During the period 1999-2006, a conservative economic policy and a favorable conjuncture assured economy of South Africa steady growth (see. Tab.). Government action – aimed at guaranteeing fiscal consolidation, control of inflationary pressure and efficient management of foreign exchange reserves – and structural reforms, albeit incomplete in some cases, initiated the opening of the market to operators national and international. Furthermore, the greater wealth produced by the economy and the reduction in interest rates contributed to promoting the increase in household consumption and the expansion of business investments.
As far as public finances are concerned, the government continued the reorganization it had begun in the mid-1990s. The consolidation of the macroeconomic framework was pursued with the three-year planning of state expenditure and a more efficient administration of public money, also achieved through the creation of an institution which was entrusted with the coordination in the management of revenues between central, provincial and locals. For South Africa 2001, please check naturegnosis.com.
The public sector maintained a very important role in the country’s economy, both as a financier of infrastructural interventions and as a service provider. Public investments were concentrated mainly in the energy, telecommunications, transport and water network management sectors, and were accompanied by the definition of a clearer regulatory and legal framework, such as to favor the reduction of costs and the increase. the levels of accessibility and quality of public services. For the construction of other infrastructures, collaboration with private investors, national and foreign, was promoted. On the other hand, during the period under examination the role of public enterprises in the process of reconversion and modernization of the economy underwent a progressive downsizing. 2000 and 2003 the State showed its willingness to start the privatization and restructuring of some of them, with the aim of fostering competition and encouraging the growth of investments. In 2004, in reaffirming the new orientation of economic policy in relation to the future of state-owned companies, the authorities declared their desire to reorganize them and encourage the substantial prevalence of a modern entrepreneurial culture within them.
The government action also concerned the employment problem. In particular, efforts were made to encourage the retraining of the workforce and to ensure greater flexibility in the labor market. The professional development of human capital was encouraged through the adoption of programs for the education and training of the workforce. The government also tried to address, especially since 2000, the difficulties many still encountered in gaining employment due to racial and sex discrimination. The medium-term strategies for employment policy envisaged an increase in public spending on investments and the promotion of more widespread information on the labor market, which should have facilitated the matching of labor supply and demand. However, unemployment remained high, and in 2005 it still accounted for 26.6% of the workforce. The following year a new program was therefore launched by the government, which intended to promote economic activity through the reduction of the tax burden, the construction of infrastructures, public assistance to those economic sectors considered strategic and the increase of the resources allocated. education and training.
Competition on the internal market was favored by the introduction of a law which, drawn up in 1998, entered into force at the end of the following year. Among its objectives were the fight against non-competitive practices, the elimination of abuses due to dominant positions and the consolidation of control over mergers. These guidelines were assisted by the simultaneous reorganization of the supervisory bodies responsible for the proper functioning of the market.
The private sector was able to benefit from funding for investment in research and development and for job creation. The tax system was simplified and the bureaucratic burden to which companies were subject was lightened. The promotion of easier access to credit represented another important element in the development of a healthy entrepreneurial fabric. The authorities also promoted measures and interventions aimed at involving young people and women in the entrepreneurial renewal of the economy.
Although the banking sector already had a regulation capable of ensuring a good level of transparency and reliability, the authorities worked to facilitate access to credit even for the economically weaker sections of the population and to increase competition between institutes.
In the agricultural sector, the process of redistribution of land continued, albeit very slowly, in favor of those who had been discriminated against by the policy of apartheid. The government also intervened to support farmers in difficulty, to promote the adoption of better organizational standards and, more generally, to develop the market by favoring the export of products with high added value, facilitating access to credit and increasing investments for the adoption and dissemination of innovative production processes.
The monetary authorities, whose main objective was to ensure greater price stability, were equipped with more effective tools to fight inflation, gaining greater credibility with domestic and foreign investors.
Finally, as far as commercial policy is concerned, the South Africa continued in the process of opening the internal market, effectively removing all the restrictions previously in force on the quantities that could be imported. Recognizing the expansion of exports as a driving force for the country’s economic growth, starting from 2002 the government identified some sectors (including the textile and clothing, automotive, mining, chemical and biotechnology, telecommunications sectors) in favor of which to promote more vigorous trade with foreign countries.