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By UN classification South Africa is a middle-income country with an abundant supply of resources, well-developed financial, legal, communications, energy, and transport sectors, a stock exchange (the JSE Securities Exchange), that ranks among the 10 largest in the world, and a modern infrastructure supporting an efficient distribution of goods to major urban centers throughout the region. South Africa's per capita GDP, corrected for purchasing power parity, positions the country as one of the 50 wealthiest in the world. In many respects, South Africa is developed; however, this development is significantly localized around 4 areas, namely: Cape Town, Port Elizabeth, Durban, and Pretoria-Johannesburg. Beyond these 4 economic centers, development is marginal and poverty still reigns despite Government strategies. However, key marginal areas are experiencing rapid growth recently. Such areas include: Mossel Bay to Plettenberg Bay; Rustenburg area; Nelspruit area; Bloemfontein; Cape West Coast; KZN North Coast amongst others. Large income gaps and a dual economy designate South Africa as developing. Only Brazil and India show a greater divide between its country's wealthy and poor residents[citation needed]. Consecutive growth rates in the last ten years are helping lower unemployment; however, the economy still has ways to go, and daunting economic problems remain. Other problems are crime, corruption, and HIV/AIDS. At the start of 2000, President Thabo Mbeki vowed to promote economic growth and foreign investment by relaxing restrictive labor laws, stepping up the pace of privatization, and cutting unneeded governmental spending. His policies face strong opposition from organized labor It is estimated that South Africa accounts for up to 30% of the gross domestic product of the entire African continent. South Africa is also the continent's largest energy producer and consumer. The Rand, the world's most actively traded emerging market currency, has joined an elite club of 15 currencies - the Continuous linked settlement (CLS) - where forex transactions are settled immediately, lowering the risks of transacting across time zones. The South African Rand (ZAR) was the best performing currency against the US Dollar between 2002 and 2005, according to the Bloomberg Currency Scorecard. The volatility of the Rand has affected economic activity, with the rand falling sharply during 2001, hitting an historic low of R13.85 to the United States dollar, raising fears of inflation, and causing the Reserve Bank to increase interest rates. The rand has since slightly recovered, trading at R5.99 to the dollar as of January 2006 while the South African Reserve Bank's policy of inflation targeting has brought inflation under control. The stronger Rand has however put exporters under considerable pressure, with many calling for government to intervene in the exchange rate to help soften the rand, and many others dismissing staff. 21.5% of the adult South African population have been estimated to be HIV positive in 2004. The government has recently, after much delay, devoted substantial resources to fighting the epidemic. A recent study from the African Journal of AIDS Research by Thomas Rehle and Olive Shisana showed the infection rate starting to level off, from 4.2% to 1.7% infection rate for 15-49 year olds, and AIDS deaths peaking at 487,320 in 2008. In 2000 President Mbeki publicly questioned the importance of HIV in causing AIDS, controversially suggesting that the main cause was "poverty". In 2001 the government appointed a panel of scientists, including a number of AIDS dissidents (who question the mainstream view on HIV), to report back on the issue. Following their report, the government stated that it continues to base its policy on the premise that the cause of AIDS is indeed HIV. The controversy has not abated, and organizations such as the Treatment Action Campaign continue to mount political and legal challenges to what they claim is the government's slow response to the epidemic. Refugees from poorer neighboring countries abound with immigrants from the DRC, Mozambique, Zimbabwe, Malawi and many others representing a large portion of the informal sector. With high unemployment levels amongst poorer South Africans, xenophobia is a very real fear and many people born in South Africa feel resentful of immigrants who are seen to be depriving the native population of jobs, a feeling which has been given credibility by the fact that many South African employers have employed migrants from other countries for lower pay than South African citizens, especially in the construction, tourism, agriculture and domestic service industries. Illegal immigrants are also heavily involved in informal trading. However, many immigrants to South Africa continue to live in poor conditions, and the South African immigration policy has become increasingly restrictive since 1994 |
South Africa Information: Inside
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