Cry, the beloved country [South Africa] – The Economist (October 20, 2012)

http://www.economist.com/

South Africa is sliding downhill while much of the rest of the continent is clawing its way up

NOT so long ago, South Africa was by far the most serious and economically successful country in Africa. At the turn of the millennium it accounted for 40% of the total GDP of the 48 countries south of the Sahara, whereas Nigeria, three times more populous, lurched along in second place with around 14%. The remainder, in raw economic terms, barely seemed to count.

Despite South Africa’s loathsome apartheid heritage, solid institutions underpinned its transition to democracy in 1994: a proper Parliament and electoral system, a good new constitution, independent courts, a vibrant press and a first-world stockmarket. Nelson Mandela, whose extraordinary magnanimity helped avert a racial bloodbath, heralded a rainbow nation that would be a beacon for the rest of Africa.

Since then, Africa, once harshly labelled by this newspaper as “the hopeless continent”, has begun to make bold strides (see article). Meanwhile South Africa, though still a treasure trove of minerals with the most sophisticated economy on the continent, is on the slide both economically and politically (see article). By some calculations Nigeria’s economy, messy as it is, will overtake it within a few years. What went wrong with South Africa, and how can it be fixed?

Gathering gloom

In the past decade Africa to the north of the Limpopo river has been growing at an annual average clip of 6%, whereas South Africa’s rate for the past few years has slowed to barely 2%. Rating agencies have just downgraded South Africa’s sovereign debt. Mining, once the economy’s engine, has been battered by wildcat strikes, causing the biggest companies to shed thousands of jobs in the face of wage demands and spreading violence. In August a confrontation at a platinum mine in Marikana, near Johannesburg, the commercial capital, led to 34 deaths at the hands of the police.

Foreign investment is drying up. Protests against the state’s failure to provide services are becoming angrier. Education is a disgrace: according to the World Economic Forum, South Africa ranks 132nd out of 144 countries for its primary education and 143rd in science and maths. The unemployment rate, officially 25%, is probably nearer 40%; half of South Africans under 24 looking for work have none. Of those who have jobs, a third earn less than $2 a day. Inequality has grown since apartheid, and the gap between rich and poor is now among the world’s largest.

The ruling African National Congress (ANC) is not entirely to blame. South Africa has performed worse than its African neighbours in recent years partly because its mature economy is linked more tightly to the rich world, and thus to the rich world’s problems. And the ANC has notched up some genuine achievements—including housing and some welfare services often denied to the poor black majority under apartheid. But the party’s incompetence and outright corruption are the main causes of South Africa’s sad decline.

For the rest of this ariticle, please go to The Economist website: http://www.economist.com/news/leaders/21564846-south-africa-sliding-downhill-while-much-rest-continent-clawing-its-way-up

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