Preface 2 Introduction 4 2.1 Research strategy 4 2.2 The Human Development Indicators 5 2.3 What the democratic State inherited 7 2.
Themes 10 3.1 Governance 10 3.2 Social 16 3.3 Economic 31 3.4 Justice, Crime Prevention and Security (JCPS) 44 3.
Findings 73 4.1 Influence of the State 74 4.2 Understanding the performance of government 86 4.3 Measuring impact 87 4.4 The views of the public 92 4.5 The social transition 95 4.6 The Global Setting 100 4.
Challenges and Opportunities 103 5.1 Framework of encompassing interest - a Social Compact 103 5.2 Improving the performance of the State 106 5.3 Addressing the consequences of the social transition 109 5.
Way Forward 113 6.1 Governance and Administration challenges for the next decade 114 6.2 Social challenges for the next decade 114 6.3 Economic challenges for the next decade 115 6.4 JCPS challenges for the next decade 116 6.
The attainment of democracy in 1994 presented government with twin challenges: significant institutional transformation and at the same time introducing new policies in line with the democratic Constitution. Secondly, the Government had to deal with the legacy of Apartheid within South Africa, whilst at the same time facing new challenges of integrating the country in a rapidly changing global environment.
Since 1994, the State has deliberately set out systematically and deliberately to dismantle Apartheid social relations and create a democratic society based on the principles of equity, non-racialism and non-sexism.
In line with the prescripts of the new Constitution, new policies and programmes have been put in place to dramatically improve the quality of life of all the people. Key to this programme of action has been the extension of universal franchise and the creation of a democratic state. This has created the requisite environment for the country to address poverty and inequality, and to restore the dignity of citizens.
This process, defined in the Reconstruction and Development Programme (RDP), has been elaborated in all post-1994 policies.
In the elaboration of government policy since 1994, the RDP objectives have been elaborated upon to include more specific priorities of different clusters and depar tments. After 1999, the policy objectives of government were consolidated into the priorities of the five Cabinet clusters (see Annexure I).
The Towards a Ten Year Review was overseen by a steering group of Ministers and received inputs from individual departments in government. The project outputs were reviewed by the Directorsgeneral (DG) clusters.
The Rev i ew is organised on comp r e h e n s i ve research conducted within and outside of gove rn m e n t , and attempts to evaluate the ex t e n t to which gove rnment has achieve d its objectives in the past decade. More modestly, it explores the poss i ble policy permutations for the n ext decade in the context of the i m p e ra t i ves of the Constitution and the challenges of reconstru c t i o n and deve l o p m e n t.
The Review primarily reflects on government's performance in realising its objectives and does not seek to examine in detail the evolution of various sectors of society in the period under review. It is expected that organisations in the areas of sport, the arts and culture, universities, professionals and the intelligentsia, trade unions, non-governmental organisations (NGO's) and communitybased organisations (CBO's) and the private sector will conduct their own assessments which, together with this Review, will help inform the nation's evaluation of itself in the First Decade of Freedom.
Such an evaluation will be an ongoing process, which will achieve definitive conclusions only after data on the whole of the Decade is available, which in turn will be after the Decade has expired in April 2004.
1 . Has the Gove rnment achieve d its policy objectives?
2 . Are these the appropriate object i ves?
A n swers to these questions are c overed in the themes discussed in the next section. The project team adopted a research strategy based on key human development indicators and a conceptual fra m ewo rk on the nature of the State.
1 . A set of 35 ove rv i ew papers was commissioned from gove rnment officials and other researchers to cover the key questions raised in the five clust e r s. The ove rv i ew papers sought to indicate potential ave nues for further research and identify the proposed research strategy and data sources for such research.
2 . In parallel with the first process, d e p a rtments in each cluster were asked to rev i ew G ove rn m e n t 's perfo rmance in the first ten ye a r s. Fo l l ow - u p i n t e rv i ews were also conducted in some cases. These departmental submissions have been i n t e grated into interim clusterbased reports and the two processes info rmed the presentation at the Ja nu a ry L e k g o t l a.
3 . A 'gap analysis'was conducted on the info rmation acquired, and on this basis, detailed research t e rms of reference were comp i l e d . Twe n t y - f i ve research projects of different scales we r e pursued in order to address specific info rmation gaps, i m p r ove data-sets and seek to understand the impact of gove rnment programmes through both quantitative and qualitative a n a l y s i s.
4 . The combined results of the ove rv i ew papers, depart m e n t a l r ev i ews and in-depth research h ave been compiled into five cluster report s. In some i n s t a n c e s, clusters constituted their own task teams to wo rk on these report s, whilst in other c a s e s, the clusters have commented on reports developed by the PCAS in the Presidency.
The most direct way to assess gove rn m e n t 's perfo rmance over the past decade is to measure the impact of its policies and pro gra m m e s. H owever simple this may seem, it is difficult to agree on the measures for impact.
PCAS and other depart m e n t s sought to define the appropriate set of indicators that could be used to measure impact.
and where data is ava i l a bl e, these indicators have been included in the cluster reports (and summ a rised in the themes below).
Where data does not exist, the measure may be defined for purposes of future refe r e n c e, and in other cases, a proxy measure is u s e d.
The wo rk of defining impact indicators however highlighted a more c o m p l ex set of questions. E ven if an indicator could be agreed and measured, it cannot always be l i n ked to outputs. Another probl e m with measuring impact is that not all social phenomena are directly m e a s u ra bl e. In some cases, data does not exist because it is not collected (in these instances it may still be useful to define the measure and then make arrangements fo r data collection in the future), whilst in other cases, a proxy measure is u s e d . F u rt h e r, given the slow ra t e of social, political, economic and e nvironmental change as a genera l phenomenon in all countri e s, the impact of policies implemented in the past nine years cannot in all instances be properly assessed at this stage.
One way to overcome these problems is to use composite indicators of impact to show how gove rn m e n t has affected the lives of the South A f rican population. When appropriate direct measures of change are not ava i l a bl e, composite indicators can be designed to capture part i c ular dimensions of change. T h ey are a ble to do this because they can reflect diverging or contra d i c t o ry t r e n d s, yet show the direction and extent of change. T h ey are also r o bust in that the measures are as simple and as transparent as poss i ble and the indices are not sensit i ve to small changes in trends or in d e f i n i t i o n s. Trends can therefore be captured by proxy measures because most impacts are not directly ava i l a ble for measurement. The use of proxy measurements also means that one measure can d e s c ribe a more complex phenomenon because it is correlated with other aspects which may not be as easily measured.
For the analysis of impact, the R ev i ew makes use of seven composite indexes developed by the HSRC and based on data prov i d e d by Statistics SA (see Annexure III for further discussion of these indic a t o r s).
Social inclusion - to measure membership of cultural organisations, the stability of households, and the way in which individuals include themselves in the community.
In the individual themes, a range of other measures is used. These include the indices in Annexure II as well as measures that are used by the clusters or departments to assess their own progress.
South African society, had begun to crumble by the late 1980s. However in 1994, the essence of Apartheid remained, with blacks denied the franchise, society divided along racial lines and the social exclusion and neglect of the majority a matter of State policy.
Government programmes perpetuated a strict racial hierarchy with the greatest allocation going to whites, and Africans receiving the least. It was only after 1994 that social transfers were completely de-racialised in line with actual need. Socially, the late 1980s saw a major phase of urban migration as influx control collapsed, giving rise to large-scale informal settle ments without services.
Economically, the country was isolated through sanctions and the resultant import-substitution industrialisation meant that many firms were unable to compete in global markets. In the decade preceding 1994, growth declined to below 1% per annum and by the early 1990's economic growth had come to a standstill with the 1992 recession and drought. Public sector debt was ballooning out of control as the Apartheid regime sought to buy support. The country was also isolated diplomatically and excluded from almost all multilateral institutions. Sanctions busting and illicit capital export were the stock-intrade.
The police and justice system violated most human and civil ri g h t s and was pri m a rily used to defe n d A p a rt h e i d . The Defence Force wa s engaged pri m a rily in a low - i n t e n s ity war against the liberation movement domestically and abroad. U p until after the 1994 elections, certain parts of the country were living under a State of war and assassinations and bombings of political opponents were ri fe.
Governance was largely defined by a national security doctrine with little respect for the rule of law or constitutionality. The Tricameral Parliament and Bantustan system were supported by a minority, whilst the vast majority of South Africans had no political rights.
The authoritarian nature of the State meant that it became more isolated, more corrupt and more dependent on extra-judicial measures to sustain itself. By the late 1980's, the country had become ungovernable with the economy failing, the social fabric rent asunder by Apartheid, and the dislocation associated with social conflict.
Whilst it is possible to describe the main features of the Apart h e i d State, it is difficult to directly compare its perfo rmance with that of the democratic State after 1994 because of differences in the way in which social data was collected. The pre-1994 data excluded the so-called TBVC States and as a result significantly underestimated the impact of Apartheid policies on the African majori t y. With other c h a n g e s, such as the introduction of political and civil ri g h t s, it is difficult to quantify the actual impact on those previously excluded ye t the impact is certainly phenomen a l . The analysis and discussion that fo l l ow therefore uses the best ava i l a ble info rmation since 1994, although in some cases, where it is meaningful and compara bl e, reference is made to pre-1994 data.
The findings of the Ten Year Review need to be examined in terms of State power and its limitations. This will help determine whether certain objectives were in fact realisable if only the State was more efficient and whether there are some objectives that are beyond the scope of direct state intervention. These latter objectives may still be realisable but only because the State may have the means to achieve them in partnership with, and through the actions of, others.
It is possible to argue that the success or failure of gove rnment in a c h i eving its developmental object i ves will largely be determined by the appropriateness of the institutional fra m ewo rk that it creates. Much of the fo rmal fra m ewo rk wa s c o n f i rmed in the 1996 Constitution, and the success of the State can be assessed in terms of how the G ove rnment and civil society make use of this fra m ewo rk.
H oweve r, the fo rmal institutions of state are significantly influenced by the persistence of info rmal social modes of interaction which opera t e with logics that are often autonomous to those of the State. The totality of social netwo rks can only be harnessed to the deve l o pmental effo rt if the State m a n a g e s to provide the central co-ordination and leadership that will ensure that ex t e rnalities of many separa t e activities become complementary to the development project. In other wo r d s, the State can ensure that the economies of scale beyond the scope of individual actors can be a c h i eved through the better integration of their activities.
