South Africa

South Africa
During the phase 1994 to 2000, the South African government’s Growth, Employment and Redistribution Strategy (GEAR) was implemented as a restrictive fiscal policy with a commitment to free market principles through deregulation and privatisation and a focus on improving the ‘global competitiveness’ of South African corporations.

These policies were expected to produce growth and economic expansion sufficient to address South Africa’s socio-economic backlogs at the same time as mopping up unemployment and providing employment for new entrants to the labour market. However, the developmental goals around employment and poverty relief have not been realised. The reality from 1996 to 2003 has been that while certain of Gear’s technocratic targets were met, and a measure of economic stabilisation was achieved, the end result remained stubbornly sluggish growth and only slight poverty reduction. The stabilisation and restructuring of the economy have come at a high price, in terms of job losses.

South Africa’s statistics reflect the country’s Apartheid legacy: Africans had the smallest percentage of people employed in the formal sector and the highest percentage employed in the informal sector. Long term unemployment is a serious problem. Of the jobless total, 59% have never worked; among jobless people between the ages of 15 and 30, about 75% have never worked; and of the jobless total, about 26% have been job hunting for one to three years and 41% for more than three years. It is an unfortunate paradox that although the ANC government has succeeded in bringing stability and competitiveness to the macro-economy, this has resulted in even lower levels of employment, thus concentrating the benefits of liberalisation and stability in the hands of a small number of South Africans. In March 1993, unemployment stood at 42.1% Despite South Africa being an upper-middle-income country, its rate of poverty stood at 45% in 2000. The 1996 Population Census put the Gini co-efficient at 0.68. Approximately 6% of South Africa’s population captures over 40% of income earned. The Gini coefficient reveals ongoing inequality and poverty, 10 years after the democratic transition. However, the rates for access to water and literacy show that some progress has been made.

To read a detailed labor market analysis for South Africa, download one of the following:
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Source:
NALEDI — National Labour & Economic Development Institute
6th floor COSATU House
1 Leyds Street
Braamfontein
Johannesburg, South Africa
Tel: (011) 403 2122
Fax: (011) 403 1948
http://www.naledi.org.za/

Data posted: January 8, 2004.

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