South Africa Political Economy Maj Tara Hasbrouck

 Dawie Roodt  While hospitalized he released a 3-step plan:  Encouraged compatriots to “forget about government projects like the Industrial Policy Action Plan (IPAP) and the National Development Plan (NDP).”  Mandate that all state employees reapply for their positions  Establish a world-class skills-development program to keep pace with the growing economy  Less about creating jobs and more about removing barriers

Crisis  Pop is 53M; GDP is xxx USD  For 2015 projected growth at 2%; first quarter results on 1.3% GDP v. 4.1% in 4th qtr  Debt: $114B, deficit is xxx% GDP  Unemployment up to 34,9% or 8,4 million without jobs  10M youth  2/3 not educated  Majority blacks - 36% unemployed

 Attracted 10B in FDI in 2013/14  Has organizations Sasol, Bidvest, Nando, Shoprite, and Standard Bank  Johannesburg Stock Exchange – top 20  In 2014, international tourists numbered from largest to least as follows: German, Chinese, French, Australian, Indian, and ????  Tourism – hampered by new visa regulations  Employs 1.5M South Africans and contributes to 9% country’s GDP  CH tourists decreased by 38% first quarter

Exports  Agriculture – wool, maize, sugar, fruit, etc  less than 3% GDP  50% from mining, 1/2M jobs  31% GDP  World leader in xxx and xxx, & some gold, diamonds, and coal  Tremendous difficulty in tourism and mining sectors due to government regulation

 ANC won 62% of vote in country’s 5 th national elections; Jacob Zuma in power since ’09  Tripartite alliance between the ANC, the South African Communist Party (SACP) and the Congress of South Africa Trade Unions (COSATU)  Labour Relations Act (LRA) gave unions disproportionate power relative to employers

Load shedding  Power comes via the state – ESKOM  Necessity to have load-curtailment agreements  Talk of Dept and Trade Industry purchasing industrial-sized generators for manufacturing enterprises  Nuclear power –5%

 2015 Indo-African trade projected at US $100B  SA is one of India’s largest investors at $112M  Bilateral trade jump from $5,3 B in 2001 to $63 B in 2011  In SA, Indian textile workers earn R600/month while Chinese manufacturing workers earn R4000/month.

 Trying to be a Developmental State - Country’s strong planning capacity not matched with policy implementation  Low long-term growth rates  Corruption  Inadequate human capital base  Persistent social inequalities  High structural unemployment needs