Background of the Country
The republic of South Africa is a country in the continent of Africa located at the southern tip of the continent. It has a coastal strip that stretches along two world oceans, the Atlantic and the Indian Ocean. The coastal strip is 2, 798 miles long. The country has a long history and economic success ranking among the best performing countries in the African continent. South Africa has three capital cities ranked according to the arms of the government (Beck, 2000). Pretoria is the executive capital, Bloemfontein the judicial capital and Cape Town the legislative capital. However, Johannesburg is the country’s largest city. The country is divided into nine provinces as shown in the following figure.
The republic of South Africa
South Africa is a diversified country in its ethnicity, culture, language and religion. As a multiethnic society, the constitution of South Africa recognizes eleven official languages. These languages are English, Afrikaans, Zulu, Sotho, Tsonga, Ndebele, Tswana, Swazi, Venda, Xhosa, and Northern Sotho (Beck, 2000). The ethnic groups in the country are the majority black who makeup to approximately 80 percent of the 53 million citizens, the colored, Indian or Asians and the whites as well as a small number of other ethnic groups. The country is a democrat with a parliamentary representativeness for all the ethnic groups.
The republic of South Africa has various geographical features and climatic condition ranging from the coastal strip to the driest Kalahari Desert in the north. The republic of South Africa lies between the latitudes 220 and 350 South and longitudes 160 and 330 East. Away from the oceans, South Africa is a dry land as its neighboring countries of Namibia, Lesotho and Mozambique. The interior land is flat savannah that hosts wildlife making its tourism industry one of the most developed in the continent (Oppong, 2006). On the north of the Great Karoo is a drier land stretching into the Kalahari Desert. The Highveld, located at the mid-eastern part is the best land for the commercial farmland, and it is the home to the Gauteng Province.
The climatic condition of South Africa
South Africa is classified as a semi-arid country but has a variation of climate and topography. The country has eight types of habitats with distinct ecological conditions and related sets of plants and animals. The climate of South Africa is dry in the northern part of the Karoo plateau stretching to the Kalahari Desert; that is so hot in the summer and becomes icy in the winter. There are other climatic conditions within the country such as Mediterranean climate in the southwest and the northern part of Vaal River that receives adequate rainfall. The country experiences both winter and summer making it good for ice skiing.
Fight for Democracy and Apartheid
The Khoisan was the first occupants of South Africa. In 1652, the Dutch East India Company brought the first European settlers who settled on the Cape of Good Hope. The coming of the Dutch marked the first period of colonization of South Africa. The settlers used a Dutch dialect known as Afrikaans and tried to establish an independent republic in 1795. The discovery of diamond in South Africa stimulated the coming of the British colonizers in 1867 (Oppong, 2006). The Boers and the British got into conflict over the minerals resulting to the foundation of the Union of South Africa in 1910. This was the first phase of freedom when the Dutch got their freedom as the Africans were still a colony.
Apartheid or racial segregation delayed the achievement of South African independence. After the World War II, the republic failed to sign the Universal Declaration of Human Rights drafted by the United Nations. The apartheid policy was against all non-white citizens who were physically separated from the white. The Africans were not allowed to vote from 1936 and the only association they had with the white was as slaves in the mines (Smith, 1990). The African opposed the racial separation and resulted to protest that led to the Sharpsville massacre in 1970 where seventy black protestors were killed in a peaceful protest. The protest became intense in 1976, and 600 black died in Soweto (Bromberger, 1978). In the 1960, many Africa countries got their freedom and the opposition against apartheid took new turns as international communities got involved. The United Nations imposed sanction as many other countries supported the end of apartheid. In 1989, the F. W. de Klerk replaced P. W. Botha as the leader of South Africa and showed his intention to end apartheid. In 1991, there was the formation of the Convention for a Democratic South Africa (CODESA) that initiated the drafting of a new constitution (Smith, 1990). The new constitution provided for multiracial elections in the 1994 elections. In those elections, there was a massive victory for Nelson Mandela and the African National Congress (ANC) party marking the reign of the first black president and the end of apartheid (SouthAfrica.info. 2012.). However, though the apartheid policy ended in the 1990s, there is a great racial inequality in the country; arguably, the greatest in the world.
South African Economic History
The South Africa political and economic history revolves around natural resources such as minerals and wildlife. The discovery of diamond in 1867 near Kimberly laid the foundation for the country’s economic history. The country mines approximately sixty different minerals with the number expected to rise (EuroMonitor International, 2012). Coal is the most important mineral in the country being the fifth coal producing country in the world. The country ranks as the third leading exporter of coal exporting 25 percent of its annual production and the rest used for domestic electricity production.
Gini index: 2000-2011- Euro monitor International from national statistics
Between the year 2000 and 2011, the real GDP growth of the country averaged at 3.6 percent. The country experiences the most unequal income distribution in the world with a 63.6 percent Gini index in 2011. The country's economic policy aims at achieving economic growth as well as addressing poverty, inequality and unemployment. The republic of South Africa has the highest income inequality in the world despite the end of apartheid in 1994 (EuroMonitor International, 2012). The income inequality in South Africa has remained unchanged between the 1990 and 2011 according to the Gini Index. Consequently, this has been the country's major challenge and has impacted on its business environment as well as its economic development. The figure below shows the Gini index of five countries including South Africa. The Gini index is the international measure of income inequality whereby 0 percent is the perfect equality and 100 percent perfect inequality. The income gap between the rich (white) and the poor (blacks) increased between the same periods.
