Area: 1.2 million sq. km. (470,462 sq. mi.).
Cities: Capitals--administrative, Pretoria; legislative, Cape Town; judicial, Bloemfontein.
Other cities--Johannesburg, Durban, Port Elizabeth.
Terrain: Plateau, savanna, desert, mountains, coastal plains.
Climate: moderate; comparable to southern California.
Area: 1.2 million sq. km. (470,462 sq. mi.).
Cities: Capitals--administrative, Pretoria; legislative, Cape Town; judicial, Bloemfontein.
Other cities--Johannesburg, Durban, Port Elizabeth.
Terrain: Plateau, savanna, desert, mountains, coastal plains.
Climate: moderate; comparable to southern California.
Nationality: Noun and adjective--South African(s).
Population (2011): 50.59 million. Composition--black 79.5%; white 9%; colored 9%; Asian (Indian) 2.5%. (2011 Mid-Year Population Estimate Report at http://www.statssa.gov.za )
Annual population growth rate (2010): 1.1%.
Languages: Afrikaans, English, isiNdebele, isiXhosa, isiZulu, Sepedi, Sesotho, Setswana, siSwati, Tshivenda, and Xitsonga (all official languages).
Religions: Predominantly Christian; traditional African, Hindu, Muslim, Jewish.
Education: Years compulsory--7-15 years of age for all children. The South African Schools Act (Act 84), passed by Parliament in 1996, aims to achieve greater educational opportunities for black children. This Act mandated a single syllabus and more equitable funding for schools.
Health: Infant mortality rate (2011)--37.9 per 1,000 live births. Life expectancy--59.1 years women; 54.9 years men. (Health data from 2011 Mid-Year Population Estimate Report:http://www.statssa.gov.za )
Type: Parliamentary democracy.
Independence: The Union of South Africa was created on May 31, 1910; became a sovereign state within British Empire in 1934; became a republic on May 31, 1961; left the Commonwealth in October 1968; rejoined the Commonwealth in June 1994.
Constitution: Entered into force February 3, 1997.
Branches: Executive--president (chief of state) elected to a 5-year term by the National Assembly. Legislative--bicameral Parliament consisting of 490 members in two chambers. National Assembly (400 members) elected by a system of proportional representation. National Council of Provinces consisting of 90 delegates (10 from each province) and 10 nonvoting delegates representing local government. Judicial--Constitutional Court interprets and decides constitutional issues; Supreme Court of Appeal is the highest court for interpreting and deciding nonconstitutional matters.
Administrative subdivisions: Nine provinces: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Mpumalanga, North-West, Northern Cape, Limpopo, Western Cape.
Political parties: African National Congress (ANC), Democratic Alliance (DA), Congress of the People (COPE), Inkatha Freedom Party (IFP), Pan-African Congress (PAC), Vryheidsfront Plus/Freedom Front Plus (FF+), United Democratic Movement (UDM), African Christian Democratic Party (ACDP), and Azanian Peoples Organization (Azapo).
Suffrage: Citizens and permanent residents 18 and older.
GDP (2010): $357.3 billion.
Real GDP growth rate: (2008) 3.7%; (2009) -1.8%; (2010) 2.8%.
GDP per capita (2010): $10,700.
Unemployment (second quarter 2011): 25.7%.
Natural resources: Almost all essential commodities, except petroleum products and bauxite. It is the only country in the world that manufactures fuel from coal.
Industry: Types--minerals, mining, motor vehicles and parts, machinery, textiles, chemicals, fertilizer, information technology, electronics, other manufacturing, and agro-processing.
Trade (2010): Exports--$85.8 billion; merchandise exports: minerals and metals, motor vehicles and parts, agricultural products. Major markets--China, U.S., Japan, Germany, U.K., Sub-Saharan Africa. Imports--$81.86 billion: machinery, transport equipment, chemicals, petroleum products, textiles, and scientific instruments. Major suppliers--China, Germany, U.S., Saudi Arabia, Japan.
GDP composition (2010): Agriculture--2%; industry--30.8%; services--66.7%. South Africa is one of the largest producers of platinum, manganese, gold, and chrome in the world; also significant coal production.
