The Politics and Economics behind South Africa.

WRITTEN BY : SHARANYA RAMESH
ROLL NUMBER - 3760

As an emerging economy, South Africa has not remained completely unaffected by the turmoil in other emerging economies world-wide, especially in Asia, and lately also in Russia. This negatively affected investor confidence in these countries. However, while examining the various political and economic factors of South Africa and how the country functions under various conditions.
South Africa's peaceful and stable transition to democracy, universally recognised as one of the major achievements of the 20th Century, is not a coincidence or a mere short-term success: the realities in South Africa, which made this miraculous transition possible, are still in place and guarantee future stability. Political stability is the key to investor confidence, especially in today's world.
Fundamental political transitions are almost inevitably volatile. It therefore comes as no surprise that the period since the April 1994 elections saw–amid the overall sense of achievement and increasing goodwill–moments of political uncertainty and tension. In general, however, political stability increased as constitutional democracy became more entrenched.
This can be seen by looking at three aspects.

- The adoption of the new constitution in 1996: the new constitution, which became supreme law of the land on 4 February last year, is a model of democracy, and entrenches a separation of powers and fundamental human rights. Furthermore, the negotiations towards its adoption confirmed the ability of South Africans to resolve their differences peacefully and their commitment to make the new democracy work.

- The successful local government elections: voters in seven provinces elected their local representatives in a calm and well-structured process in 1995. In 1996 local voters in the strife-torn Kwazulu-Natal Province went to the polls as political obstacles prevented them from doing so in 1995. This Kwazulu-Natal local government election became yet another chapter in the South African democratic miracle. Not only was it procedurally smooth, but it produced significantly diverse results amid a very low incidence of political violence.

- Developments around the ANC leadership: over the first three years of post-apartheid South Africa, local and foreign observers repeatedly expressed fears about the process of succession, and uncertainty about the country's prospects thereafter during the so-called "post-Mandela era".

The government announced (Growth, Employement and Redistribution Strategy)GEAR as the cornerstone of its macroeconomic policy in June 1996. GEAR is a total strategy aiming at a competitive, fast growing and job-creating economy; redistribution of resources and creation of opportunities for the poor as well as provision of accessible health, education and housing facilities. The strategy entails budgetary reform and deficit reduction; trade liberalisation and tariff reform; flexible labour market strategies; renewed infrastructure investment; tax incentives to attract investment; and a commitment to co-ordinated policies.

South Africa has proved time and again, that through religious, social and infrastructural conflicts, the country's political and economic stability has only grown.