Neoliberalism is an ideology that as well serves as a model in politics. The central values of neoliberalism are the free market and fair competition. Lachmann states it is characterized by massive privatization, also known as deregulation, and the reduction of trade unions (2016, p. 2). Rivalry is considered a crucial factor in people’s lives and defines their success or failure depending on whether they can reach and maintain high positions in the market. In the perspective of neoliberalism, inequality does not exist in that initial meaning, and poverty or wealth is the result of competition where everyone gets the outcome they worked for. This global phenomenon also influenced South Africa positively and negatively, depending on which perspective to observe.
Consequently, privileged people and the high class ignore the original benefits that allow them to achieve wealth and success more easily than regular people. In turn, lower classes and people with little outcome feel like they are not doing enough, or their efforts are simultaneously ineffective, not considering their socioeconomic position limiting their opportunities. With the becoming of neoliberalism, rich people gained a chance to reduce taxes and regulations for themselves. However, Kgatle believes that all this resulted in the cutting of social programs, inequality, lower pay for workers, and several other adverse outcomes (2020, p. 4). South Africa also got under the influence of neoliberalism, and the results were controversial.
Firstly, this political model seemed to stop racial segregation, but because of certain measures on saving the budget and the change, there was no improvement in the economy. Although neoliberalism was initially supposed to provide access to the free market, it eventually became an obstacle to free trade and economic development. At that time, South Africa was struggling with three main challenges: poverty, inequality, and high unemployment. According to Kgatle as a response to the issue, the government created National Development Plan, which aimed to stabilize all those spheres and reach a flourishing economic state (2020, p.3). The government did not actively participate in the economy, and the private sector and entrepreneurs made all the regulations. Moreover, the strong focus on the foreign market negatively influenced the lower classes, and the entrance of the free market barely changed the situation. Since regular people cannot be a part of it, and there is no redistribution of wealth, there is no way to increase income.
Neoliberalism as a political model primarily benefits wealthy communities and business owners, but for regular people, for example, from South Africa is very challenging to enter the free market. Despite some achieved progress, most people were still poor, which was strongly related to neoliberalism. The implementation of neoliberalism contributed to solving some issues but failed to address the most significant problem, such as structural unemployment, poorness, and class inequality.
There are several critical issues that the South African government is trying to solve, but they still exist in the economic and social landscape. All of them are fundamental elements for the people’s well-being and the growth of the country’s standard of living. Regarding the changes in the economy, “radical revisions at this level can only occur if there is a shift in thinking at a macro level” (Banerjee, 2008, p. 24). However, the primary problem faced by South African society, for now, is extremely high unemployment.
Although the government has attempted previously to deal with the issue, and in the case of neoliberalism, there was a hope to improve the situation, South African society was initially too poor to compete in the free market. In modern days, the problem is still relevant, and it is getting even worse due to the spread of coronavirus infection all over the world. The unemployment rate remains approximately more than 20%, and a significant part of it is the black population according to Cook (2020, p.18). While skilled jobs continue growing in quantity and always have a demand for specialists, the variety of professions where no or little skills are required keeps declining.
Among the population, half of all the unemployment is represented by youth who lacks the opportunity to start a career or get a non-skilled job in the market due to the lack of experience. Under the pressure of inequality and systematic racism, the marginalized groups struggle the most with getting a job, and they usually represent the segment of poor people. Their position became more challenging when South Africa, at the beginning of the pandemic, took several measures to protect the population from the affection of the virus.
However, it negatively impacted the economy since many public places were closed due to the restrictions of massive gatherings, and people should have stayed at their homes for self-isolation. Some of the companies and organizations faced significant losses, and the emerging circumstances caused a decline in the companies’ profits and an increase in expenditures. Therefore, employers had to save the budget and fire some employees if they could not afford to pay them wages during the lockdown. Inevitably for a decent number of people, it has led to the temporary or permanent loss of work that made the situation with unemployment even worse than it used to be
The high unemployment rate is strongly connected with other serious economic issues in the country and results in poverty which the government is still unable to overcome. A severe group of people struggles to access essential public services such as healthcare and higher education, and the inability to get employed in well-paid jobs negatively affects the situation. The sudden pandemic hit negatively affected the market, and even more, people struggled to get a job, although it was already an immense concern.
The best project solution created by the profit business in South Africa is providing the internet connection to the adverse districts by Herotel. It is the union of the thirty businesses that cooperated in 2014 to give access to quality and fast internet connections all over South Africa (Our Story, 2022). The organization’s primary goal is to create an opportunity for everyone in South Africa, despite their income level or belonging to a certain social class, to access a fast and affordable internet connection.