Prior to 1991, South African law divided the population into four major racial categories: Africans (black), whites, coloreds, and Asians. Although this law has been abolished, many South Africans still view themselves and each other according to these categories. Black Africans comprise about 80% of the population and are divided into a number of different ethnic groups. Whites comprise 9% of the population. They are primarily descendants of Dutch, French, English, and German settlers who began arriving at the Cape of Good Hope in the late 17th century. Coloreds are mixed-race people primarily descending from the earliest settlers and the indigenous peoples. They comprise 9% of the total population. Asians are descended from Indian workers brought to South Africa in the mid-19th century to work on the sugar estates in Natal. They constitute about 2.5% of the population and are concentrated in the KwaZulu-Natal Province.
Education is in transition. Under the apartheid system schools were segregated, and the quantity and quality of education varied significantly across racial groups. The laws governing this segregation have been abolished. The long and arduous process of restructuring the country's educational system is ongoing. The challenge is to create a single, nondiscriminatory, nonracial system that offers the same standards of education to all people.
People have inhabited southern Africa for thousands of years. Members of the Khoisan language groups are the oldest surviving inhabitants of the land, but only a few are left in South Africa today--and they are located in the western sections. Most of today's black South Africans belong to the Bantu language group, which migrated south from central Africa, settling in the Transvaal region sometime before AD 100. The Nguni, ancestors of the Zulu and Xhosa, occupied most of the eastern coast by 1500.
The Portuguese were the first Europeans to reach the Cape of Good Hope, arriving in 1488. However, permanent white settlement did not begin until 1652 when the Dutch East India Company established a provisioning station on the Cape. In subsequent decades, French Huguenot refugees, the Dutch, and Germans began to settle in the Cape. Collectively, they form the Afrikaner segment of today's population. The establishment of these settlements had far-reaching social and political effects on the groups already settled in the area, leading to upheaval in these societies and the subjugation of their people.
By 1779, European settlements extended throughout the southern part of the Cape and east toward the Great Fish River. It was here that Dutch authorities and the Xhosa fought the first frontier war. The British gained control of the Cape of Good Hope at the end of the 18th century. Subsequent British settlement and rule marked the beginning of a long conflict between the Afrikaners and the English.
Beginning in 1836, partly to escape British rule and cultural hegemony and partly out of resentment at the recent abolition of slavery, many Afrikaner farmers (Boers) undertook a northern migration that became known as the "Great Trek." This movement brought them into contact and conflict with African groups in the area, the most formidable of which were the Zulus. Under their powerful leader, Shaka (1787-1828), the Zulus conquered most of the territory between the Drakensberg Mountains and the sea (now KwaZulu-Natal).
In 1828, Shaka was assassinated and replaced by his half-brother Dingane. In 1838, Dingane was defeated and deported by the Voortrekkers (people of the Great Trek) at the battle of Blood River. The Zulus, nonetheless, remained a potent force, defeating the British in the historic battle of Isandhlwana before themselves being finally conquered in 1879.
In 1852 and 1854, the independent Boer Republics of the Transvaal and Orange Free State were created. Relations between the republics and the British Government were strained. The discovery of diamonds at Kimberley in 1870 and the discovery of large gold deposits in the Witwatersrand region of the Transvaal in 1886 caused an influx of European (mainly British) immigration and investment. In addition to resident black Africans, many blacks from neighboring countries also moved into the area to work in the mines. The construction by mine owners of hostels to house and control their workers set patterns that later extended throughout the region.
Boer reactions to this influx and British political intrigues led to the Anglo-Boer Wars of 1880-81 and 1899-1902. British forces prevailed in the latter conflict, and the republics were incorporated into the British Empire. In May 1910, the two republics and the British colonies of the Cape and Natal formed the Union of South Africa, a self-governing dominion of the British Empire. The Union's constitution kept all political power in the hands of whites.
In 1912, the South Africa Native National Congress was founded in Bloemfontein and eventually became known as the African National Congress (ANC). Its goals were the elimination of restrictions based on color and the enfranchisement of and parliamentary representation for blacks. Despite these efforts the government continued to pass laws limiting the rights and freedoms of blacks.
In 1948, the National Party (NP) won the all-white elections and began passing legislation codifying and enforcing an even stricter policy of white domination and racial separation known as "apartheid" (separateness). In the early 1960s, following a protest in Sharpeville in which 69 protesters were killed by police and 180 injured, the ANC and Pan-African Congress (PAC) were banned. Nelson Mandela and many other anti-apartheid leaders were convicted and imprisoned on charges of treason.