T h e r e fo r e, the Gove rnment needs to make use of and part i c i p a t e within the social netwo rks but not as an equal part n e r. G ove rn m e n t , representing the collective will of a nation, should give leadership to such interactions especially through its ability to ' p r e - c o m m i t ' . Pre-commitment is ability to art i c ulate long-term but conditional publ i c d evelopment objectives that enabl e a nation to achieve economies of scale from the co-ordinated effo rt of many individual actors.
In the broader context of globalisation, it is obvious that depending on its position in the world political economy, the nation state is limited in terms of what it can achieve relative to other states.
economic, cultural, political and otherwise - which may not be fully appreciative and supportive of the nation-state's agenda. Thus adeptness at identifying the national interest and pursuing this in a creative way is part of the challenge of governance and state leadership in the current global arena.
In assessing the success of the Government in achieving its objec-tives, and indeed the appropriateness of these objectives, we need to take this framework into account - particularly the dual role of the State as an actor in providing services and helping create an appropriate environment for development, and as a leader in forging common cause among the variety of social actors.
This Review has assessed the extent to which the new democratic dispensation since 1994 has redirected the purpose and content of government policy and seeks to describe the impact of these changes on South African society. The work of the Review has been organised in five themes corresponding to the Cabinet clusters although it is evident that there are many cross-cutting issues and each cluster contributes to a number of broad RDP objectives (see Annexure I).
Since 1994, government has been engaged in a vigorous process of transformation that includes a new Constitution, transformation of the State machinery, changes to almost all policy, all geared toward changing the Apartheid State and society into a democratic society based on the principles of nonracialism and non-sexism.
Given that Apartheid sought to systematically exclude the majority from political participation, and given that the Apartheid State had become increasingly isolated, authoritarian and corrupt, and given the high levels of political violence in the decade prior to the first democratic elections, there is no direct comparison between this era and the advent of democracy. There can therefore be no direct comparison to pre-1994 indicators, given the quantum nature of the change in governance.
ï¿½ efforts to expose and deal with corruption.
A critical element in the first years of the democratic State was the introduction of a new constitutional and legislative framework. This entailed the adoption of the new Constitution in 1996, and the introduction of new legislation at the average rate of about 90 Acts per annum in the first nine years; such that since 1994 over 789 laws or Amendment Acts aimed at reconfiguring South African society were adopted.
The fact that the intensity of such legislative work has diminished in the recent period is a reflection of the progress made in this regard, and of the fact that the emphasis of government work is shifting increasingly from policy formulation towards a much greater focus on implementation.
Most evidence suggests that gove rnment has made remark a bl e p r o gress in tra n s fo rming the State m a c h i n e ry to make it more r e s p o n s i ve to the needs of citizens and to make it more a c c o u n t a bl e. The ra t i o n a l i s a t i o n and integration of the fo rmer fra gmented Public Service is almost c o m p l e t e. The integration of the va rious Bantustan and centra l g ove rnment civil services into a coherent single public service has been a success. The implementation of the current Resolution 7 of the Public Service Co-ordinating Bargaining Council (PSCBC) a greement of 2002 seeks to end the process of the restru c t u ring of the Public Serv i c e. The present r e s t ru c t u ring process invo l ves the identification of skills with job d e s c riptions and the retraining of s t a f f. Institutions are also being r e s t ructured to meet the needs of their clients in a more efficient m a n n e r.
The Public Service has also come close to meeting the targets set for improving representivity in the Public Service. Although Africans now make up 72% of the Public Service at all levels, government still needs to focus on increasing the number of women in senior positions as well as a more general increase in the number of disabled persons employed in the Public Service. Overall, the num-bers of civil servants have been decreasing from 1.2 million in 1994 to just over 1 million in 2001. However, capacity constraints have meant that almost 25% of government's procurement budget annually is now spent on consultants primarily providing information technology, policy advice and project management services.
The number of public entities increased during the 1990s (60 created) over the preceding decade (10 created). In addition, public entities receive considerable funding in the form of transfer payments (R10.2 billion in 2000/2001) and they employ 288 983 people.
(e.g. procurement), to ensure operational autonomy, and to implement commercial principles and practices. Challenges however remain, around performance, corporate governance and commitment of some of these institutions to the overall development objectives of government.
The introduction of the Senior Management Service improved conditions of service for senior managers with the aim of retaining and attracting skilled personnel in the Public Service. There is more stability at the top echelons of the Public Service although the general lack of technically skilled personnel at all levels is a matter of concern. This problem is particularly acute in provinces and local government. Career-pathing, especially at the highest levels of the Public Service, has yet to be fully developed; and as such, skilled and experienced personnel developed since 1994 are being lost to the private sector. This challenge applies equally to public representatives in various legislatures.
Thirty-seven Multi-Purpose Community Centres (MPCCs) have been set up as providers of information and services to the public. The aim of government is to establish one MPCC per District/Metro by the end of 2004 and to expand these to each municipality in the next decade. This would be complemented by the decision taken in 2003 to employ Community Development Workers. The e-government programme is also expected to help improve service to citizens. Initial steps to improve service in line with Batho Pele have had uneven success. Weaknesses include poor senior management involvement in the monitoring of the implementation of the principles driving Batho Pele, and lack of public involvement in the enforcement of these principles. Such public involvement would require a confident citizenry that holds officials to account without fear of reprisals such as the withholding of services and benefits.
The introduction of the Public Finance Management Act, (PFMA) 1999 improved accountability within government and to Parliament. The implementation of the PFMA and the change to a medium-term budget cycle has led to improved budgeting and financial management at national and provincial spheres of government. The challenge remains to include local government within the budgeting and planning cycles of government.
Government recently introduced a National Planning Framework to enhance integration in the areas of strategic policy prioritisation and to improve the policy decisions of government. This includes the National Spatial Development Perspective which seeks to facilitate dialogue between and within spheres about the country's spatial priorities regarding infrastructure investment and development spending. Local government is not yet included in the planning process but the introduction of Integrated Development Plans (IDPs) is expected to assist in such interaction. The introduction of the IDPs, as well as the cluster approach and the Forum of South African Directors-General, the Presidential Co-ordinating Council, and the restructured Cabinet Committees have all contributed to better co-ordination of policy-making and programme implementation.
Some weaknesses have been identified in these structures. Although the IDPs are a form of local consultation that seeks to involve local communities in identi-fying their needs within a given locality, there remains a need to involve communities more in decision-making especially in poor c o m mu n i t i e s. Research suggests that the poor lack fo rmal organised p ower at local level outside of the fo rmal political processes. It furt h e r suggests that where civil society organisations participate more f u l l y, serv i c e - d e l i ve ry gaps are better identified. In such cases, the p ri o ritisation of serv i c e - d e l i ve ry needs is also more appropriate to the needs of commu n i t i e s.
The plan to deploy Commu n i t y D evelopment Wo rkers is intended to contri bute to improved serv i c e d e l i ve ry by taking services directly to the poor, but it is also intended to assist the poor to develop the capacity to organise themselve s and participate in decision-making. H oweve r, any attempt to improve s e rvice delive ry must confront the p r o blem that there remain seri o u s capacity shortages at prov i n c i a l and local gove rnment levels of s e rvice delive ry. Despite the enormous strides made in restru c t u ri n g both provincial and local gove rnment spheres, there remain seve r e d e l i ve ry constra i n t s, and significant fiscal ri s k s, especially in the local s p h e r e. The perfo rmance of both p r ovincial and local gove rn m e n t h owever reflects great uneve nn e s s, with some leading prov i n c e s and municipalities doing ex c e p t i o nally well, whilst others are still s t ruggling to achieve a basically a c c e p t a ble level of operational efficiency and effe c t i ve n e s s.
There has been more compliance with government regulations since 1994. Research shows that the culture of compliance is enhanced when there is better information available to citizens, better understanding by authorities of the social attitudes of target groups and a combination of the incentives and disincentives. This applies to such instances as taxation, registration for elections, observance of traffic regulations, and new systems such as credit card drivers' licences.
Since 1994, numerous anti-corru ption programmes and projects h ave been put in place by the new G ove rn m e n t . In March 1997, the g ove rnment sectors responsible fo r the South African National Cri m e P r evention Strategy (NCPS) established a programme committee to wo rk on corruption in the cri m i n a l justice system. By June 1997, the Code of Conduct for the Publ i c S e rvice had become part of the regulations for eve ry public serva n t and was the subject of an ethics promotional campaign by the then P u blic Service Commission.
The National Anti-Corruption Summit was held in Cape Town in 1999. The purpose of the Summit was to discuss the importance of eliminating corruption in both the public and private sectors and to develop recommendations aimed at improving the investigation and prosecution procedures, implementing effective and co-ordinated anti-corruption structures, reviewing the legislation, and enhancing business' role in the fight against corruption across society.
Involving businesses, organised religious bodies, the NGO sector, donors, the media, organised labour unions, academics, professional bodies and the public sector, the Summit created a powerful platform for the National Campaign Against Corruption through its recognition of the societal nature of corruption, and its acknowledgement that the fight against corruption requires a national consensus and the coordination of activities.
A rev i ew and revision of anti-corruption legislation, the establ i s hment of whistle-bl owing mechan i s m s ; the speedy enactment of the Open Democracy Bill; t h e e s t a blishment of special courts to adjudicate on corruption cases, and the establishment of sectora l and national co-ordinating stru ctures were recommended and i m p l e m e n t e d . A new Prevention of C o r ruption Bill was developed and is currently before Pa rliament, a Protected Disclosures Act commenced in Fe b ru a ry 2001, while the Promotion of Access to I n fo rmation Act came into force in Fe b ru a ry 2000. The National Anti-C o r ruption Fo rum was establ i s h e d in June 2001.
To enhance this, gove rnment is introducing new measures such as the bl a cklisting of individuals and o r g a n i s a t i o n s, the establishment of a n t i - c o r ruption hotlines, the establishment of sectoral and other hotl i n e s, more efficient disciplinary action against corrupt persons, consistent monitoring and repor t-ing on corruption, and the promotion and implementation of sound ethical, financial and related management pra c t i c e s. A central database of corrupt businesses has been establ i s h e d . The National D i r e c t o rate of Public Prosecutions (NDPP) and South African Po l i c e S e rvice (SAPS) have taken decis i ve and visible action against corrupt officials and white collar cri m e.
Government has in principle approved that corrupt employees be blacklisted from employment in the Public Service. Hotlines have been established in all nine provinces and for specific industries in the business sector. Disciplinary codes have been revised. At the level of government, about 80% of cases reported in the media are in fact discovered by government.
