The history of those countries that have successfully transformed their economies shows that the appropriate macro-economic policy is only a necessary, and not a sufficient, condition for economic success. It is clear that the neo-liberal economic paradigm that has been exported by the IMF and Western economies to developing countries has failed to address many of the economic and social needs of those countries. The huge gap between the rich and the poor is one of the major issues that government policies need to address, since neo-liberal economic policy often fails to benefit the economically disadvantaged. The South African government has come under harsh criticism not only from the trade unions but from a growing number of voices in civil society as well for its adherence to its tight management of the state budget in the hopes of attracting foreign direct investment during a time of increasing unemployment and slow growth. Critics predict that the adherence to the tight fiscal policy will fail to create jobs but may send South Africa into a recession.
Critics believe so.
They argue that by concentrating on job creation, rising levels of income will create greater demand for domestic products which in turn would lead to greater employment. The World Bank would agree with at least part of this prescription. Few jobs are created by capital-intensive industry. Peter Bruce , editor of the Financial Mail , goes so far as to suggest that South Africa forget about trying to compete with the world's manufacturers and design the country's economy around a serious mass tourist industry. The country is beginning to see some greater importance being placed on the potential of tourism.