Nowadays, the internet connection is no longer a luxury but a necessity that allows one to work, study and maintain a connection with family and friends, especially in the time of the pandemic. This project is outstanding and remarkable for many reasons since it meets the needs of modern life and helps those with low income to participate in activities through the internet with the rest of the world. Since high unemployment is a vital economic issue in South African society, access to the internet and Wi-Fi let people widen their job searches. Along with the more varied spectrum of professions and careers, they might try to get a remote job that is in big demand because of the Covid-19 epidemic. In case people lack the experience or the skills, through high-speed wi-fi, they can attend the online courses suggested by the educational platforms and even universities.
Therefore, it would be beneficial for those who struggle to get a regular income because of the lack of resources and professional qualifications. Children and youth can continue their education and not skip the program in school or university. Following their vision, Herotel managed to become the largest internet provider in the area by connecting around 100000 households across half of a thousand cities (Our Story, 2022). With the opportunity to gain information about the events that happen in the country and the world, in general, the low and middle classes might raise their awareness about the current socioeconomic position in South Africa.
This business project is incredibly significant to South African society because it targets the less privileged part of the population, representing most citizens struggling with unemployment and poor income. By providing them with the resources to enrich their opportunities for employment or higher pay, the project contributes to the overall increase in quality of life and a decline in unemployment. Therefore, a more educated and enlightened number of people of the low and middle classes can further become the driving force in the possible changes in government and create better living conditions for themselves.
The South African government has developed a long-lasting strategy for the improvement of the socioeconomic position of the country by creating the National Development Plan. This plan includes the goals and missions formed according to the most urgent problems that need to be solved. There were several national plans; however, the recent one is the biggest and more severe than the previous attempt and strives for fundamental changes in the system and society. Some issues were solved fully or partially, but some remain on the plan until the government implements effective decisions. However, some specialists discuss and suggest alternatives to the accepted development model.
The vision and goals of the National Development Plan seem to aim for the maximum improvement of the current economic and political situations. It includes effective government, decent healthcare and education, social safety, competitive infrastructure, and sustainable households (Rockström et al., 2013, p.44). The goals are identified precisely with the country’s issues, and their overcoming might promise a more prosperous future and possibilities for South Africa. However, the previous development plans may demonstrate progress, but the most significant spheres – unemployment, poverty, and inequality, remained unresolved. Thus, this National Development Plan may be valid, but it is unclear if it will be effective this time.
Previous strategies contained similar goals and focused on the same economic aspect that needs to be improved. However, there is a difference between the current plan and those from other years. The plans that were implemented before could be characterized as superficial and brief comparing the actual strategy. The modern development project highlights various sets of factors that need to be renovated to positively impact the situation in South Africa (National development plan: Vision 2030, 2022). By shifting attention towards the complex interconnected issues and influencing each other, the government may succeed with the current plan.
As an alternative, the government could focus on certain sectors to improve productivity. Those fields that are usually in demand for the workforce, such as construction machinery and plastics, should be prioritized to provide people with the learning environment to get the qualification for the job (Businesstech, 2020). In turn, agriculture and chemistry, for example, receive enough labor force, but they are still critical for the economy, so the government should support their maintenance and development.
Therefore, the National Development Plan suggests solutions to the critical issues South Africa faces. Although the previous plans did not manage to accomplish all the goals, the current national plan approaches the situation from another perspective focusing on deeper problems than the previous ones. As an alternative, the government could redistribute more sources to the professional fields with high demand for workers and support the development of enough labor.
References
Banerjee, S. B. (2008). Corporate Social Responsibility: The Good, the Bad, and the Ugly. Critical Sociology, 34(1), 51–79. Web.
Cook, N. (2020). ‘South Africa: Current issues, economy, and US relations’. Congressional Research Service, pp. 1-36.
Kgatle, M. S. (2020). ‘The relationship between the economic strand of contemporary Pentecostalism and neo-liberalism in post-1994 South Africa’. Religions, 11(156), pp. 1-10.
Lachmann, R. (2016). ‘Crisis of Neoliberalism, Crisis of the World?’ Contemporary Sociology, 45(1), pp. 1–5. Web.
National development plan: Vision 2030. National Planning Commission. Web.
Our Story. Herotel. Web.
Rockström, J., & Sachs, J. D. (2013). ‘Sustainable development and planetary boundaries’. SDSN, pp. 1-45.