The policies for Governance and Administration were largely the required interventions. Most of the institutions are operating effectively although the process of stabilising the intergovernmental system is still not complete. More flexibility is required in the Public Service to make it more responsive to the needs of public servants. The democratic State is able to exercise authority across society and it enjoys legitimacy in the eyes of the overwhelming majority. Its capacity to formulate and implement policy, mobilise resources, frame and enforce laws, and the integrity of institutions - all indicate progress in governance. Civil society is vigorous although many formal organisations lack mass involvement of especially the poor and marginalised communities. The capacity of the State to deliver social services requires improvement with greater capacities at national departments and some weaknesses at provincial and local government level. Compliance with regulations is high. However there are some weaknesses with regard to government's capacity to involve the informal sector in adhering to their civic obligations. Success is slow but notable with regard to fighting corruption.
The central programme of the social sector focuses on poverty alleviation through a range of programmes that address income, human capital and asset poverty. It is in this intersection between access to services, income and assets that the issue of overall poverty trends since 1994 should be examined.
Inequality as measured by the household level before and after factoring in social spending by the State shows that the impact of social spending (including the tax effect) reduced the Gini coefficient massively due to a redirection of spending to the poor since 1994 (discussed further below).
According Statistics South Africa, it is estimated that in 1995 approximately 28% of households and 48% of the population were living below the estimated poverty line - calculated on the basis of expenditure, thus excluding access to services and assets. In 1999, there were 3.7 million such households out of 11.4 million (just under 33%) living below the poverty line. Of these, most were Africans. Part of this increase in income poverty would be due to large-sized poor households unbundling into smaller households. The unbundling has the effect of removing additional income earners from the household and would therefore reflect an increasing number of households being classified as poor (to be discussed again below). Of femaleheaded households, 45% were below the poverty line, compared with 26% of male-headed households. On average, the poor were living with incomes about 12% below the poverty line, in line with many comparable developing economies. These figures will be updated once the Census 2001 data has been further analysed.
At least two major programmes of the Government address income poverty in the form of income grants and public wo rks pro-gra m m e s.
Under Apartheid, social gra n t s were still being allocated on a racial basis. Since then, gove rnment has equalised the Old-Age Pe n s i o n s, and spread the reach of the Child Support Grant (CGS) among all eligible children. T h e r e are at least seven types of gra n t s currently administered by the D e p a rtment of Social D evelopment and these are targeted at pensioners, poor fa m i l i e s with children, war ve t e ra n s, fo s t e r care and grants in aid for fa m i l i e s taking care of children and people in need. The expenditure on these social grants has increased by 3.5 times between 1994 and 2003 from R10 billion to R34.8 billion. The number of beneficiaries has increased from 2.6 million to 6.8 m i l l i o n.
Research shows that grants are exceptionally we l l - t a r g e t e d. T h e poorest 20% of households r e c e i ve the largest amount from gra n t s, not just as a proportion of i n c o m e, but also in absolute t e rm s. Fully two-thirds of the income for the poorest quintile is a t t ri bu t a ble to state tra n s fe r s. S i mulation studies also show that, in the absence of any gra n t s, 55.9% of the elderly would be in p ove rty and 38.2% would be in u l t ra - p ove rt y. This falls to 22.9% and 2.5% respectively if all recipients get gra n t s. In the absence of the CSG, but after taking account of the Old-Age Pension, 42.7% of children would be in pove rty and 13.1% would be in ultra - p ove rt y. Pove rty among children (under s even) falls from 42.7% to 34.3% and ultra - p ove rty falls from 13.1% to 4.2% if all recipients get gra n t s. O ve rall, social grants have the potential of reducing the nu m b e r of individuals in pove rty from 42% to 24%. Although great progr e s s has been made in registeri n g r e c i p i e n t s, the full impact of these grants will only be realised when all eligibles are registered.
Expenditure on public wo rks programme has increased almost t e n fold since 1998. As part of the o b j e c t i ve of providing employment, the public wo rks programme has employed a total of 124 808 people since 1998. H oweve r, most of these jobs we r e t e m p o ra ry in nature. A total of 3 407 permanent jobs were created in 1999-2002 and a total of 141 p e rmanent jobs were created by the first half of the 2002/03 financial ye a r. Research indicates that p u blic wo rks programmes va ry in their efficiency of tra n s fe r ri n g income to the poor with the ave rage expenditure per wo rker va rying from between R27 242 in Limpopo to R6 515 in the Eastern C a p e. T h u s, public wo rks programmes while increasing prov ision of assets to the commu n i t y, are not as efficient as income grants in alleviating income p ove rt y. N o n e t h e l e s s, these programmes have been successful in a l l eviating the asset pove rty of c o m mu n i t i e s. O ver R6.5 billion of expenditure on infra s t ructure has p r ovided 2 182 commu n i t y a s s e t s.
Social services such as education, health, water and sanitation, and electrification are critical to i m p r oving the human capital of the nation.
Expenditure on education remains the largest budgetary item in South Africa. For early childhood development (ECD) there has been a steady, albeit non-linear increase in enrolment in the reception year, with enrolment increasing from approximately 150 000 to 280 000 between 1999 and 2002, suggesting that full enrolment will be reached by 2015. Gross primary school enrolment has remained steady at around 95.5% between 1995 and 2001. Gross secondary enrolment is currently approximately 85%, indicating a 15% increase from 1992. The learner-to-facility ratio has also declined with classroom sizes declining from 43:1 in 1996 to 38:1 in 2001, indicating that learners are getting better access to classroom facilities. Progress in education is ahead of the Millennium Development Goals and ahead of most comparable developing countries. In addition, the male to female enrolment ratio is greater than one, indicating that slightly more girls are enrolled than boys. This is positively different from other comparable developing countries.
The main outcome indicator for education is the adult literacy rate, the proportion of the population over 15 years that can read and write in one language. General outcomes of the educational programmes indicate that there has been an increase in literacy rates from 83% in 1996 to 89% in 2001 for the general population while the literacy rate for 15-24-year olds has increased from 83% to 96% which is exceptionally high for any nation. These improvements are also reflected by a parallel increase in the matriculation pass rate from 54% in 1996 to 69% in 2002. It should be noted that whilst the proportion of matriculants has increased significantly there has been a decrease in the absolute number of matriculants due to the implementation of tighter progression standards at lower levels and limitations on "repeaters".
Since 1996, there has been an increase of 2% in the number of people completing grade 12 to 5.1 million in 2001 and a further 2.2% increase in the population completing tertiary education to 2.2 million in 2001, suggesting that the skills profile of the country is improving. However, within the population as a whole, approximately 71% of the population over 20 years have not completed secondary schooling. This finding is significant in terms of impact of human capital on employment.
Public healthcare expenditure has increased in the last eight years although real per capita (uninsured) expenditure has remained at between R967 and R907. The main thrust of the Department of Health has been to improve the access of healthcare through the primary healthcare approach (PHC). Major programmes include the Free Healthcare policy for women and children under the age of six. Implementation of this programme has resulted in increased utilisation rates which indicates increased access. However the per capital PHC visits is between 1.3 and 2.7 which is still slightly under that of 3 to 3.5 visits, per capita per annum recommended by the World Health Organisation (WHO) and Department of Health. There are now over 4 350 PHC access points available to the population. In terms of clinics alone this represents an increase of 701 additional clinics nationally from the clinic upgrading and building programme.
The immunisation programme has s h own an increase in the rates of i m munisation between 1994 and 2002 from 63% to 72% nationally although provincial dispari t i e s r e m a i n . H oweve r, the greatest success of the immunisation programme has been the elimination of deaths due to measles and to reduce the incidence of polio.T h e I n t e grated Nutrition Progra m m e has increased from 89% of the targeted learners in 1994 to 94% cove rage of eligible and targeted l e a rners and has now reached almost 4.58 million children. Without fa c t o ring in the weak statistical base in 1994 which ex c l u ded many poor areas, the rates fo r u n d e r - weight children have increased slightly from 9.1% in 1994 to 11.17% in 1999; w h i l s t stunting increased for those aged 6-71 months from 22.9 to 23.8; and wasting has also increased slightly from 2.6% to 3.6% in 1999.
Indicators of health status show that infant mortality has increased from about 40 per 1 000 births to 45 per 1 000 births between 1991 and 1998. Maternal health indicators such as antenatal care utilisation have increased from 89% to 94% between 1994 and 1998, births received with no antenatal care has declined from 12% to 3% and deliveries at healthcare facili-ties has increased from 78% to 83%. Maternal mortality ratios have averaged 150 per 100 000 live births in the South African Demographic Health Survey (SADHS) despite improved service delivery and access. New data will only be available once the 2003 SADHS is completed.
HDI MRC life expectancy 1995 2000 0.63 0.
The Human Development Index (HDI) was calculated for purposes of this Review, using the Medical Research Council (MRC) estimates of life expectancy rather than those used by the UNDP to calculate their HDI. The UNDP estimated life expectancy at 65 years in 1995 and 52 years in 2000. The MRC figures were 57 and 55 years respectively. Calculating the HDI using the same UNDP figures for gross enrolment and GDP per capita but the MRC estimates for life expectancy yields an HDI of 0.63 for 1995 and 0.71 for 2000.
0.72 in 1995 and 0.70 in 2000. Therefore, the HDI calculated with MRC life expectancy estimates indicates a significant improvement whilst the UNDP HDI shows a decline. These differences reflect the problems with using estimates of life expectancy to assess progress in development.
The prevalence of HIV/AIDS as estimated from public antenatal clinics shows an increase from 0.7% in 1990 to 26.5% in 2002. The HIV prevalence rates seem to be stabilising between 1999 and 2002. The overall prevalence rate was 22.4% in 1999, 24.5% in 2000 and 24.8% in 2001. According to extrapolations used in the Joint Heath and Treasury Task Team on Treatment Options to Enhance Comprehensive Care for HIV/AIDS in the Public Sector, these proportions translate into an estimated 4.7 million South Africans infected with HIV, with about 400 000 at an advanced stage of AIDS.
The stabilisation can be attributed mainly to the prevalence rates in pregnant women under the age of 24 years decreasing consistently for the last few years. In addition the rate of syphilis infections among pregnant women has also declined from 7.3% in 1999 to 2.8% in 2001. At the same time dedicated expenditure (exclusive of programmes) on HIV/ AIDS programmes across national depar tments has increased from about R30 million in 1994 to R342 million in 2001/02. This excludes allocations from provincial equitable share. Expenditure is further set to increase tenfold to R3,6 billion in 2005/06. This increased expenditure is beginning to have an effect on the knowledge and behaviour of high-risk groups such as young women. Research results indicate that there is increasing condom use among 15-24-year olds. The 1998 SADHS indicates for those aged 15 to 19 years condom usage was 19% and for those aged 20 to 24 years it was 14.4%. Research indicates that there is a marked improvement in knowledge about HIV, which was at 72%in 2001, and there is increased abstinence among young women aged 15 to 24. Moreover, condom usage by women has increased from 8% in 1998 to 28.6% in 2001. This increased knowledge and expenditure is reflected in the decline in the rate of HIV prevalence in the 15-24 age group.