The ANC and PAC were forced underground and fought apartheid through guerrilla warfare and sabotage. In May 1961, South Africa abandoned its British dominion status and declared itself a republic. It withdrew from the Commonwealth in part because of international protests against apartheid. In 1984, a new constitution came into effect in which whites allowed coloreds and Asians a limited role in the national government and control over their own affairs in certain areas. Ultimately, however, all power remained in white hands. Blacks remained effectively disenfranchised.
Popular uprisings in black and colored townships in 1976 and 1985 helped to convince some NP members of the need for change. Secret discussions between those members and Nelson Mandela began in 1986. In February 1990, State President F.W. de Klerk, who had come to power in September 1989, announced the unbanning of the ANC, the PAC, and all other anti-apartheid groups. Two weeks later, Nelson Mandela was released from prison.
In 1991, the Group Areas Act, Land Acts, and the Population Registration Act--the last of the so-called "pillars of apartheid"--were abolished. A long series of negotiations ensued, resulting in a new constitution promulgated into law in December 1993. The country's first nonracial elections were held on April 26-28, 1994, resulting in the installation of Nelson Mandela as President on May 10, 1994.
Following the 1994 elections, South Africa was governed under an interim constitution establishing a Government of National Unity (GNU). This constitution required the Constitutional Assembly (CA) to draft and approve a permanent constitution by May 9, 1996. After review by the Constitutional Court and intensive negotiations within the CA, the Constitutional Court certified a revised draft on December 2, 1996. President Mandela signed the new constitution into law on December 10, and it entered into force on February 3, 1997. The GNU ostensibly remained in effect until the 1999 national elections. The parties originally comprising the GNU--the ANC, the NP, and the Inkatha Freedom Party (IFP)--shared executive power. On June 30, 1996, the NP withdrew from the GNU to become part of the opposition.
During Nelson Mandela's 5-year term as President of South Africa, the government committed itself to reforming the country. The ANC-led government focused on social issues that were neglected during the apartheid era such as unemployment, housing shortages, and crime. Mandela's administration began to reintroduce South Africa into the global economy by implementing a market-driven economic plan known as Growth, Employment and Redistribution (GEAR). In order to heal the wounds created by apartheid, the government created the Truth and Reconciliation Commission (TRC) under the leadership of Archbishop Desmond Tutu. During the first term of the ANC's post-apartheid rule, President Mandela concentrated on national reconciliation, seeking to forge a single South African identity and sense of purpose among a diverse and splintered populace, after years of conflict. The diminution of political violence after 1994 and its virtual disappearance by 1996 were testament to the abilities of Mandela to achieve this difficult goal.
Nelson Mandela stepped down as President of the ANC at the party's national conference in December 1997, when Thabo Mbeki assumed the mantle of leadership. Mbeki won the presidency of South Africa after national elections in 1999, when the ANC won just shy of a two-thirds majority in Parliament. President Mbeki shifted the focus of government from reconciliation to transformation, particularly on the economic front. With political transformation and the foundation of a strong democratic system in place after two free and fair national elections, the ANC recognized the need to focus on bringing economic power to the black majority in South Africa. In April 2004, the ANC won nearly 70% of the national vote, and Mbeki was reelected for his second 5-year term. In his 2004 State of the Nation address, Mbeki promised his government would reduce poverty, stimulate economic growth, and fight crime. Mbeki said that the government would play a more prominent role in economic development. Defeated in a bid for a third term as ANC chair in party elections in December 2007, Mbeki was "recalled" by the ANC and resigned as President in September 2008. Kgalema Motlanthe was sworn in as President on September 25, 2008 and served out the remainder of Mbeki's term. South Africa held its fourth democratic election on April 22, 2009. The ANC won with 65% of the vote followed by the Democratic Alliance (DA) with 16% of the vote. The DA also won power in the Western Cape, which became the only province that the ANC does not govern. The newly formed Congress of the People, launched by
ANC members angered at the firing of Mbeki, won 9% of the vote. The National Assembly elected Jacob Zuma president, with Motlanthe as his deputy, following the ANC’s win in the 2009 national election.
South Africa held its fourth post-apartheid local government elections on May 18, 2011. The elections were peaceful and well organized. While the International Electoral Commission (IEC) struggled with some minor technical glitches and mishaps, voting was orderly. The African National Congress (ANC) held onto its dominant position nationally with an estimated 64% of the vote, while the Democratic Alliance (DA), the nation’s major opposition party, saw growth in its voter base, winning an estimated 22% of the vote. The ANC is set to hold its national conference in 2012, where its leader for the next 5 years will be elected.
