Gearing up for growth
The new South African government's enthusiasm for the free market has surprised some sceptics. But does it have the right plan to tackle the country's problems of entrenched unemployment, fitful economic growth and a heavy dependence on gold exports - not to mention rampant crime? Bruce Cameron reports.
South Africa has still not escaped the torments of volatility. It periodically hits economic growth, business confidence, the gold price - even the weather. But since the first democratic elections of April 1994, the troughs have been neither as deep nor as sustained. When the economy loses pace, as it did earlier this year, it no longer drops into negative growth. And periods of slower growth seem to be far shorter than they were in the dying days of apartheid. But there is still a rapid ebb and flow of confidence. Regularly, as confidence seems to be picking up, there's another blow to the economy. The most recent and the most serious was a drop of almost 30% in the gold price, putting the jobs of thousands of miners at risk and savaging export earnings.
There are a number of reasons for the waves of good news-bad news. These include the wide economic and political differences that still dominate daily life; the continued failure to develop a broadly based economy, with mining, particularly gold, and agriculture maintaining their dominance; and the fact that the government is struggling with comparatively limited resources to get rid of structural problems inherited from the apartheid regime.