On April 27, 2014, South Africa celebrated the 20th anniversary of the country’s first multiracial and fully democratic elections, a momentous occasion that signalled the full end of apartheid and the foundation of the modern democratic state. In 1994, newspapers around the world printed headline photos of the long queues that people waited in simply to cast their first ballot – a striking visual representation of the end of the apartheid era.
Since that ballot, South Africa has changed immensely – socially, economically and culturally. In the final years of apartheid, the country was an international pariah; by contrast, the “rainbow nation” is now celebrated as one of the great successful examples of a peaceful transition to democracy, having held four national and provincial elections in the intervening years, all of them without major incident.
On his death in December 2013, the country’s first post-apartheid president, Nelson Mandela, who led the transition, was eulogised as one of the world’s most beloved politicians. Rugby World Cup victories in both 1995 and 2007, and the hosting of the FIFA World Cup in 2010, have also provided encouraging signs of the progress the country has made since the days of division and isolation.
Not Without Challenges
The country has faced its fair share of troubles in recent years, however. It was impacted by the global economic slowdown, which has exacerbated some of its underlying structural problems and complicated efforts to reduce inequality. The challenges have been thrown into relief by the impressive growth seen elsewhere on the African continent, in Tanzania, Ghana and Nigeria for example, the latter of which recently overtook South Africa as the largest African economy.
But South Africa’s challenges must be put into context, for the country has come a long way since 1994, when the majority of its population was formally excluded from politics and its industry cut off from global trade. The past 20 years have seen the country make considerable progress, becoming a heavyweight player in Africa and a key representative of emerging markets through membership in the BRICS group, the G20 and the Organisation for Economic Cooperation and Development.
The improvement is perhaps most evident at the macro level. Nominal dollar-denominated GDP has come close to tripling over the period, from $136bn in 1994 to $345bn in 2012; in real terms, GDP (denominated in rand) has almost doubled. The economy has been expanding at a substantially faster rate under democratic rule; between 1980 and 1994 average annual real GDP growth rates stood at 1.4%, whereas between 1998 and 2012 the figure was at 3.2%.
As a result of such growth, and despite population expansion from around 40m to 52m, nominal dollar-denominated GDP per capita nearly doubled between 1994 and 2012, from $3546 to $7507. This growth in per capita income has seen a significant expansion in the size of the African middle class, whose numbers have doubled between 1993 and 2008 from 7% of the population to 14%, according to a Goldman Sachs report from November 2013.
Furthermore, the proportion of South Africans living in the top half of the country’s living standard bands (the so-called Living Standard Measures, which run from one to 10, with 10 representing the highest standard of living) rose from 48% to 69% between 2001 and 2010, with around 1m people a year moving from the bottom to the top half over the period. The proportion of South Africans living under the poverty line of $2 of income per day has also fallen substantially, from 40% to 31% and the country has built up a much more extensive social safety net, with the number of recipients of social grants increasing from 2.4m to 16.1m over the period.
Average inflation has fallen from a figure of 14% in the 14 years between 1980 and 1994 to 6% in the 20 years to 2013. The tax base has also expanded enormously, from 1.7m people to 13.7m. Partly as a result, the government has found it significantly easier and cheaper to raise international financing, with the country having achieved investment grade ratings for its sovereign debt (which was rated at junk status in 1994), and two-thirds of government debt is now held by foreigners.
Although the country once faced economic isolation in the forms of a (voluntary) international oil embargo and economic sanctions passed by the US government, the rand is now widely regarded as a proxy for emerging market currencies generally, which has helped to give rise to large amounts of portfolio investment by foreigners. Accordingly, levels of gold and foreign reserves have ballooned from $3bn in 1994 to $54.5bn as of February 2014.
The country has also seen significant improvements on a number of key educational, socio-economic and health indicators. The adult literacy rate has increased from 82% in 1996 to 93% in 2011, according to the latest available data from the World Bank, and the proportion of the population with access to an improved water source has risen from 83% in 1994 to 92% in 2011.
Although crime rates remain high, with the country having inherited a murder rate of 65 victims per 100,000 people in 1995 from the apartheid regime, it has nonetheless fallen to less than half of pre-democratic levels (32 per 100,000 in 2010, according to the World Bank). Infant mortality has also come down substantially, from 45 per 1000 live births in 1994 to 33 in 2012, and under-five mortality fell from 59 to 45 over the same period; the latter has seen a particularly sharp drop in the last five years or so. While the health system faces serious problems (see Health chapter), the government has built 700 new health clinics since 1994.
Despite such progress, major challenges continue to exist. Apartheid casts a long shadow and the exclusionary policies of the old South Africa have left the new one with numerous serious structural problems, all of which are being tackled with varying degrees of success.
Most notably, life expectancy at birth, which had been slowly increasing in the final years of apartheid, has fallen from 62 in 1994 to 55 in 2011, according to the latest available data from the World Bank. This is largely as a result of the country’s HIV/AIDS crisis; the HIV infection rate amongst those aged 15-49 stood at 15.9% in 2013 (up from 3.1% in 1994). However, following rapid growth in the 1990s, the HIV infection rate appears to have largely stabilised. With the increasing availability of anti-retroviral drugs – anti-retroviral therapy coverage rocketed to 80% in 2012, according to the World Bank figures, nearly double the 2004 figure – overall life expectancy is now thankfully on the rise again.
The country has also become even more unequal economically, a phenomenon that has dampened the rate at which faster economic growth has allowed poorer South Africans to join the middle classes. The country’s Gini Index rose from 59.3 in 1993 and 56.6 in 1995 to 63.1 in 2009 (a rating of zero means perfect equality and 100 is equivalent to perfect inequality), making it one of the most unequal countries in the world. According to the National Planning Commission, the poorest 20% of South Africans earn just 2.3% of national income, while the richest 20% earn 70% of national income. Racial inequalities still remain extremely high, with 85% of black South Africans classed as poor, compared to 17% of white South Africans.
The unemployment rate, which was already high during the apartheid era, has risen slightly, from 22.9% in 1994 to 25.1% in 2012, according to IMF data. The National Planning Commission places much of the blame for high unemployment on the legacy of colonialism and apartheid, citing factors such as the denial of Africans’ rights to own land and run businesses, and the poor quality of education available to black South Africans under the racist regime.
The South African authorities are aware of the issues that the country faces – the diagnostic section of the National Development Plan (NDP), for example, identifies many of these clearly and frankly – and have long-term plans to deal with them. The NDP in particular aims to eliminate poverty, slash unemployment, boost economic growth and reduce inequality by 2030. While the plan is highly ambitious, the authorities are hoping that it will succeed in ridding the country of many of the most pernicious and persistent legacies of apartheid.
Ultimately, it will take time and not an inconsiderable amount of effort to completely undo the negative consequences of apartheid, but the strides South Africa has taken over the past 20 years in reversing the damage done to its economy and its population certainly provide a measure of hope. As other African nations continue to struggle to overcome the damaging legacy of colonialism, South Africa is a shining example of what can be possible.
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