GOVERNMENT AND POLITICAL CONDITIONS
South Africa is a multiparty parliamentary democracy in which constitutional power is shared between the president and the Parliament.
The Parliament consists of two houses, the National Assembly and the National Council of Provinces, which are responsible for drafting the laws of the republic. The National Assembly also has specific control over bills relating to monetary matters. The current 400-member National Assembly was retained under the 1997 constitution, although the constitution allows for a range of between 350 and 400 members. The Assembly is elected by a system of "list proportional representation." Each of the parties appearing on the ballot submits a rank-ordered list of candidates. The voters then cast their ballots for a party.
Seats in the Assembly are allocated based on the percentage of votes each party receives. In the 2009 election, the ANC won 264 seats in the Assembly, just shy of a two-thirds majority and a decrease of 33 seats from 2004; the Democratic Alliance (DA) won 67, the newly formed Congress of the People (COPE) won 30, and the IFP won 18. Smaller parties won the remaining 21 seats.
The National Council of Provinces (NCOP) consists of 90 members, 10 from each of the nine provinces. The NCOP replaced the former Senate as the second chamber of Parliament and was created to give a greater voice to provincial interests. It must approve legislation that involves shared national and provincial competencies as defined by an annex to the constitution. Each provincial delegation consists of six permanent and four rotating delegates.
The president is the head of state, and is elected by the National Assembly from among its members. The president's constitutional responsibilities include assigning cabinet portfolios, signing bills into law, and serving as commander in chief of the military. The president works closely with the deputy president and the cabinet.
The third arm of the central government is an independent judiciary. The Constitutional Court is the highest court for interpreting and deciding constitutional issues, while the Supreme Court of Appeal is the highest court for nonconstitutional matters. Most cases are heard in the extensive system of High Courts and Magistrates Courts. The constitution's bill of rights provides for due process including the right to a fair, public trial within a reasonable time of being charged and the right to appeal to a higher court. The bill of rights also guarantees fundamental political and social rights of South Africa's citizens.
South Africa's post-apartheid governments have made remarkable progress in consolidating the nation's peaceful transition to democracy. Programs to improve the delivery of essential social services to the majority of the population are underway. Access to better opportunities in education and business is becoming more widespread. Nevertheless, transforming South Africa's society to remove the legacy of apartheid will be a long-term process requiring the sustained commitment of the leaders and people of the nation's disparate groups.
The Truth and Reconciliation Commission (TRC), chaired by 1984 Nobel Peace Prize winner Archbishop Desmond Tutu, helped to advance the reconciliation process. Constituted in 1995 and having completed its work by 2001, the TRC was empowered to investigate apartheid-era human rights abuses committed between 1960 and May 10, 1994; to grant amnesty to those who committed politically motivated crimes; and to recommend compensation to victims of abuses. In November 2003, the government began allocation of $4,600 (R30,000) reparations to individual apartheid victims. The TRC's mandate was part of the larger process of reconciling the often conflicting political, economic, and cultural interests held by the diverse groups of people that make up South Africa's population. The ability of the government and people to agree on many basic questions of how to order the country's society will remain a critical challenge.
One important issue continues to be the relationship of provincial and local administrative structures to the national government. Prior to April 27, 1994, South Africa was divided into four provinces and 10 black "homelands," four of which were considered independent by the South African Government. Both the interim constitution and the 1997 constitution abolished this system and substituted nine provinces. Each province has an elected legislature and chief executive--the provincial premier. Although in form a federal system, in practice the nature of the relationship between the central and provincial governments continues to be the subject of considerable debate, particularly among groups desiring a greater measure of autonomy from the central government. A key step in defining the relationship came in 1997 when provincial governments were given more than half of central government funding and permitted to develop and manage their own budgets. Although South Africa's economy is in many areas highly developed, the exclusionary nature of apartheid and distortions caused in part by the country's international isolation until the 1990s have left major weaknesses. The economy is in a process of transition as the government seeks to address the inequities of apartheid, stimulate growth, and create jobs. Business, meanwhile, is becoming more integrated into the international system, and foreign investment has increased. Still, the economic disparities between population groups are expected to persist for many years, remaining an area of priority attention for the government.