The TB control programme has seen many modifications in implementation since 1994. Chief amongst these has been the implementation of the Directly Observed Therapy (DOTS). By 2003, DOTS has been implemented in 70% of all health districts. Improvements in case detection, treatment and in cure rates in both DOTS and non-DOTS areas have been seen between 1996 and 1999. Treatment rates have increased from 60% to 65% between 1996 and 1999. High rates of treatment interruptions and transfers however mean that treatment rates remain at below the targeted 85%. This lower cure rate also indicates the compounding effect of drug-resistant TB, elements of which may be related to HIV and AIDS.
P r ovision of clean water is a major tool for protecting human capital and for reducing social asset pove rt y. The proportion of households having access to clean water has increased from 60% in 1996 to 85% in 2001. T h i s t ranslates into around 9 million citi zens or about 3.7 million additional households gaining access to water between 1995 and 2003. The expenditure for the prov i s i o n of water was approximately R5 billion in the period under rev i ew.
In terms of the urban/ru ral distribution, in 1994, 4 million households had access to clean water in urban areas, with only 970 000 households h aving access in ru ral areas. By 2003, the number of urban households gaining access increased by a further 1.
1.6 million households receive d water between 1994 and 2003.
The proportion of households h aving access to sanitation has also increased, though at a slowe r p a c e. In 1994, 49% percent of households had access to sanitation and this increased to 63% in 2 0 0 3 . The reason for the higher b a cklog in sanitation provision can be attri buted to the increase in the number of households and the increased focus on provision of water to households. T h u s, up until the recent floods, there wa s a declining trend in the incidence of cholera . B e t ween 1991 and 1995, 119 cases were report e d nationally which decreased to 70 cases in the period between 1996 and 2000.
There has been an increase in e l e c t ricity connections which t ranslates to an increase in the p r o p o rtion of households with e l e c t ricity from 32% to 70% by 2 0 0 1 . H oweve r, in poor areas in 2001, most of the electricity wa s still used for lighting and only 49.1% of households used e l e c t ricity for heating purp o s e s.
The housing and land programmes are the two lead programmes relating to the elimination of asset capital pove rt y. Fr o m these programmes alone, about R50 billion of assets have been t ra n s ferred to poor households since 1994.
B e t ween 1994 and 2003, 1 985 545 subsidies we r e a p p r oved for an expenditure of R24.22 billion. M o r e ove r, 481 373 houses that were built in the A p a rtheid era were tra n s ferred to occupants through the discount benefit scheme. Whilst the cost to gove rnment was approx i m a t e l y R3.6 billion, the replacement cost of these houses (that is, the value to occupants) is approx imately R24 billion. T h u s, about R48 billion of housing assets h ave been tra n s ferred to citize n s since 1994.
With respect to improving gender equality in housing ownership, 49% of all subsidies approved were granted to women. The outcomes of providing subsidised housing indicate that a total of over 6 million citizens received housing between 1994 and 2003.
A major challenge for the housing sector will be to meet the increasing demand for housing genera t e d by the decrease in household size b e t ween 1996 and 2001.
1.985m subsidies approved for1994 - 2003Subsidies an expenditure of < R24.
Household size decreased from 4.5 to 3.8 in that period and this tra n slates into an increase of two million additional households over and a b ove that generated by population gr ow t h . It is expected that demand for housing will double as a result of this phenomenon.
Land restitution, tenure reform and land redistribution are the other major policy instruments used for alleviating asset poverty since 1994. Since 1994, 1.8 million hectares (ha) of land have been transferred under the redistribution programme to about 137 478 households. Approximately 80% of these transfers occurred between 1997 and 2002. By 2002, approximately 68 000 claims had been lodged of which 72% were urban and 28% rural. A total of 36 489 claims have been settled involving about 85 000 households. For urban claims there has mostly been financial compensation for victims of forced removals and the total compensation made by December 2002 was R1.2 billion. For the rural claimants, the restitution mainly takes the form of restoration of land and by December 2002 approximately 571 232 ha been restored at a cost of approximately R442 million.
The focus on building the social fa b ric is crucial for gove rnment programmes to succeed. S t a ble community organisation has been found to increase efficient serv i c e d e l i ve ry as well as improve marke t p e r fo rmance and economic gr ow t h . Research indicates that increased violence in commu n i t i e s, which is a symptom of we a kening social fa b ri c, undermines service delive ry and therefore impacts on the i n c o m e, human capital and assets of commu n i t i e s. The studies indicate that housing service delive ry is impeded in communities with high violence levels as is the delive ry of healthcare and schooling. One of the major mechanisms that have been implemented to build commu n i t y - t o - c o m mu n i t y n e t wo rks and trust is the Mora l R e g e n e ration campaign. S i n c e the progra m m e 's inception in 2001, a summit on Mora l R e g e n e ration took place on 18 April 2002 and progra m m e s are under way to intensify the c a m p a i g n . A second mechanism to deal with improving the social fa b ric has been through the Safe r Cities initiative of the SAPS and the Department of Education's init i a t i ves to prevent crime in school.
Instability in communities undermines service delivery tal relations.
In terms of providing access to the medium of communication, the number of households with access to cell phones in 2001 was 32%, those with access to land lines 24%, those able to access a ra d i o was 73% and television 54%. T h e major means of commu n i c a t i o n h owever takes place through ra d i o. In terms of access to the official l a n g u a g e s, plans are under way to fully implement the constitutional recognition of all 11 languages of South Africa as official languages through the Language Bill.
In addition, the Department of Education is fo s t e ring respect fo r h i s t o ry, language, culture, va l u e s and attitudes for enhanced social p a rticipation through its new curri c u l u m . Implementation has started of the modernised curri c u l a , which include values and human rights pri n c i p l e s, and which will i m p r ove teaching and learn i n g p ractice in schooling as well as the r e l evance of the competencies gained in the education and tra i ning system. Another means of fo s t e ring community life is through the deve l o pment of sports and recreational p r o gra m m e s. In the education s e c t o r, a 2001 school survey found that 62% from a sample of over 42 000 Grade 3 learn e r s r e p o rted that they were invo l ve d in sporting and cultural activities in 2001. Outside of the education s e c t o r, approximately R500 million wo rth of facilities have been cons t ructed or upgraded, especially in disadvantaged commu n i t i e s. More than 610 disadva n t a g e d c o m munities have enjoyed the benefit of access to decent sport and recreation facilities and progra m m e s.
F u rt h e r, a specific programme to test 9 000 pupils for sporting ability was launched, after which the top two per cent were identified for placement in programmes fo r a d vanced training and nu rt u ri n g . As a result of this, the first South A f rican Games were held in 2002 in which approximately 2 500 young athletes from across the c o u n t ry participated as part of a d evelopmental process that will nu rture their talents for part i c i p ation in future international sport s eve n t s. There has been an appreciable resurgence of local self-assertion in the areas of music, the arts, literature, dress and, to a limited extent, film and video. However, while this phenomenon, encouraged by the theme of African renewal, shows some progress, there remains a counter-tendency of creating poor imitations of more generic international styles and expressions.
In order to alleviate inequality in access to services, human income and asset poverty and to address the social exclusion characteristic of Apartheid, many fundamental changes have been made through legislation and policy.
Many of the instruments used to prevent social exclusion are related to land issues which have been addressed through the Tenure and Land Reform processe.
Gender equality has been promoted, among others, through the recognition of customary marriages, the establishment of the Office of the Status of Women, labour equity, maternity benefits, recognition of surnames, attending to issues of sexual harassment and affirmative action. Labour protection for domestic and farm workers, employment protection through the Basic Conditions of Employment Act, the Employment Equity Act, Wage Act and the Labour Relations Act have also contributed to normalising social relations. Citizenship protection has been enhanced through the Refugee Act and the Citizens Act. Protection of special groups such as the elderly, the disabled, and vulnerable children has occurred through specially targeted policies and programmes.
In addition, the Department of Education has campaigns to reduce discrimination against poor learners, female learners, pregnant learners, vulnerable learners and learners from certain language, religious or cultural groups. Since March 2003, proposals have been developed for the establishment of a system to monitor antidiscriminatory practices in the education and training system wherever they occur. However, while significant progress has been made, there is evidence that discrimination in employment still exists. Unemployment and other social ills are still disproportionately higher for blacks and women, and there is still a gender-based premium in earnings.
The inclusion of the right to env ironmentally sustainable deve l o pment in the Constitution has emphasised the importance of the s u s t a i n a ble use of natura l resources in the South Afri c a n c o n t ex t . The country 's natura l resources are the nation's natura l capital and play a significant role in ove rall sustainable deve l o p m e n t and pove rty era d i c a t i o n.
The last ten years have seen n a t u ral resource management and conservation in South Afri c a m ove squarely into an arena conc e rned with human ri g h t s, access to natural resources, equity and e nvironmental sustainability. A number of trends stand out clearl y in natural resource management since 1994.
The first is the focus of the G ove rnment on the more e q u i t a ble distri bution of rights of access to natural resources. Along with greater equity in access has come the recognition that many resources can only be s u s t a i n a bly managed through the p a rticipation of resource users and beneficiaries in the planning, control and conservation of the r e s o u r c e.
C o n s e rvation areas are creating o p p o rtunities for local commu n ities to participate in the management of protected areas and in the process share in the benefit of t o u rism, thereby improving their l i ve s.
The natural resource base provides the basis for substantial economic gains. Millions of r u ra l South Africans depend upon biological resources for their day - t o d ay surv i va l . Access to this " n a t ural capital" p r ovides a crucial cont ri bution to live l i h o o d s, an important bu f fer against pove rty and an o p p o rtunity for self-employ m e n t.
As a "hidden economy " it also g e n e rates substantial income. Fo r ex a m p l e, in Gauteng alone the i n fo rmal medicinal plant trade is estimated to total R21 million per a n num and in KwaZulu-Natal the t rade is wo rth R60 million a ye a r. C o m munity-Based Natur a l Resource Management has been a particular focus for many of the ru ral development initiatives that put emphasis on commu n i t y based nature conservation and e c o t o u ri s m.
