South Africa Election and Development

Policy

Karol BoudreauxSenior Research Fellow

kboudrea@gmu.edu

“Rwanda is our nightmare, South Africa is our dream”-

Wole Soyinka

Background

Brief History Legacies of discrimination

Native Lands Act of 1913 Native Consolidation Act of 1945 Bantu Affairs Act of 1971 1990-1992 negotiations to end apartheid

1994 – Present Peaceful elections in 1994, 1999, 2004 Economic Growth between 3-5 percent per annum Unique International Opportunities

Background Cont.

Importance of the Election Change in ANC political hegemony The Need for Reform

Increase opportunities for all South Africans Frustration with misaligned foreign policy

A South Africansuccess story?

Michael Jwambi

Poverty in South Africa

At a R322 ($56) a month poverty line: 56% of Africans are poor 95% of poor are Africans Poverty rates for colored = 34% <10% for whites & Indians

Women-headed households are poorer Rural households are poorer

Source: Bhorat, H. & van der Westhuizen, C. 2008, “Economic growth, poverty and inequality in South Africa: the First Decade of Democracy,” paper commissioned for the Fifteen Year Review.

Key Contenders

African National Congress (ANC) Jacob Zuma

Congress of the People (COPE) Mvume Dandala

Democratic Alliance (DA) Hellen Ziller

ANC priority areas:

Education Crime Jobs Health Rural Development

Unemployment Comparison

Source: Constructed by authors from Labor Force Survey data obtainable from www.statssa.gov.za and fromUS Bureau of Labor Statistics data obtainable from www.bls.labor.gov/data/

Unemployment Rate Comparison

0

5

10

15

20

25

30

35

2001 2002 2003 2004 2005 2006 2007

Year

% U

nem

plo

yed

South Africa

United States

What explains high unemployment? Legacies of apartheid Lots of supply Limited demand for low-skilled workers High search costs High formal sector wage rates Some labor regulation rigidity (firing)

Education

Shared responsibility Large work force 96% public, 4%

independent Generally poor

outcomes for learners Infrastructure backlogs

significant Split department?

“A South African boy gazes through a school fence in Cape Town.”

LA Times, March 24,2009

Crime

Crime in South Africa

Trending down? 50 murders/day each & every day Highest sexual violence rate outside war

zone Costs to businesses/citizens:

Loss of property, work disruptions Spend to protect Limit hiring; limits self-employment

Running Nomzano Butchery

Vicky & Tam Mangoliso run the butchery

Vendors hesitant to drive in – buy from a middleman

Customers don’t want to shop in the later evening hours

Expenses related to crime prevention

Competition spurs violence

Anti-Foreigner Violence Manifestation of underlying problems

Jerome Delay / AP

Policy Recommendations

Creating Jobs Create special economic zones to encourage business

development, job creation, and skills training Create a two-tiered minimum wage structure

Encouraging Educational Entrepreneurship Encourage the entry of more private-sector educational

entrepreneurs Modify teacher certification requirements

Increasing Security for All South Africans Encourage crime reporting and community involvement Improve “customer satisfaction” levels with the police

South Africa and the World since 1994 Unique International Opportunities

Leading voice for democratic governance in Africa Sole African representative to International

Forums Permanent seat on UN Security Council Influential trading partner Host to big sporting events

But…

Confusing regional trading

Case Study

Zambia Member of SADC and COMESA

SADC rules- dismantle all trade barriers COMESA rules- common external tariff

Committed to free trade and maintaining trade barriers with South Africa

An inconsistent voice?

Good Governance? United Nations SC votes

False Dichotomy Failed Elections

Zimbabwe and Kenya

UN Photo by Devra Berkowitz

Joao Silva for The New York Times

Policy Recommendations

Expanding African Economic Integration Reduce the multiplicity of memberships and barriers to

trade Good Governance

Adopt a principled approach to foreign policy Work towards a more robust strategy for monitoring

elections Focus on Public and Cultural Diplomacy

Expand educational, cultural, and professional exchanges throughout the continent

Expand civil society initiatives

Expanding opportunity

SA Finance Minister, Trevor Manuel, on 3.18.09:

"We must diversify. But that is up to the entrepreneurs. Unfortunately governments are bad at producing entrepreneurs.”

http://www.moneyweb.co.za/mw/view/mw/en/page1408?oid=281500&sn=Detail

Questions and Answers

Please visit:

http://mercatus.org/enterpriseafrica/

to read the Mercatus Policy Series

South Africa Country Brief