The income inequality in South Africa poses a key challenge that affects it economic development, socio-economic stability as well as it education and health development. The inequality also increases poverty levels and crime rates. The poverty level increases homicide rates with the country ranking the eighth in homicide cases. The country's level of poverty is so high with; 25.3 of the population living below $2.00 per day in 2006 (Oppong, 2006). The high level of poverty qualifies the country into a low-income country despite the United Nations ranking it as a middle-income country. Furthermore, the inequality and related factors affect it business environment and investment potential as the country experiences a decline in its foreign direct inflows. The income inequality separates the whites and the blacks and the blacks are the majority poor.
Agriculture and Industrialization
After the apartheid in 1994, there was high expectation of industrial development in South Africa. However, the problem could not be solved as the black elites failed to play any role in the ownership and control of the productive economy or support the country’s economy into industrialized phase. The economy continued to rely on the mineral industry and did little to expand other industries except the tourism industry. At first, the economy's growth was promising with local and foreign investors showing interest in investing. Ironically, the period between 1996 and 2006 witnessed a decline in the country’s major export, minerals. This was due to the poor mining policies and infrastructure inadequacies. The subsequent result is the failure of many other industries. Industrialization in South Africa is poor and incomparable to developed countries or some developing countries such as China.
Agriculture in South Africa is poorly contributing on 2.6 percent of the GDP and 10 percent of formal employment. The land reforms are poor and unpopular to most the stakeholders. The government plans to transfer 30 percent of the productive land held by the whites to the disadvantaged black community. Comparing South Africa’s agricultural production and the rest of Africa, its agricultural position is very low and poor.
The tourism sector in South Africa is very crucial in the economic growth of South Africa. The government has set in place adequate measures to increase tourism contribution to the economy directly and indirectly. The country’s world-class infrastructure and spectacular scenery makes it a world tourist destination (Smith, 1990). The tourism sector in South Africa attracts 73 percent of the total tourists in Africa making the country earn over R50-billion in returns. Domestic tourism is important, and the tourism sector contributes to employment. The importance of the sector has put it the government’s policy planning and implementation framework.
South African Economic Success
The economic success of the South African republic is attributed to two major industries the tourism sector and the mining industry. The mining industry is the oldest industry in South Africa and forms its economic background. Since the discovery of diamond in 1867 near Kimberly, the industry has been a success before and after the apartheid system. In the recent past, tourism has been South African greatest export ranking among the highest in Africa (Smith, 1990). There is much wildlife that provides the required tourist attraction (George, 2008). South African economy has grown, and it is considered to be an upper-income earning according to United Nations statistics. The country has worked closely with western aids and acquired adequate assistance to achieve its economic success.
Though the country has made significant economic progress, the blacks are economically handicapped. It is, therefore, important for the country to adopt economic measures that ensure economic equality thru the distribution of income and resources adequately. The blacks are the majority in numbers but minority in resource and income distribution. Most of the blacks live in poverty, diseases and are illiterate (Beck, 2000). The government should seek ways to empower the blacks through adequate allocation of resources, provision of healthcare and education. The provision of these services empowers the blacks thus giving them a competitive advantage. In relation to the empowerment, the government should adopt an affirmative action plan to target the marginalized poor black.
Relation with international and multinational organizations
The country should encourage foreign investment by providing better business environment in all sectors of the economy. Such a move attracts investors and outsourcing companies thus creating more job opportunities and increases the national income (Beck, 2000). In that accord, the national governments have access to more revenue to invest in development projects. Maintaining a good business relation with external governments and organizations is important because it encourages investment enhancing economic growth and development.The Future of South Africa
The future of South Africa in the next few decades is bright both economically and politically. Judging from the recent elections that were peaceful and democratic; unlike many countries of Africa, the country is moving towards a better economic success. The peaceful political environment in the country is attractive to many investors (Smith, 1990). As a result, projected investments eliminate the pressing challenge of unemployment. The growing tourism industry and infrastructure industries promote the country into higher level of economic growth and development (George, 2008).
South Africa like many other African countries is in the mercantile stage of capitalism as it exports primarily unprocessed products such as agricultural produce and minerals. The anticipated growth in South Africa after the abolition of apartheid was not achieved as the political leaders failed to implement the anticipated political and economic development (Smith, 1990). South Africa after the abolition of apartheid found itself in a deeper ditch of economic inequality. Most, the country's income inequality characterizes the republic of South Africa as the black community lavishes in poverty while the whites enjoy all the comforts of economic success. The country mineral trade boosts its economy with the tourism sector performing relatively well. Recently, the republic of South Africa has hit the headlines with the recent hosting of the world cup in 2010.
Beck, R. B. (2000). The history of South Africa. Westport, Conn.: Greenwood Press.
Bromberger, N. (1978). Mining employment in South Africa, 1946-2000. Cape Town: SA Labour and Development Research Unit.
George, R. (2008). Marketing tourism in South Africa (3rd Ed.). Cape Town: Oxford University Press Southern Africa.
Oppugn, J. R. (2006). Africa south of the Sahara. Philadelphia: Chelsea House Publishers.
Smith, D. M. (1990). Apartheid in South Africa (3rd Ed.). Cambridge: Cambridge University Press.
EuroMonitor International, E. I. (2012). South Africa “The Most Unequal Income Distribution in the World - Analyst Insight from Euromonitor International. Analyst Insight from Euromonitor International. Retrieved June 2, 2014, from http://blog.euromonitor.com/2012/06/south-africa-the-most-unequal-income-distribution-in-the-world.html
SouthAfrica.info. (2012.). SouthAfrica.info. about South Africa: country guide, overview, information. Retrieved June 1, 2014, from http://www.southafrica.info/about/