The implementation of the Bioregional Stra t e g y, which entails consolidation and expansion of the current system of protected areas from 6% to 8% is under way. The expansion of such national parks as the Addo Elephant National Pa rk through the acquisition of new land and current initiatives to develop new p a rks is a good example of the implementation of the Bioregional S t ra t e g y. Commercialisation of t o u rism facilities and serv i c e s within protected areas is an ex a mple of effo rts to improve management efficiency and reve nue gene ration from protected areas. Another major achievement ove r the past few years has been the e s t a blishment of Tra n s f r o n t i e r C o n s e rvation Areas (TFCAs). These cross-border Conserva t i o n Areas accord with the vision of the NEPA D, of economic, social and political integration within the c o n t i n e n t . Conclusion The social cluster deals most directly with the impact of changing circumstances on the lives of the p o p u l a t i o n . Significance progr e s s has been made in de-ra c i a l i s i n g social services and extending the social safety net to all South A f ri c a n s. D i f ferent progra m m e s which respectively address income, asset and human resource pove rt y are taking effect and show i n g i m p r ovements in the lives of peop l e. H oweve r, the persistence of p ove rt y, arising largely from unemp l oyment and the Apartheid legacy, and the difficulties in health demons t rate the magnitude of the chall e n g e. Whilst service delive ry and social grants are reaching an eve r increasing proportion of society, poor people and the social fa b ri c that ensures their surv i val continu e to be vulnera bl e. O ve rall, there h ave been improve m e n t s, but the challenge remains daunting.
Government established its economic policies in the Ready to Govern, and the RDP document and White Paper. Key economic objectives were job creation, the elimination of poverty, the reduction of inequality and the overall growth of the wealth of the country. Key tools were: macro-economic stability; steady trade reform and improved trade access in the context of a strong multilateral system; industrial policies to add domestic value and to increase competitiveness and improve productivity to encourage exports; encouragement of foreign direct investment (FDI); strong competition policies to improve competitiveness and roll-back white minority control of the economy; to encourage Small and Medium Macro Enterprises (SMMEs), especially black-owned companies; to promote skills development, including occupational skills and adult basic eduction and training, for affirmative action and employment; to further reduce inequalities through affirmative action (later called empowerment) and land reform; and to support innovation, research and development for competitiveness and social benefit.
L a t e r, in the 1996/97 period, in order to deal with the inherited fiscal crisis as well as new difficulties pertaining to currency vo l a t i l ity and low investor confidence, GEAR elaborated upon the notion of macro-economic stabilisation that was inherent in the RDP.
of GDP % of GDP 9.
Net open forward position (SARB) 1998 2003 $25b $22.
om 1 month's import cover to 2.5 month's cover Risen fr s t rategies for gr owth including s t rategies for tax incentive s, small business development, innova t i o n p r o grammes and skills deve l o pment, the main focus of GEAR was stabilisation of the macroe c o n o my under trying circums t a n c e s. It also set out what became known as "targets" fo r macro-economic policy outcomes, and for gr owth and employ m e n t . Detailed wo rk was also done to e l a b o rate a policy for bl a ck economic empowe rment (BEE).
The budget deficit has come dow n from 9.5% of gross domestic product (GDP) (including the deficits of the Bantustans) in 1993 to fra c t i o nally over 1% in 2002/03. Total public-sector debt has fallen from ove r 60% of GDP in 1994 to barely 50% of GDP in 2002/03. The net open fo r ward position of the Reserve Bank has fallen from $25 billion in 1994 and $22.5 billion in 1998 (the highest level since 1994) to zero in 2003, and foreign reserves have risen from one month's import c over to two and half month's i m p o rt cove r. South Africa has a c h i eved a level of macroeconomic stability not seen in the country fo r 40 ye a r s. These advances create o p p o rtunities for real increases in expenditure on social serv i c e s, reduce the costs and risks for all i nve s t o r s, and therefore lay the foundation for increased inve s t m e n t and gr ow t h.
I nvestment as a percentage of GDP has ave raged around 16 - 17%, which is low by the standards of successful deve l o ping countri e s. In the 1960s, South A f rica reached a level of 27% and higher in some ye a r s. It is now at its lowe s t - ever leve l s.
There are three investor groups in the South African economy : t h e p ri vate sector, gove rnment and the para s t a t a l s. The inve s t m e n t p e r fo rmance of all three has been l ower than required, and gove rnment-sector investment reached h i s t o rically low levels in the late 1 9 9 0 s.
This trend reflects an ex t e n d e d p e riod of public-sector tra n s fo rm ation when methodologies of public- sector investment were being r ev i ewe d . G ove rnment inve s t m e n t was constrained by the tight fiscal policy in pursuit of macro-economic stability whilst para s t a t a l i nvestment was constrained by the restru c t u ring of the Stateowned enterp ri s e s. Since 1999, g ove rnment investment ex p e n d iture has begun to gr ow, with the allocation to capital ex p e n d i t u r e rising from 5.3% to 9.3% of total g ove rnment ex p e n d i t u r e. T h i s trend is expected to continue as the investment capabilities of p r ovincial and local gove rn m e n t are strengthened.
The relatively low level of pri va t e sector investment seems to deri ve from general concerns about the direction of gove rnment policy (more an expression of mistru s t than reality), mediocre gr ow t h ex p e c t a t i o n s, perceived costs of c ri m e, elements of labour legislation and high interest ra t e s. Fo r small firm s, access to capital is a major constra i n t . C o n c e rn for the credibility of macro-economic r e fo rms resulted in strongly ri s k averse behav i o u r, especially in respect of the rate of inflation, and hence to tight monetary condit i o n s. S eve ral of these fa c t o r s h ave eased, and the country has entered a period of higher pri va t e sector inve s t m e n t.
Since the immediate pre-1994 p e riod, the country 's net FDI has been positive on balance, which is a turnaround from the massive o u t f l ows of the 1980s and earl y 1 9 9 0 s. Significant foreign inve s tments have been seen in such sectors as the motor industry, the chemicals sector, mining, and d a i ry products, but relatively little of this is green-field inve s t m e n t , that is, investments into major n ew projects or plants. There are t wo main reasons for this trend. The market in South Africa and s o u t h e rn Africa is not ve ry large and is not gr owing fast enough. Foreign direct investors are making long-term calculations, and their poor understanding of democ ratic South Africa has been a significant constra i n t . This is the result of poor info rmation, and the inclination of the media to port ray the South African story as a confusing drama, rather than a saga of steady improve m e n t . N eve rt h e l e s s, since the beginning of 2000 there has been an i m p r ovement in net FDI, including green-field inve s t m e n t s.
On average, per capita growth was negative in the decade before 1994. Since then, the economy has grown at a rate of 2.8% per annum, on average. If the Asian crisis years of 1998 and 1999 are ignored, the average growth rate was 3.25%. Either number is a considerable improvement on the two decades before 1994. Real per capita growth has been a little over 1% per year since the beginning of 1994. In other words, on average South Africans grew wealthier at a rate slightly faster than 1% per year since 1994. In comparison to strong growing economies, this is a mediocre performance, although it is steady but an unspectacular performance compared with most developing economies.
Between 1995 and 2002, the number of people employed in South Africa grew from 9 557 185 to 11 157 818. This represents 1 600 633 net new jobs. These are net new jobs because this is increase in jobs after accounting for many jobs lost in some sectors. However, during the same period, the number of unemployed people grew from 1 909 468 to 4 271 302, an increase of 2 361 834 according to the strict definition. This includes an increase in the base numbers of those seeking work, which, now includes a greater proportion of women from rural areas. 2002 figures show that out of a total of 8.9 million workers (i.e. excluding employers, selfemployed and those working without pay) 1 115 000 were temporary (12.5%), 567 000 were 'casu al' (6.
A key point to note regarding the job market is that while many unskilled workers are unemployed, there is a shortage of suitably skilled workers which is a constraint on expansion. Skill sets often identified as those in short supply are financial service and information and communication technology skills. These include mid-level skills accessible to matriculants and diplomates.
Reshaping of trade and industri a l policies is reflected in an improve d balance of trade and a shift from p ri m a ry ex p o rts to higher va l u e d added secondary and tert i a ry sector ex p o rt s. These achieve m e n t s are due to the Gove rn m e n t 's success in supporting and promoting mu l t i l a t e ral rules-based global tra ding regimes (see IRPS) and the use of general and targeted supply-side measures.
Temporary workers (out of 8.9m workers) 1 115 000 (12.
Casual workers 567 000 (6.
Seasonal workers 62 000 (0.
Key initiatives included the renegotiation of the Southern African Customs Union (SACU) Agreement; the negotiation of a Southern African Development Community (SADC) free trade agreement; and the negotiation of a bilateral trade and aid agreement with the European Union (AU). The unilateral American African Grouth and Opportunity Act provision has also aided South Africa's exports. These agreements are contributing to new trade activity and to new FDI into South Africa. Currently, South Africa is a leading developing country participant in the Doha Round of the World Trade Organisation WTO; it has entered free trade talks with the USA; it is pursuing a free trade agreement with the Latin American members of the Mercosur; and it is discussing the possibility of a bilateral trade agreement with India.
In terms of trade policy, the main programme has been the implementation of tariff reform in line with South Africa's WTO commitments, combined with modernisation of industry. In the late 1990s, in the course of the development of the Integrated Manufacturing Strategy and the Micro-economic Reform Strategy, government's view shifted in two main respects: firstly incentive programmes were extended beyond traditional manufacturing sectors; and secondly key industries were targeted for special attention. These included growth sectors like autos and tourism, and cross-cutting sectors like information and communications technology. The sectors are now becoming a focus for the allocation of industrial development resources, including science and technology, and Human Resource Development (HRD) funds.
A coherent policy framework was put in place which focused primarily on the key economic sectors of telecommunications, energy, d e fence and tra n s p o rt . The reasons for refo rming State-Owned E n t e rp rises (SOEs) included improving the access of the historically disadvantaged to services such as telecommunications and electricity; increasing efficiencies, and hence reducing costs; and using the revenues earned through the disposal of state assets to reduce public debt. One major constraint was that restructuring had to be carefully managed as the SOEs employed tens of thousands of workers. Another consideration was that in restructuring corporations, BEE would be encouraged.
Of these objectives, the one achieved unambiguously was the reduction of public debt by R24 billion. Other consequences include the creation of a more entrepreneurial class of those interested in restructuring activities, the advancement of regulation, the opening up of some industries to competition and the widening of share-ownership. Commercialisation and/or partial privatisation has led to the reduction in public debt by raising funds from the private sector, thereby reducing pressure on the fiscus, and creating an environment for competition. The creation of greater competition still has to be achieved in some sectors. Greater competition and further improvements to the regulatory environment should ensure that certain nationally strategic services such as energy, transportation and telecommunications are provided at low cost and high quality. As in the rest of the economy, there has been a shedding of jobs mainly from "modernisation" (improvement of business processes and the introduction of new technology). There has been a strategic shift in recent years to tighten oversight over financial, economic and socio-developmental activities of SOEs to ensure that they are aligned to the objectives of the developmental state.