The 1997 constitution's bill of rights provides extensive guarantees, including equality before the law and prohibitions against discrimination; the right to life, privacy, property, and freedom and security of the person; prohibition against slavery and forced labor; and freedom of speech, religion, assembly, and association. The legal rights of criminal suspects also are enumerated, as are citizens' entitlements to a safe environment, housing, education, and health care. The constitution provides for an independent and impartial judiciary, and, in practice, these provisions are respected.
Since the abolition of apartheid, levels of political violence in South Africa have dropped dramatically. Violent crime and organized criminal activity are at high levels and are a grave concern. Partly as a result, vigilante action and mob justice sometimes occur.
Some members of the police commit abuses, and deaths in police custody as a result of excessive force remain a problem. The government has taken action to investigate and punish some of those who commit such abuses. In April 1997, the government established an Independent Complaints Directorate to investigate deaths in police custody and deaths resulting from police action.
Although South Africa's society is undergoing a rapid transformation, some discrimination against women continues, and discrimination against those living with HIV/AIDS remains. Violence against women and children also is a serious problem.
South Africa has the world’s highest rate of rape and sexual assault for any country not embroiled in conflict. By some estimates, a woman in South Africa is raped every 26 seconds. The United States is committed to helping South Africa stem this epidemic of gender-based violence and assist the thousands of women and children affected. Through a national network of Thuthuzela Care Centers, the United States assists 10,000 victims of sexual violence annually with medical and legal help and counseling.
Through robust educational and cultural exchanges, the United States and South Africa are building connections between the young leaders of tomorrow. In 2010, 24 South African students traveled to the U.S. as part of the Youth Leadership Program. Twenty-seven students traveled to the United States to spend a year studying at community colleges, and 190 students improved their English through the micro-access scholarship program. The United States sponsored 82 South African scholars through the Fulbright Program in 2010.
Principal Government Officials
State President--Jacob Zuma
Executive Deputy President--Kgalema Motlanthe
Minister of Agriculture, Forestry and Fisheries--Tina Joemat-Pettersson
Minister of Arts and Culture--Paul Mashatile
Minister of Basic Education--Matsie Angelina Motshekga
Minister of Communications--Dina Pule
Minister of Cooperative Governance and Traditional Affairs--Richard Baloyi
Minister of Correctional Services--Nosiviwe Mapisa-Nqakula
Minister of Defence and Military Veterans--Lindiwe Sisulu
Minister of Economic Development--Ebrahim Patel
Minister of Energy--Elizabeth Dipuo Peters
Minister of Finance--Pravin Gordhan
Minister of Health--Pakishe Aaron Motsoaledi
Minister of Higher Education and Training--Bonginkosi Emmanuel Nzimande
Minister of Home Affairs--Nkosazana Dlamini-Zuma
Minister of Human Settlements--Tokyo Sexwale
Minister of International Relations and Cooperation--Maite Nkoana-Mashabane
Minister of Justice and Constitutional Development--Jeffrey Radebe
Minister of Labour--Mildred Oliphant
Minister of Mineral Resources--Susan Shabangu
Minister of Police--Nathi Mthethwa
Minister of Public Enterprises--Malusi Gigaba
Minister for the Public Service and Administration--Roy Padayachie
Minister of Public Works--Thembelani Nxesi
Minister of Rural Development and Land Reform--Gugile Nkwinti
Minister of Science and Technology--Grace Naledi Pandor
Minister of Social Development--Bathabile Dlamini
Minister of Sport and Recreation--Fikile Mbalula
Minister of State Security--Siyabonga Cwele
Minister in The Presidency for National Planning Commission--Trevor Manuel
Minister in The Presidency for Performance Monitoring and Evaluation--Ohm Collins Chabane
Minister of Tourism--Marthinus van Schalkwyk
Minister of Trade and Industry--Rob Davies
Minister of Transport--Joel Sbusiso Ndebele
Minister of Water and Environmental Affairs--Edna Molewa
Minister of Women, Youth, Children and People with Disabilities--Lulu Xingwana
The Republic of South Africa maintains an embassy in the United States at 3051 Massachusetts Avenue NW, Washington, DC 20008; tel. (202) 232-4400.
South Africa has a two-tiered economy; one rivaling other developed countries and the other with only the most basic infrastructure. It therefore is a productive and industrialized economy that exhibits many characteristics associated with developing countries, including a division of labor between formal and informal sectors, and uneven distribution of wealth and income. The formal sector, based on mining, manufacturing, services, and agriculture, is well developed.
