Country: South Africa Capital: Pretoria Currency: Rand (ZAR) Population: 43,786,115 Government Type: Republic
Key Indicators
2007
2008
2009
Real GDP Growth (%)
4.60
3.00
2.70
Consumer Price Inflation (av;%)
6.52
11.20
7.00
Budget Balance (% of GDP)
.60
.30
.20
Current-Account Balance (% of GDP)
-7.29
-7.90
-8.30
Exchange Rate US$:Euro (av)
7.05
7.75
8.20
Exchange Rate US$:Euro(year-end)
6.86
7.98
8.35
Background
Dutch traders landed at the southern tip of modern day South Africa in 1652 and established a stopover point on the spice route between the Netherlands and the East, founding the city of Cape Town. After the British seized the Cape of Good Hope area in 1806, many of the Dutch settlers (the Boers) trekked north to found their own republics. The discovery of diamonds (1867) and gold (1886) spurred wealth and immigration and intensified the subjugation of the native inhabitants. The Boers resisted British encroachments but were defeated in the Boer War (1899-1902); however, the British and the Afrikaners, as the Boers became known, ruled together under the Union of South Africa. In 1948, the National Party was voted into power and instituted a policy of apartheid - the separate development of the races. The first multi-racial elections in 1994 brought an end to apartheid and ushered in black majority rule.
Economy
South Africa is a middle-income, emerging market with an abundant supply of natural resources; well-developed financial, legal, communications, energy, and transport sectors; a stock exchange that is 17th largest in the world; and modern infrastructure supporting an efficient distribution of goods to major urban centers throughout the region. Growth has been robust since 2004, as South Africa has reaped the benefits of macroeconomic stability and a global commodities boom. However, unemployment remains high and outdated infrastructure has constrained growth. At the end of 2007, South Africa began to experience an electricity crisis because state power supplier Eskom suffered supply problems with aged plants, necessitating "load-shedding" cuts to residents and businesses in the major cities. Daunting economic problems remain from the apartheid era - especially poverty, lack of economic empowerment among the disadvantaged groups, and a shortage of public transportation. South African economic policy is fiscally conservative but pragmatic, focusing on controlling inflation, maintaining a budget surplus, and using state-owned enterprises to deliver basic services to low-income areas as a means to increase job growth and household income.