In the process of restructuring state assets and liberalising markets previously controlled by state monopolies, new systems of regulation have been established. These include a range of new regulators in the transport sector, in the telecommunications sector and in the energy sector. Though South African regulators are relatively well-endowed by developing -country standards, they are generally weak in relation to the corporations they are regulating. In addition, relations between the regulators, their boards/councils, and government vary considerably, even in relation to regulators that have similar functions.
South Africa has made great progress in introducing and amending labour laws that give employers and employees certainty and security in their employment relationship. The huge fall in person-strike-days per year bears testimony to the success of the policy. The balance between the degree of job security and the kind of labour market flexibility that encourages employers to take on new employees is still being negotiated amongst the economic roleplayers.
The basic level of company taxation meets South Africa's needs and is consistent with international practice. However, there are concerns raised about the system from two contrasting perspectives. On the one hand, there are concerns that "creeping" forms of taxation are clouding the clarity of the basic system. For example, the skills levy on wages, the obligations of empowerment programmes, and municipal rates and levies are seen to be unpredictable additions to the tax burden of firms. On the other hand, given the current levels of social inequality and the low rate of commitment of capital to productive investment, it has been argued that further qualitative reductions in corporate tax in the current period may generate further social polarisation. There is also a question of whether there is scope for the design of the tax system further to support developmental objectives, for example, through tax rebates or allowances investment in activities like research and development, employment creation and investment in targeted industries and geographical areas.
The new competition authorities, established under the Competition Act of 1998, have established a reputation for sound performance, much greater than their predecessor, the Competition Board. However, there is concern that the competition authorities have not been as effective in the field of combating prohibited practices, except where those practices are specifically outlawed, such as in merger control. Industry concentration remains high in South Africa, with sprawling conglomerates of the 1980s having given way to industry-focused powerhouses. As a result, price markups in South Africa are high by international standards, especially in certain key intermediate product groups such as beverages, paper and paper products, coke and petroleum products, basic chemicals, basic non-ferrous metals, and, to a lesser extent, ferrous metals.
The experience with regard to small business creation is reflected in the Small Business Council, Khula Enterprise Finance Corporation and Ntsika Enterprise Promotion Agency having made modest impact, though some agencies such as the Manufacturing Advisory Centre programme are considered to be world-class. Small business strategy is currently under review. It remains important to clarify the focus of strategies with regard to distinctively different sectors of the SMME community, i.e. micro businesses (often informal), small businesses, small technology start-ups and medium businesses.
In trying to measure the impact of small and micro businesses on the economy, it was found that in 2001 there were 2.3 million people who owned at least one Value Added Tax (VAT) unregistered company. Of these, only 338 000 owners had employees, a total of 734 000. While this may raise the question of the job creation potential of these enterprises, it also demonstrates the level of self-employment, a large part of which may be survivalist. The contribution of this sector to GDP and employment however bears testimony to a fundamental role that this sector is playing in the South African economy. Data on small and medium enterprises suggests that these enterprises contribute about half of total employment, more than 30% of total GDP; and one out of five units exported is produced in the small and medium sector in South Africa.
Skills development from 6% in 1995 to 15% in 2002.
It remains the case that large numbers of unskilled wo rkers are u n e m p l oyed, while employers cite a shortage of semi and skilled wo rkers as a constraint on ex p a ns i o n . A significant amount of resources have been directed t owards both general education and skills training and has also focused considera ble attention on r e s t ru c t u ring the institutions that d e l i ver HRD and skills. The target of 3 000 completed learn e r s h i p s was exceeded in 2001, although, i n s t i t u t i o n a l l y, the Sector Education Au t h o ritics and Tra i n i n g (S E TAs) have been slow in meeting their objective s. Both publ i c and pri vate-sector employers have been slow in taking advantage of the training opportunities ava i l a bl e despite the skills shortage being cited as one of their major cons t ra i n t s. H oweve r, perfo rmance is i m p r oving, and the focus on the p e r fo rmance of the SETAs should yield better results.
There is a relatively large reservoir of young unemployed matri culants and even graduates of t e c h n i kons and unive r s i t i e s. T h e percentage of unemployed gra d uates of tert i a ry institutions gr ew For Afri c a n s, the percentage of u n e m p l oyed graduates rose from 10% in 1995 to 26% in 2002. M a ny of these unemployed people h ave earned degrees and diplomas that have not sufficiently prepared them for the labour marke t . Two messages come out of the d a t a . The first is that school, techn i kon and university progra m m e s are not always effe c t i vely geared t owards employa b i l i t y. The second is that school-goers and schooll e avers do not have sufficient guidance regarding practical study and career paths.
The proportion of top managers who are black grew from 12% to 13% between 2000 and 2001, while the number of senior managers grew from 15 to 16%. The proportion of skilled professionals and middle managers grew even more slowly, by 0.2%. This shows that empowerment in the workplace is continuing, but very slowly. Progress was slow in extending black ownership, with a recent estimate of black equity in public companies indicating 9.4% in 2002, compared with 3.
Occupation Managers, seniorofficials, legislators Professionals, associate professionals, technicians 155062 43 228302 44.3 205652 56.4 287087 55.7 814428 58 974662 61.4 583232 41.3 613575 38.
1997, from being virtually nonexistent before 1994. The number of Previously Disadvantaged Individual (PDI) directors of public companies drew from 14 (1.2%) in 1992 to 438 (13%) in 2002, but the proportion of PDI executive directors remained very small. These trends are expected to improve with the implementation of the broad-based empowerment programme of government.
As far as women are concerned, their progress in the workplace has been equally slow. Just 13% of top managers in 2001 were women, only 1% better than 2000. Women in senior management grew a little faster, by 1.7% to 17.7%. Evidence from the Census 2001 suggests that the proportion of black managers and professionals has increased relative to their white counterparts although the rate of change is still very slow with the proportion of black managers, senior officials and legislators rising from 42.5% in 1996 to 44.3% in 2001. Progress in professional, associated professional and technicians shows that blacks now comprise 61.4% of these groupings in 2001, up from 57.6% in 1996.
The progress in industrial policy has not yet had significant payoffs in the form of greater levels of domestic innovation and R&D. Government has set up an effective system of national innovation with a number of imaginative innovation support programmes. Innovation levels would have fallen further had these measures not been introduced. The 2002 R&D Strategy established new, relevant missions for the national system of innovation, of which the first example to be operationalised is the Biotechnology Strategy. Expenditure on R&D averaged around 0.75% of GDP for most of the 1990s, and is currently estimated at about 0.8%.
By most international benchmarking measures the competitiveness of the South African economy has improved since the early 1990s. Two key indicators are the improvement and diversification of exports, and the significant improvement in labour productivity. However, most measures still indicate that the availability of skilled labour remains a key weakness. Other concerns are the cost of transport and telecommunications, which are key factors in an economy at such great distance from major world markets. Hence the focus of the microe conomic reform strategy on input costs and skills. A great deal remains to be done in respect of these factors. Conclusion The Gove rnment has been successful in ensuring macro-economic stability, improving the t rade regime, and taking adva ntage of the country 's natura l resources and financial and phy s ical infra s t ru c t u r e. U n fo rt u n a t e l y, the country 's skills base, the volatility of the exchange rate and the interest ra t e, the cost of inputs such as tra n s p o rt and telecommun i c a t i o n s, lack of competition in the domestic market, and poor perceptions of Africa and southe rn Africa are holding back higher rates of inve s t m e n t . There is an o p p o rtunity to better use the infras t ructure to provide low-cost servi c e s, to continue to add more value to the processing and manu fa c t u ring sectors and to reduce South Afri c a 's risk rating through better marke t i n g . H oweve r, competition from Asia and other part s of Africa, slow improvements in skills and input costs, and we a knesses in implementation continue to hold back such progr e s s. The global economy will continu e to have implications for the domestic economy.
There are many factors that bedevilled an efficient and effe c t i ve functioning of the JCPS depart m e n t s b e fore 1994:t h ey broadly lacke d i n t e grity and legitimacy; their mandates and functions were va g u e and ambiguous and largely directed at shoring up an illegitimate syst e m; t h ey often functioned in an unco-ordinated manner; t h ey we r e not subject to any effe c t i ve and c r e d i ble oversight and control m e c h a n i s m ; t h ey were chara ct e rised by an uneven distri bution of resources between the tra d i t i o n a l white and bl a ck areas; and the approach to fighting crime did not include addressing the main causes t h e r e o f.
Tra n s fo rmation of the security and c riminal justice functions was therefore essential in bringing about l e g i t i m a c y, accountability and effe ct i ve n e s s, while at the same time s t riving to reduce the levels of cri m e and enhance stability and securi t y. The tra n s fo rmation process has resulted in the departments being subject to effe c t i ve, credible and ye t u n even oversight and control mecha n i s m s. F u rt h e r, the depart m e n t s h ave played a critical role in reducing political violence and securi n g the va rious electoral processes. Outside the country, the securi t y s e rvices are no longer invo l ved in destabilisation activities but instead i nvo l ved in peace support and disaster-relief opera t i o n s.
in respect of gender, disability and ra c e. The integration process has also enabled the Gove rnment to d evelop and implement unifo rm rules for these depart m e n t s throughout the country. This has been part i c u l a rly important in respect of the court s, the intellig e n c e, police and defence funct i o n s.
E f fo rts directed at enhancing the capacity of the justice and securi t y d e p a rtments constituted an important element of the tra n s fo rm a t i o n p r o c e s s. These interventions have yielded results in certain instances, for instance the Au t o m a t e d F i n g e rp rint Identification System (AFIS) is helping the police process i nvestigations more quickly and effic i e n t l y. The equipment that has been purchased for the South A f rican National Defence Fo r c e (SANDF) is expected to enable it to e f fe c t i vely patrol South Afri c a 's E x c l u s i ve Economic Zone and t h e r e by protect international maritime tra f f i c, combat tra n s n a t i o n a l organised cri m e, including sea piracy and the illegal exploitation of South Afri c a 's maritime resources. Owing to its enhanced capacity, the SAPS is invo l ved in capacity-bu i l ding programmes in seve ral count ri e s : M o z a m b i q u e, Sierra Leone, B u rundi, Tanzania, Uganda and Ke nya.
There remains a need for the justice and security departments and agencies to improve their functioning, and to this extent, they need to f u rther improve co-ordination and, in respect of the police in part i c u l a r, it would be important to further pursue optimal resource utilisation.