The transition to a democratic, nonracial government, begun in early 1990, stimulated a debate on the direction of economic policies to achieve sustained economic growth while at the same time redressing the socioeconomic disparities created by apartheid. The Government of National Unity's initial blueprint to address this problem was the Reconstruction and Development Program (RDP). The RDP was designed to create programs to improve the standard of living for the majority of the population by providing housing--a planned 1 million new homes in 5 years--basic services, education, and health care. While a specific "ministry" for the RDP no longer exists, a number of government ministries and offices are charged with supporting RDP programs and goals.
The Government of South Africa demonstrated its commitment to open markets, privatization, and a favorable investment climate with its release of the crucial Growth, Employment and Redistribution (GEAR) strategy--the neoliberal economic strategy to cover 1996-2000. The strategy had mixed success. It brought greater financial discipline and macroeconomic stability but failed to deliver in key areas. Formal employment continued to decline, and despite the ongoing efforts of black empowerment and signs of a fledgling black middle class and social mobility, the country's wealth remains very unequally distributed along racial lines. However, South Africa's budgetary reforms such as the Medium-Term Expenditure Framework and the Public Finance Management Act--which aims at better reporting, auditing, and increased accountability--and the structural changes to its monetary policy framework, including inflation targeting, have created transparency and predictability and are widely acclaimed. Trade liberalization also has progressed substantially since the early 1990s. South Africa reduced its import-weighted average tariff rate from more than 20% in 1994 to 7% in 2002. These efforts, together with South Africa's implementation of its World Trade Organization (WTO) obligations and its constructive role in launching the Doha Development Round, show South Africa's acceptance of free market principles.
South Africa has a sophisticated financial structure with a large and active stock exchange that ranks 17th in the world in terms of total market capitalization. The South African Reserve Bank (SARB) performs all central banking functions. The SARB is independent and operates in much the same way as Western central banks, influencing interest rates and controlling liquidity through its interest rates on funds provided to private sector banks. Quantitative credit controls and administrative control of deposit and lending rates have largely disappeared. South African banks adhere to the Bank of International Standards core standards.
The South African Government has taken steps to gradually reduce remaining foreign exchange controls, which apply only to South African residents. Private citizens are now allowed a one-time investment of up to 2,000,000 rand (R) in offshore accounts. During 2007, the shareholding threshold (the percentage of shareholding that must be South African) for foreign direct investment outside Africa was lowered from 50% to 25% to enable South African companies to engage in strategic international partnerships. In addition, South African companies involved in international trade were permitted to operate a single Customer Foreign Currency (CFC) account for all international transactions. Permission was also granted to the Johannesburg Securities Exchange (JSE) to establish a rand currency futures market, in order to deepen South Africa’s financial markets and increase liquidity in the local foreign exchange market.
Impact of the 2010 FIFA World Cup
On May 15, 2004, South Africa was awarded with the winning bid to host the 2010 FIFA World Cup, becoming the first African nation to serve as host for the international football (soccer) competition. Nine cities hosted matches for the event: Johannesburg (with two stadiums), Cape Town, Pretoria, Durban, Port Elizabeth, Bloemfontein, Rustenburg, Nelspruit, and Polokwane. With a large number of tourists expected to arrive and travel throughout the country for the event, attention focused on improving transportation. Americans purchased the largest number of tickets from overseas. South Africa's transportation infrastructure is well developed, supporting both domestic and regional needs. Johannesburg’s O.R. Tambo International Airport serves as a hub for flights to other southern African countries. Billions were spent to upgrade international airports and national roads for the 2010 FIFA World Cup. The first segment of the Johannesburg-Pretoria urban rapid rail Gautrain, linking O.R. Tambo airport to the northern Johannesburg office node of Sandton began operations June 8. A brand-new international airport and trade port opened in Durban in May 2010. Bus-rapid-transit (BRT) systems for the World Cup host cities were also created, but faced strong opposition from existing minibus/taxi operators who feared the competition.
