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Economic Growth South Africa

Essay by   •  January 20, 2014  •  Essay  •  1,052 Words (5 Pages)  •  971 Views

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Economic growth has suffered in the year of 2012 from the euro crisis and social unrest, but it is likely to pick up the pace reasonably in 2013 and 2014 because of accommodating macroeconomic policies and improved global demand.

Since the ending months of 2012 unemployment rate is above 25%. South Africa continues to face the triple challenge of poverty, chronic high unemployment and inequality amid a slow and volatile global and domestic economic environment. National Development Plan has to be implemented to address structural bottlenecks to job creation.

As in all economies there are those who are employed in the quinary sector who control and decide how the companies and government will proceed and grow. South Africa is no different, and has its share of the quinary sector although as in elsewhere, it doesn't employ a huge amount of individuals. Yet this does not mean that the level of importance is any less significant to South Africa as quinary positions always affect a great magnitude of people either through governmental decisions that affect the whole country, or through large business decisions that affect the economy. As South Africa advances economically, the share of employment throughout the sectors shifts more towards the trade, personal and professional services of the tertiary sector as well as the information and decision making activities of the quaternary and quinary sectors. Unemployment Rate in South Africa decreased to 24.70 % in the third quarter of 2013 from 25.60 % in the second quarter of 2013.

Regardless of a rich natural resource gift, the country's extractive industry continues to operate below potential due to the lack of technological progress and policy uncertainty. The African National Congress (ANC) conference is considered to have at least partially alleviated the latter by ruling out outright nationalisation.

Significant efforts will have to be put in place to meet the Government's aim of raising per capita income to as a minimum US$ 13,750 and to create 11 million new jobs by the year of 2030. Additionally, inequality continues to be high, suggesting that making growth more comprehensive remains a significant policy challenge.

The authorities have found the key constraints to raise potential growth and distinguish the need for deep rooted structural reforms. The broad goal of the reforms is to elevate the share of private investment, including "green growth" technologies, increase the level of education and skills in order to lift productivity levels closer to those of other emerging market countries. Reforms foresee improvements in governance and inclusiveness promoting catalytic investment projects focusing on services sectors and high value-added manufacturing, in addition to broader economic reforms to increase incomes of the poorest households and reform public finances to ensure their sustainability and remove distortions.

The National Development Plan and The New Growth Path does support government's long term goal of creating a prosperous and harmonious civilization through livelihood improvements, and environmentally sustainable and regionally balanced growth. To address structural imbalances, stem rising income inequality and further open up the economy reforms will be carried out. Public expenditure will be shifted towards livelihood improvements and major support will be provided to social security, public housing, healthcare and education. Infrastructure do remain major priority with an importance on promoting emerging strategic industries and rural development, in particular environment-friendly technologies and modern clean energy,

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