Foremost in respect of transforming the judiciary has been the notion of substituting the supremacy of Parliament with that of the Constitution. This shift has repositioned and redefined the independence of the judiciary. The Judicial Services Commission and the Magistrates Commission have made important progress regarding the appointment of members of the judiciary and this has led to an evolution of a singular judiciary that is increasingly representative of South African society. Certain challenges still persist in this regard: the shortage of skilled and experienced black lawyers who can be considered for appointment to the Bench; the orientation of training and outlook in the country's law schools and consequently the judiciary itself; and the conditions of service which are not attractive enough to some lawyers who could be considered for appointment to the Bench.
Over the past few years, many in the judiciary have shown a profound understanding of constitutional imperatives and set out to defend the basic law of the land. This includes many judgments particularly by the Constitutional Court which have reflected progressive interpretation of the Constitution and social rights in particular. Government's response to court judgments has been respectful and helped reinforce the legitimacy of the courts.
Yet in an evolving polity, the issue of the appropriate balance among the three centres - the judiciary, the executive and Parliament - is one that will continually be contested.
At the extreme end of the scale, there have been few instances where individual judges have sought to make patent political statements contesting details of government policy. On the other hand, there have been debates about judgments that are perceived to reflect the racial stereotypes of the past, as well as about a tendency among some to show fixed positions against the Government.
Overall, the debate about the balance among the three centres of the State arises in part from the question whether the judiciary may be tempted to position itself as a "meta-state", above the other centres - a contestation that has arisen in other polities around the issue of "judicial activism". This does raise fundamental questions about the value of the democratic mandate and electoral process within parameters of the Constitution, and the policy choices and trade-offs in the detail of policy-making.
The strategy and plans of the G ove rnment in this regard have been anchored within the National C rime Prevention Stra t e g y (N C P S) . The two elements of the NCPS that have borne visibl e results have been the National C rime Combating Stra t e g y (NCCS) and the Integra t e d Justice System (IJS).
There is evidence that the G ove rnment is beginning to make an impact on the crime situation. S e rious crime levels in South A f rica are continuing to come d own or stabilise. Data show s that, with the exception of " c o mmon assault" and "other theft", all 20 serious crime trends and the four sub-trends of robb e ry with a g gravating circumstances have recently either stabilised or are decreasing compared to the figures since 1994. It should also be noted that the system of gatheri n g and processing statistical data has had to be massive l y i m p r ove d.
The increase in common assault does not represent a real i n c r e a s e, but is the result of specific definitions of crime and of counting rules that were implemented during the optimisation of c rime statistics that were in effe c t from July 2000 to May 2001. T h e increase in"'other theft" wa s insignificant (0.7%). I n t e rn a t i o n a l l y it is accepted that murder is the one crime trend which is not significantly influenced by ove r r e p o rting or underreport i n g . D a t a indicates a ve ry constant and significant decrease in mu r d e r b e t ween 1994 and 2002. The total decrease between 1994 to 2003 was 30.7%. Aggravated robbery has persistently increased since 1996 while other types of robbery have gone up since 1994. It should also be emphasised that close on to 50% of all robberies relate to cellphone theft or misplacement, with high reporting rates for insurance purposes. The so-called high-profile robberies, namely vehicle hijacking and bank-related robbery have gone down 33.7% and 52.2% since data was first recorded in 1996. Whereas these robberies accounted for a quarter (26.6%) of all aggravated robberies reported since 1996, they accounted for 12.8% of all such robberies during the last year.
These trends were achieved within t wo years since the implementation of the NCCS (better known as O p e ration Cra ck d ow n).
Vehicle hijacking 33.
Bank related crime 52.
Cell-phone theft 50% of all robberies s h o rt term (2001 - 2002) in most c a s e s. Some cases of stabilisation can easily turn to decreases if a little more effo rt is spent.
The IJS, on the other hand, through its three sub-programmes (the awaiting trial prisoner project; the reception, channelisation and trial readiness programme; and the pre-trial services programme), has resulted in the speedy finalisation of cases; an improvement in the quality of dockets; and an increase in conviction rates. Evidence of these improvements are reflected in conviction rates which increased from about 78% in 1999 to 81% in 2002. Statistics from a few sampled IJS court centres illustrate that in April 2003, the average case preparation cycle time had reduced from 110 days to 71 days, an improvement of 39 days. In April 2003, there was also an increase in the time of court activity by 29 minutes. In respect of trial readiness of cases, the percentage of cases on the court roll that were ready for trial decreased on average from 39.9% to 35.7% (an improvement of 10,5%) in April 2003 and from 39.9% to 36,7% (an improvement of 8%) in May 2003.
The elements of the NCPS that require further implementation relate to the need to address the causes of crime. Important programmes in this regard are the social crime prevention initiatives, the Integrated Rural Development Programme, Urban Renewal Programme and select elements of the Moral Regeneration Initiative. The cluster has implemented various other initiatives (that complement some of the outcomes referred to above) that are designed to improve its effectiveness and efficiency. These have been Community Policing; the Separation of Judicial and Administrative Functions; the Millennium 10 Point Plan; and the Specialised Courts.
Research reveals that the Community Policing Policy Framework had the most impact in the police service in terms of the manner in which members approached and interacted with those they served. The Community Police Forums (CPF's) have improved the relationship between the police and communities and have led to a relationship of trust between the two. The partnership with Business Against Crime has led to an 80% decline in street crime in targeted city centres and has increased the response time to crime scenes by the police. The implementation of the social crime prevention however, remains uneven and this is largely due to poor co-operation and co-ordination between government departments and across the different clusters and spheres of government.
The separation of judicial and administrative functions involved the freeing of judicial officers of their administrative tasks thereby enabling them to spend more time in court. This initiative has been successful in some courts because it allowed productivity by presiding officers to increase. This has led to a reduction in case backlogs, as well as a reduction in the number of postponed cases. The Millennium 10 Point Plan, in part, has introduced the Saturday and Additional Courts, which have contributed to a finalisation of cases and a reduction in the backlog of cases pending trial. In respect of the Sexual Offences Courts, the personnel are better trained regarding how to deal with victims and witnesses and specialised training has been provided for the prosecutors. A combination of the above and other factors has resulted in improved effectiveness.
The final component of the criminal justice system is Correctional Services. The challenge for this component is to deal with overcrowding, develop and implement an effective rehabilitation programme, fight corruption in prisons and within the ranks of officials, improve prison conditions and maintain the safe custody of prisoners. Various initiatives have been implemented in order to alleviate the problem of overcrowding in prisons. Among others, these have been the building of new prisons; the introduction of alternative sentences; the promotion of correctional supervision; the awaiting trial prisoner project and the parole system - inclusive of Presidential pardons. In terms of security in prisons, escapes had been reduced from 1 244 in 1996 to 325 in 2002. These include escapes from prison, court, work teams, public hospitals and during transportation.
The above initiatives have only yielded limited results. It is evident that improved efficiencies in the police and the justice system (as a result of the training of detectives, the AFIS, the IJS initiatives, to name a few examples) are going to compound the problem of overcrowding.
Correctional Services have indicated that with a 60% repeat offender rate it has not been implementing an effective rehabilitation programme (and programmes that would be employed to re-integrate prisoners into families, communities and society at large) for its various categories of prisoners but this is currently receiving urgent attention. Furthermore, it is establishing an effective investigative capacity to deal with corruption and other misdemeanours.
It is clear that the cluster requires increased capacities, particularly in respect of the challenge of reducing the backlog of cases pending trial; overcrowding in prisons; developing and implementing an effective rehabilitation programme, among others. Furthermore, it needs to continue reducing the levels of crime, improve the effectiveness of partnerships with organs of civil society, and enhance co-ordination within itself and with other clusters, notably the social and economic clusters.
Rape levels increased by about 10% after 1994, then remained stable until returning to 1994 levels in the last year. Government has implemented several measures, among which have been an audit of resources that are available to state departments; the segmenting of victims, notably children, for the purposes of determining risk factors; the revision of the definition of and the requirements for the crime of rape; the establishment of Sexual Offences Courts throughout the country; empowering prosecutors, police, magistrates and doctors with specialised skills; ensuring that dangerous sexual offenders are kept under long-term supervision upon release from prison; the creation of a new crime in respect of child prostitution; the establishment of Specialised Family Violence, Child Abuse and Sexual Assault Units in the SAPS; the implementation of measures that enable victims to co-operate better; and the implementation of minimum sentences in respect of convicted persons.
As a result of the above measures, the capacity of the relevant State institutions to effectively deal with sexual assault crimes has been enhanced. This has led to a high conviction rate of suspects. The challenge remains that rape remains a difficult crime to prevent, particularly from the perspective of state departments. This matter requires partnerships with communities and structures of civil society, inclusive of the media, in order to enhance public aware-ness and the implementation of preventative measures. An area of concern in this regard relates to the number of cases that remain unfinalised - either with an acquittal, a conviction or a decision not to prosecute. The number of finalised cases went down from 1998 and this is chiefly caused by withdrawals of cases. For instance, of the cases that were referred to court in 2000, 53% of them were withdrawn.
As noted above, vehicle hijackings decreased 34% whilst bank-related crime decreased 52% since 1996. White-collar crime has reduced about 24% since 1994 and drug-related crime has remained stable. Various measures have been implemented to help the Government fight criminal syndicates: the creation of the Directorate of Special Operations (DSO), the enactment of the Protected Disclosures Act, the Prevention of Organised Crime Act and the Financial Intelligence Act. The above measures facilitate easy detection of criminal activities, in part because they protect whistle blowers (Protected Disclosures Act), enable the Government to confiscate benefits accruing from criminal activities and create an intelligence organisation that co-ordinates efforts of the private and public sectors, particularly against money laundering. The Interception and Monitoring Bill will enable the intelligence and law enforcement agencies to monitor communication over cellular phones.
The fight against organised crime has also been pursued in partnership with multilateral organisations and regional countries. This cooperation has yielded good results: significant arms caches have been identified and destroyed in Mozambique and approximately 741 stolen vehicles were recovered by January 2002. The cluster has registered significant gains against organised crime syndicates. For example, more than 200 syndicates had been neutralised out of 300 that were identified and investigated.
The Specialised Commercial Crime Courts have recorded high productivity an average 4.
4.67 hours per day and conviction rates. Regarding the latter, the conviction rate in 2001 was 86%. In 2002 it was 96.2% and by mid-2003 it stood at 93.54%. The DSO on the other hand achieved an 85% conviction rate in the years 2001 and 2002. This was accompanied by an increase in the number of arrests in 2002 and 2003. The Criminal Assets Recovery Unit won more than 129 forfeiture orders involving R76 million and frozen assets worth more than R500 million. The police have arrested more than 2 000 syndicate members during the period under review and seized illicit assets worth more than R4billion.
