Introduction
South Africa’s economic history in the twentieth and the twenty-first centuries illustrates the narratives of discrimination, national pride, and long-awaited economic growth. Following the end of the apartheid system, a system of legalized segregation by race, South Africa has embarked on a journey to economic stability. This essay will explore the central ingredients for the country’s success and discuss the institutions that aided in promoting growth.
Ingredients for Success
South Africa exemplifies a successful economy if compared to other African countries. With its GDP currently exceeding $329 billion, it represents the third-largest economy in Africa and one of the few upper-middle-income African economies (Varrella). Some historically significant ingredients for South Africa’s current success include leaders committed to the black majority’s interests, economic diversification in the post-apartheid era, and the presence of substantial natural resources for export.
The socio-economic legacy of South Africa’s national leaders opposing the apartheid rule is a critical predictor of success. For instance, Nelson Rolihlahla Mandela, the country’s first black president serving between 1994 and 1999, openly defined himself as a “committed nationalist” (Anyaoku 637). His central political ideas included achieving a multiracial democracy and instrumentalizing foreign trade as a means of increasing South Africans’ well-being (Manikandan 88). Mandela’s presidency aided in redistributing South Africa’s resources and redefining priorities in a way to improve the average citizen’s quality of life. Specifically, by the end of Mandela’s presidential term, the number of children not going to school, those lacking access to clean water, and citizens in un-electrified households changed. It decreased by 1.5, 3, and 2 million people, respectively (Manikandan 88). In a similar way, pregnant women’s and children’s access to free healthcare services was guaranteed in 1994 (Manikandan 88). In general, social protection policies can minimize the loss of productive capital, such as labor power, thus supporting growth. In contrast, the apartheid system did not emphasize the non-white majority’s personal development opportunities.
The diversification of economic activities and natural resource trade are other components of holistic socio-economic improvement in post-apartheid South Africa. The country has gradually become the most diversified economy in Sub-Saharan Africa, partially due to increases in its service and manufacturing sectors after the apartheid’s end (Ngarava 264). Under the apartheid rule, the country over-relied on the “mineral-energy complex-based” strategy of development, the reverberations of which can still prevent South Africa from fulfilling its potential as much as possible (Ngarava 265). Next, the abundance of natural resources is part of South Africa’s economic success compared to other countries in the region. The country’s production of coal has been growing since 2004, and South Africa is among the world’s prominent producers of platinum, titanium, gold, chromium, manganese, iron ore, and other minerals and metals (Statistics South Africa). The role of mining activities in South Africa’s GDP has reduced, but its major contribution to profits from exports remains undeniable. In combination, ongoing diversification and substantial natural resources became the ingredients for success and creating a competitive economy.
In summary, South Africa’s success, although relative to other countries in the region, became possible due to several interconnected factors. Under Nelson Mandela’s well-intentioned leadership that emphasized the black population’s needs, the country embarked on the path towards economic diversification. Particularly, Mandela’s contributions and social policy decisions under his presidency increased the population’s access to healthcare, education, and public utilities. At the same time, natural resources supported South Africa’s ability to generate stable revenues and fund infrastructure development projects.
Economic Growth Promoting Institutions and Their Influences
South Africa’s economic growth and achievements in the post-apartheid historical period can be attributed to the activities of governmental institutions and the strategies of development they proposed. During Nelson Mandela’s presidency in the 1990s, the Government of National Unity (GNU) represented a prominent institution aiming to promote growth and development. A decade after, in the 2000s, the Department of Trade and Industry (DTI) took on the challenge of promoting further growth by facilitating the diversification of South Africa’s economy. The role of diversification in promoting stable growth is undeniable since success in this regard enables countries to better adapt to the global demand-related trends. These two governmental institutions contributed to economic growth by means of changing the country’s strategic priorities in a timely manner.
The GNU’s and Nelson Mandela’s positive effects on the economic growth are linked with multi-dimensional policies to eliminate apartheid’s effects on South Africa’s trading position and poverty. The famous Growth, Employment, and Redistribution (GEAR) plan was introduced by Mandela in 1996 as a “non-negotiable” GNU’s decision (Mamogale 178). The plan incorporated both macroeconomic and microeconomic measures to promote growth, including budget reform, tariff reductions, reprioritization to finance services for the poor, market liberalization, and human resource development (Streak 273). The employment promotion part also involved a set of three acts accepted between 1997 and 1998. They defined the basic conditions of employment, introduced protections against discrimination in the labor market, and established workplace-based mechanisms for skill development (Streak 274). Although not all targets were fully met, the aforementioned strategic moves laid the groundwork for the country’s future development. For example, they did so by enhancing South Africa’s private investment environment, stabilizing inflation rates, and lowering the deficit-to-GDP ratio (Streak 277). In the early 2000s, pro-GEAR economists referred to South Africa’s economic growth as “impressive” (Streak 277). This policy’s positive legacy is still recognized despite the plan’s imperfections.
Another governmental institution that promoted economic growth in South Africa was the DTI. As an authority responsible for large-scale policy decisions, such as industrial and commercial strategies, the DTI supported South Africa’s long-term goals by introducing a new comprehensive plan aimed at increasing diversification. The diversity of South Africa’s exports to its key trading partners was initially increased due to the GEAR plan, resulting in around two-thirds of exports represented by non-mineral exports (Streak 277). Later, in 2007, the DTI headed for promoting further economic diversification to achieve growth (Ngarava 264). That year, the agency presented the National Industrial Policy Framework to influence the degree of diversification while also transforming South Africa into an industrialized country (Ngarava 264). The policy’s key points included the ongoing support for non-large enterprises in South Africa, seeking decentralized industrialization, and reducing the country’s excessive reliance on the Mineral-Energy Complex (Ngarava 265). The new policy led to important economic achievements for South Africa, including the diversification of its manufacturing economy and the services sector (Ngarava 265). Achieving more diversified production cannot be fully attributed to the DTI’s performance, but the agency contributed to it.
Conclusion
To sum up, the events of the past could explain South Africa’s current economic position in the region. In the post-apartheid period of history, South Africa’s social-oriented leaders, numerous natural resources, and diversification became the ingredients for its success. Governmental institutions, such as the GNU and the DTI, supported its growth by means of social support, employment, foreign trade, and diversification policies in the 1990s and the 2000s.
Works Cited
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