The 2010 World Cup was the largest event ever to be held on the African continent. In preparation, South Africa spent over $5 billion on building and improving stadiums and transportation systems, and ensuring that security measures were up to par for the event. By the end of the competition on July 11, over 3.18 million fans had attended the 64 matches, the third-highest turnout in FIFA’s history (falling short of the records held by Germany and the U.S.). The World Cup was expected to add an additional 0.5% to South Africa’s 2010 GDP growth, fully an additional $5 billion (R35 billion) to GDP, according to South African Finance Minister Pravin Gordhan.
Trade and Investment
South Africa has rich mineral resources. It is the world's largest producer and exporter of platinum; is a significant producer of gold, manganese, chrome, vanadium, and titanium; and also exports a significant amount of coal. During 2000, platinum overtook gold as South Africa's largest foreign exchange earner. The value-added processing of minerals to produce ferroalloys, stainless steels, and similar products is a major industry and an important growth area. The country's diverse manufacturing industry is a world leader in several specialized sectors, including motor vehicles and parts, railway rolling stock, synthetic fuels, and mining equipment and machinery.
Primary agriculture accounts for about 2.5% of the gross domestic product. Major crops include citrus and deciduous fruits, corn, wheat, dairy products, sugarcane, tobacco, wine, and wool. South Africa has many developed irrigation schemes and is a net exporter of food.
The domestic telecommunications infrastructure provides modern and efficient service to urban areas, but at comparatively high costs and with limited coverage in rural areas. South Africa has made some strides towards liberalizing its telecommunication market; however, many obstacles exist for further progress. The passing of the Electronic Communications Act (ECA) of 2005 marked a new regulatory framework for liberalizing the telecommunication market in South Africa. Established entities such as Telkom and Multi-choice secured market-share under prior monopoly regimes, which make it difficult for new entrants to offer competitive telecommunications services (e.g. pay-TV and internet). The U.S.-led SEACOM project is the first of a series of undersea cable projects to become operational. SEACOM provides the first access to true broadband connectivity for countries on Africa’s eastern seaboard, which were previously 100% reliant on Telkom's expensive satellite-based technology. SEACOM's landing stations operate on a market-based, "open-access" system.
Annual GDP growth between 2004 and 2007 averaged 5.0%, but fell to a rate of 3.7% in 2008 because of higher interest rates, power shortages, and weakening commodities prices. GDP contracted by 1.8% in 2009 as South Africa experienced its first recession in 18 years. Growth of 2.8% returned in 2010. The government estimated that the economy must achieve growth at a minimum of 6% to offset unemployment, which was estimated at 25.7% in July 2011. Inflation averaged 11.3% in 2008 and 7.2% in 2009. Increasing food and fuel prices pushed inflation above the upper end of the South African Reserve Bank’s (SARB’s) 3% to 6% inflation target range for the better part of 2007 and 2008. Inflation started to decline in 2009. A central inflation forecast by the SARB projected that inflation would continue its downward trajectory and return to the 3% to 6% target range in the second half of 2010. Inflation was expected to average 5.8% and 5.6% in 2010 and 2011, respectively. The SARB reduced interest rates at regular intervals from December 2008. The cumulative reduction through August 2009 was 500 basis points, bringing the prime overdraft rate to 10.5%. Subsequently over late 2009 and early 2010, the Reserve Bank left interest rates unchanged. The government managed to eliminate the fiscal deficit in FY 2007 and FY 2008. However, a fiscal deficit of 1.2% of GDP was recorded in FY 2009, mainly due to the impact of weak domestic demand and the global economic crisis on tax revenues. The fiscal deficit was expected to increase to 6.7% of GDP in 2009-2010, according to the Finance Minister's February 2010 budget speech.
Exports amounted to 24% of GDP in 2010. South Africa's major trading partners include China, Germany, the United States, Japan, and the United Kingdom. Japan displaced the U.S. as South Africa's largest export market in 2008, and China overtook both in 2009. South Africa's trade with other Sub-Saharan African countries, particularly those in the southern Africa region, has increased substantially. South Africa is a member of the Southern African Customs Union (SACU) and the Southern African Development Community (SADC). In August 1996, South Africa signed a regional trade protocol agreement with its SADC partners. The agreement was ratified in December 1999, and implementation began in September 2000. It provided duty-free treatment for 85% of trade in 2008 and aims for 100% by 2012. A U.S.-SACU Trade, Investment and Development Cooperative Agreement was signed in July 2008. The four areas singled out for special attention under the TIDCA are customs cooperation, technical barriers to trade, sanitary/phytosanitary (SPS) issues, and trade and investment promotion.
