Remaking the Rainbow Nation: South Africa 2002

Background: Strategically used as a re-fuelling station by the British; gradually used for agriculture 1867 Diamonds were found 1880s Gold was found 1900 Gold and Diamond accounted for 65% of exports Transformed from agricultural to industrialized economy 1899 Boer war Afrikaners lost to British

Foundations of Apartheid: 1934 United Party (UP) segregated democracy only whites could vote tremendous growth in economic growth but unequal growth across racial groups 1948 Afrikaner National Party (ANP) came to power ANP replaced whites with Afrikaners Segregated populace into 4 groups: whites, coloured, Indian and African 1911- Mining act Whites had an advantage in skilled positions 1913 Natives Land Act Blacks could not purchase land outside designated areas 1949-50 Prohibition of Mixed Marriages act, Immorality Act illegal for people of different races to marry, have sexual relations

Political History: Politics was handled lightly till second world war Post second world war, emergence of leaders like Oliver Tambo, Walter Sisulu, Nelson Mandela ANC charter based on Socialist ideology. ANC leaders were charged with treason and sent to jail Several crimes against blacks during 1960s-1980s 1970s- Economy destabilized due to fall in gold prices and rise in oil price

Formation of State: West was forced to withdraw ties with South Africa for its Apartheid policy Chase Manhattan bank refused to rollover the outstanding loans New investments were curtailed 1989 P.W.Botha, president suffered stroke, change of reins 1990 lifted bans on ANC

Democracy & RDP: Population registration act ended, all non-whites were granted citizenship ANC focused on RDP Promises of RDP Redistribution of wealth Improve quality of life Create employment and provide houses Net effect Socialist ideas were deeply shaken by collapse of soviet union

Previous Economy SA was expanding economy Industries control under state Govt Large share of wealth producing assets.

Vijay Krishnan A DM14257

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Remaking the Rainbow Nation: South Africa 2002

Transformation post Apartheid: Police Had to change from agents of repression to defenders of civil and political rights Education and Had to be extended to areas where Blacks were there Infrastructure Firms Had to diversify their workforce Pathetic Social Environment: 6 million unemployed; 10 million had no access to running water; 23 million had no electricity; 60% never attended school; IMR varied across race. RDP was re aligned as Economic growth and Redistribution Govt spending on Goods and services had increased. Massive Government Debt Implementation of RDP & GEAR: Budget money was found for implementation of RDP. Each department had to give up a part of its budget and had to come up with a Business plan centered around empowering poor and then the budget would be reallocated. Promises made: 1 million houses, electricity for 2 million houses, redistribution of land and job training for blacks Impact: Investors pulled out, Rand Devalued New Strategy: GEAR: Growth Employment and Redistribution Goals: 1.3 million formal sector jobs, fiscal deficit of 3 %, labor market flexibility Analysis: Acceptance of Market imposed Criteria Results: Successfully achieved stability

Post 1999: Slower privatization Privatization hampered by strikes Fiscal policy was criticized South Africa was suffering under burden of Labor market rigidity

Final Notes: No change in state of Economy between 1994-2002 Worrisome state of HIV affected people Policies adopted were not effective, didnt bridge the gap between rich and poor

Vijay Krishnan A DM14257

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