DA's Plan for Growth and Jobs - Democratic Alliance

Headcount poverty rate in China, India, Brazil and South Africa (%)6050403020ChinaIndiaBrazilSouth Africa1001993 2000 2008Table 1: Expanding economic opportunities as a result of 8% economic growth or more,coupled with rapid job creation, has seen poverty plummet in China, India and Brazil. Smartsocial policies have furthermore reduced inequality and promoted economic inclusion formillions of poor Brazilians. Poverty in South Africa remains very high. Source: OECDTo address this, Mbeki and Manuel embarked on a wide-ranging policy reform programmecalled Growth, Employment and Redistribution (GEAR). At the heart of GEAR was anunderstanding that the promise of 1994 could only be achieved if South Africa’s financeswere on a sure footing, and if the economy was geared toward achieving high rates ofeconomic growth, which would in turn expand employment opportunities and grow therevenue base.Although GEAR made notable progress in areas such as budget reform; deficit reduction; aconsistent monetary policy; and trade promotion, political pressures conspired to prevent theprogramme from being fully implemented. This was particularly evident in the failure to makesignificant gains in areas such as collective bargaining reform; the restructuring of stateassets; tax incentives; skills development; and infrastructure investment.Nevertheless, economic growth was relatively strong during the 2000s, reaching 5.4% in2006 and 5.1% in 2007. The budget deficit also declined, and South Africa recorded asurplus in both 2006 and 2007. But for millions of ordinary South African, theseimprovements in our country’s economic fundamentals remained abstract notions,unconnected to everyday reality.Poverty continued to be widespread, and many communities, especially in rural areas,continued to lack access to basic services like water, electricity, quality healthcare andeducation. It should be noted, though, that it was during the GEAR period that the SouthAfrican economy registered its first - and only - significant decline in unemployment since1994.22 | P a g e