South Africa has made great progress in dismantling its old economic system, which was based on import substitution, high tariffs and subsidies, anticompetitive behavior, and extensive government intervention in the economy. The leadership has moved to reduce the government's role in the economy and to promote private sector investment and competition. It has significantly reduced tariffs and export subsidies, loosened exchange controls, cut the secondary tax on corporate dividends, and improved enforcement of intellectual property laws. A competition law was passed and became effective on September 1, 1999. A U.S.-South Africa bilateral tax treaty went into effect on January 1, 1998, and a bilateral trade and investment framework agreement was signed in February 1999.
South Africa is a member of the World Trade Organization (WTO). U.S. products qualify for South Africa's most-favored-nation tariff rates. South Africa is also an eligible country for the benefits under the African Growth and Opportunity Act (AGOA), and most of its products can enter the United States market duty free. South Africa has done away with most import permits except on used products and products regulated by international treaties. It also remains committed to the simplification and continued reduction of tariffs within the WTO framework and maintains active discussions with that body and its major trading partners.
As a result of a November 1993 bilateral agreement, the Overseas Private Investment Corporation (OPIC) can assist U.S. investors in the South African market with services such as political risk insurance and loans and loan guarantees. In July 1996, the United States and South Africa signed an investment fund protocol for a $120 million OPIC fund to make equity investments in South Africa and southern Africa. The Trade and Development Agency also has been actively involved in funding feasibility studies and identifying investment opportunities in South Africa for U.S. businesses.
South Africa has one of the highest rates of HIV prevalence in the world, with more than 5 million HIV-infected individuals. Overall, 11.8% of the population is infected. The prevalence rate among 15-49 year olds is 18.1%, and in parts of the country more than 35% of women of childbearing age are infected. About 1,000 new infections occur each day, and approximately 350,000 AIDS-related deaths occur annually. There are approximately 3.8 million children who have lost one or both parents, and 1.6 million children were expected to have been orphaned by AIDS by 2008. The marked rise in TB and HIV co-infection (with 50% co-infection rates) adds significantly to mortality in the country. South Africa has 0.7% of the world’s population, 17% of the global HIV epidemic, and 28% of global HIV and TB co-infected people. It was expected that the epidemic could cost South Africa as much as 17% in GDP growth by 2010, with the extraction industries, education, and health among the sectors that would be severely affected. A 2007-2011 national strategic plan provides the structure for a comprehensive response to HIV and AIDS, including a national rollout of antiretroviral therapy. Overall, 30% of those who need it are currently on antiretroviral therapy.
South Africa's government is committed to managing the country's rich and varied natural resources in a responsible and sustainable manner. In addition, numerous South African non-governmental organizations have emerged as a potent force in the public policy debate on the environment. In international environmental organizations, South Africa is seen as a key leader among developing countries on issues such as climate change, conservation, and biodiversity. This leading role was underscored by South Africa's selection to host the World Summit on Sustainable Development in 2002 and the 17th session of the UN Convention Framework on Climate Change (COP-17) in Durban in 2011.
South African forces fought on the Allied side in World Wars I and II and participated in the postwar UN force in Korea. South Africa was a founding member of the League of Nations and in 1927 established a Department of External Affairs with diplomatic missions in the main west European countries and in the United States. At the founding of the League of Nations, South Africa was given the mandate to govern Southwest Africa, now Namibia, which had been a German colony before World War I. In 1990, Namibia attained independence, with the exception of the enclave of Walvis Bay, which was reintegrated into Namibia in March 1994. After South Africa held its first nonracial election in April 1994, most sanctions imposed by the international community in opposition to the system of apartheid were lifted. On June 1, 1994, South Africa rejoined the Commonwealth, and on June 23, 1994, the UN General Assembly accepted its credentials. South Africa served as the African Union's (AU) first president from July 2003 to July 2004.
Having emerged from the international isolation of the apartheid era, South Africa has become a leading international actor. Its principal foreign policy objective is to promote the economic, political, and cultural regeneration of Africa, through the New Partnership for African Development (NEPAD); to promote the peaceful resolution of conflict in Africa; and to use multilateral bodies to insure that developing countries' voices are heard on international issues. South Africa has played a key role in seeking an end to various conflicts and political crises on the African continent, including in Burundi, the Democratic Republic of the Congo, Madagascar, Sudan, Comoros, and Zimbabwe.
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