from 0.8% in 2018, and is projected to rise to 1.1% in 2020 and 1.8% in 2021 amid domestic and global downside risks. Contraction in agriculture and mining drove slow growth in 2019. Agriculture contracted 4.8% and mining 1.7% in 2018.

Despite the abundance of goods and natural resources that characterize South Africa, and despite the remarkable progress in the field of industry and manufacturing, it is still on the list of developing countries. South Africa has adopted Operation Phakisa which is an approach to implementation that has been adapted from the Malaysian methodology called Big Fast Results. Success will be achieved when government, business, and civil society work together to identify challenges and unlock business opportunities.

The South African economy has been described by economist Ruchir Sharma in his recent book Breakout Nations as “a developed market wrapped inside an emerging market". Two decades on from the formal end of the old apartheid regime, the South African economy can lay claim to being one of the wealthiest in Africa and one with a stable functioning democracy. It is Africa's biggest economy but also one which has deep-rooted structural problems constraining its growth and development.

South Africa is one of the biggest economies on the African continent. But despite a period of strong growth from 2003-2007 – their average annual growth rate for real GDP between the years 2001-2010 has been relatively poor and certainly well below the African average. A cluster of African countries has achieved much stronger growth rates helping to bring about improvements in a range of development measures.

South Africa appears to be struggling to raise her annual growth rate towards the 5% or 6% mark that most economists regard as crucial to make faster progress towards MDG goals and to address the chronic problem of very high structural unemployment in the economy. The rate of unemployment in South Africa has remained stubbornly above 24% of the labor force but this average hides an enormous disparity in jobless rates between whites and non-whites.

The government has a target of reducing unemployment to 15% of the labor force but this will take a substantial improvement in economic growth to bring about and will also require labor market investments and reforms one of the perceived weaknesses of the South African system is a bloated welfare state, indeed there are more people receiving social grants than in employment. In 2009, only 12% of the population paid any income tax. Unemployment rates in the townships are horrendously high often in excess of seventy percent. It is no surprise that in addition to more than 6 million South Africans unemployed, there are well over 2 million people working in the informal economy.

The South African economy is heavily dependent on mining but in some sectors, the real value of output has been on a declining trend as well as being volatile from month to month. South Africa is experiencing de-industrialization a falling share of industrial output and jobs as a share of total economic wealth.

South African growth is not slow by the standard of the growth record of many Euro Zone countries in recent years! But her economy does not seem to have achieved the “take-off" required to kick start significant development progress, especially against the background of her deep social problems. One important feature of the economy is that South Africa has made relatively modest progress in meeting a number of key development targets and some of the Millennium Development Goals.