With regard to borderline control, the South African National Defence Force has been assisting the SAPS execute this function. The deployment of the SANDF has resulted in the arrest and deportation of thousands of illegal immigrants, the confiscation of stolen vehicles and illegal firearms, and the confiscation of fraudulent and illegal Identification Documents and Passports, to name but a few. In respect of control in ports of entry, the cluster has developed a system that will facilitate trade and commercial activities and enable the relevant departments to combat cross-border crime and other threats to national security. This has entailed upgrading the infrastructure, including ICT in select and priority ports of entry, rationalising responsibilities among the relevant departments and entering into agreements with the neighbouring countries, particularly in respect of operating procedures, amongst others.
Border control, however, continues to have serious challenges - the absence of an overarching strategy, inadequate infrastructure, particularly information and communication technology, inadequate resources, and uneven security standards across the relevant facilities (airports, harbours and land ports of entry).
Various initiatives have been implemented to reduce and eradicate this phenomenon such as the development and implementation of guidelines and regulations in respect to access to ranking facilities and routes. Other operations were instituted with a view to investigating, arresting and prosecuting the perpetrators of taxi violence. These operations have resulted in a number of people being convicted for various transgressions. Furthermore, several illegal firearms and stolen vehicles were confiscated. These interventions have arguably reduced the incidents of taxi violence but it has not been eradicated. Sporadic attacks continue to take place as well as the extortion of funds from members of taxi associations.
The cluster has implemented various initiatives geared at regulating ownership of legal firearms and reducing the number of illegal firearms: the campaign that called on people to voluntarily hand over their firearms; the destruction of redundant fire-arms that were in the possession of the SAPS; the auditing of firearms that were in the possession of various government departments; operations that were launched in order to trace and recover illegal firearms in high-crime areas; joint operations with the Mozambican authorities to investigate and destroy caches of weapons, and participation by the cluster in the development of the UN Protocol agains Illicit Manufacturing of and Trafficking in Firearms. As a result of the above operations and interventions, the cluster has destroyed in excess of 80 000 firearms.
The cluster has further implemented other measures: new control measures have been implemented in ports of entry; the harmonisation of permits for firearms and ammunition; the standardisation of firearms that are used for policing purposes and measures that are intended to further regulate the continued ownership of firearms that would have belonged to deceased persons. However, indications are that these measures have not as yet totally stemmed circulation of illegal weapons.
As a result of Operation Rachel, which is conducted in co-operation with the Mozambican authorities, the police realised the following gains between 1995 and 2003. They destroyed 25 838 rifles; 4 786 sub-machine guns; 13 798 106 small-arms ammunition; 13 503 grenades; 12 448 mortar bombs; 2 040 light and heavy machine guns; 13 057 projectiles/ rockets/ missiles, to cite a few examples. The impact firearms have on serious and violent crimes suggests that more work is required in this regard.
Several challenges have been dealt with in this regard: improving security in government, seeking to end political violence and bringing to an end the spectre of urban terrorism.
Notwithstanding the various initiatives that have been implemented, the security of government remains inadequate. This is particularly the case in respect of the state of protection accorded to Very Important Persons and their residences; the security of government information (which is compounded by the absence of an enabling policy regarding vetting); and the general uncertainty that attends the state of readiness of security-related disaster management systems.
The political interventions that we r e implemented have ev i d e n t l y reduced the levels of political intole rance and violence part i c u l a rly in K waZulu-Natal, and some areas of the Eastern Cape and Gauteng where some incidents persisted after 1994. Pa rties now tend to use Constitutional and legal means to settle disputes and achieve their o b j e c t i ve s, though isolated incidents do occur. As a result of the operat i o n s, seve ral suspects were convicted, though not all cases have been fully pursued.
The Truth and Reconciliation Commission process has run its course and has in many respects been commendable in identifying the root causes of political violence, but also broadly matters pertaining to gross human rights violations. Work continues to implement its recommendations and take forward the objectives of national reconciliation and restoring the dignity of victims.
During the period under review, the Government dealt effectively with the spectre of terrorism, predominantly in three respects: urban terrorism, right-wing extremism and international terrorism. The Government sought to bring the phenomenon of urban terrorism to an end, in part, through investigating and prosecuting the people who were responsible for terror. On account of co-ordinated operations between intelligence and law enforcement agencies, the Government was able to convict the perpetrators. This success led to an almost complete end to this phenomenon in the Western Cape in particular.
Lately, white right-wing terrorist groups have sought to challenge the legitimacy of the democratic State and perpetrated acts of terror. On the basis of co-ordinated investigations, the law enforcement authorities uncovered the plans of the affected people, confiscated large amounts of firearms, ammunition and explosives, prevented some assassination plans and arrested and are prosecuting more than 20 suspects. The law enforcement authorities have been in liaison with their counterparts abroad with respect to international terrorism. Furthermore, the Government is implementing the relevant resolutions of the UN in this regard.
In broad term s, the policy fra m ewo rk and the pri o rities that the cluster has implemented continu e to be va l i d . What is evident is that the capacity of the justice and s e c u rity departments requires to be systematically enhanced in order to accelerate service delive ry. This requirement is urgent in respect of the criminal justice system - part i c u l a rly the need to sustain the interventions that have been implemented with a view to a l l eviating the backlog of cases pending tri a l . A corresponding init i a t i ve will have to be implemented in Correctional Serv i c e s, part i c u l a rly the urgent need to develop and implement an effe c t i ve rehabilitation progra m m e. Evidence from the JCPS and Social clusters howeve r indicate that crime will not be significantly reduced without the i nvo l vement of ordinary citize n s and systematic effo rts to deal with the corrupt fifth column in securi t y related depart m e n t s. Although gove rnment has been building effe ct i ve crime prevention part n e r s h i p s with civil society, it also needs to focus on moral regeneration and n a t i o n - building in order to improve the ove rall environment and to promote crime preve n t i o n.
Some of the most significant changes in government policy since the inception of democracy in 1994 have occurred in the IRPS functions of the State.
prioritise commitment to the interests and development of Africa promote South-South co-operation and the transformation of North-South relations reform and strengthen the multilateral rules-bound political, economic, security and environmental organisations in order to advance the interests of developing countries.
While South Africa has made significant progress in international relations since 1994, some objectives have been difficult to promote, while others need greater effort if they are to be fully realised. The performance and success of a country's international relations policies are contingent upon a range of other actors and variables in the international arena, including states and non-state organisations, of which the latter are often better resourced than smaller countries. Unlike many domestic policies under the direct control of government, external issues, particularly peace and security, are complex as its dynamics are determined by many international, regional and local variables. There is, however, a general agreement that South Africa is playing a leading role, especially in advancing the interests of developing countries. This derives from, among other factors, the geographic location of the country, the policy challenges facing South Africa at the confluence of global socio-economic challenges, the nature of our history and transition to democracy, and the quality of the country's leadership. The challenge is thus to use this influence to promote South Africa's international relations and domestic objectives.
The IRPS functions seek to a d vance South Afri c a 's national i n t e r e s t s, part i c u l a rly as these relate to nation-building, the promotion of human ri g h t s, securi t y, d i s t ri bu t i ve wealth creation, e m p l oyment creation, trade creation and diversification, and i n f l ows of FDI. South Afri c a 's security interests have been broadly conceptualised to incorp o rate milit a ry, economic, social and env i r o nmental issues. This is important fo r i n t e grated policy-making, part i c ul a rly in an era of mutual vulnera b i l ities and a plethora of " n ew " s e c u rity challenges, including terrori s m , f l ows of illegal migrants and r e f u g e e s, illicit small and light arm s t ra d e, international crime syndic a t e s, money laundering schemes, narcotics tra f f i cking, env i r o n m e n t a l d e gradation, the spread of commun i c a ble diseases (such as HIV/AIDS), and trans-border cri m e. South Africa has also sought to focus the international agenda on addressing pove rty and the underd evelopment of the South.
All government departments have had to transform and restructure since 1994. This has been a particularly important task for those departments mandated with formulating and implementing South Africa's IRPS priorities, as these departments represent and project the 'face' of South Africa internationally but were in the past complicit in preserving the old Apartheid order.
The Defence component of the cluster has its own values and cult u r e. It was created through the successful integration of fo rm e r members of statutory and nons t a t u t o ry forces from seven diffe rent military back grounds and cult u r e s. Legitimacy in the eyes of the population has been achieved by a number of means, such as adopting a new security doctrine and e t h o s, becoming more representat i ve of the South Africa population; rigorously applying affirm a t i ve a c t i o n ; successfully adjusting to being an all-volunteer fo r c e ; s u ccessfully implementing civil ove rsight and adopting new symbols. D e fence has faced, and continu e s to confront, numerous depart m e ntal challenges, including aligning regional ex p e c t a t i o n s, the fo r c e design and the defence bu d g e t ; introducing new weapon systems to modernise the South Africa Air Force and South Africa Nav y ; implementing a human resource s t rategy to rejuvenate the SANDF and to feed the Reserve Fo r c e ; c r eating a smaller but more effe c t i ve SANDF with increasing responsibili t i e s ; building an effe c t i ve Earl y Wa rning Capability through increased intelligence and defe n c e foreign relations capacity; a n d d eveloping a unique defence culture for South Africa, part i c u l a rl y under the impetus of opera t i o n a l d e p l oyments for peace missions. By the end of the first decade of freedom, most of these depart m e ntal challenges have been successfully met, managed or resolve d.
The Foreign Affairs component of the cluster started off after 1994 with a highly fragmented and ideologically polarised staff, and the i n t e gration of the old bu r e a u c ra c y with the new corps of officials wa s not always a smooth process. Related problems have been insufficient capacity, human resource d evelopment and perfo rm a n c e m a n a g e m e n t . The tra n s fo rm a t i o n and the alignment of Fo r e i g n A f fairs with South Afri c a 's fo r e i g n policy principles occurred in three p h a s e s. The first was a cri t i c a l assessment in 1996 of the key global challenges facing South A f ri c a 's emergent foreign policy. The outcomes of the process wa s a focus on protecting and promoting South Afri c a 's national interests and va l u e s, the re-positioning of South Africa in the global env i r o nment, and the recognition of the interdependence of foreign policy with economic and security issues. A second significant deve l o p m e n t identified two broad but mu t u a l l y interdependent categori e s, namely wealth creation and securi t y. T h e third phase, commencing duri n g 2000, included as a central pri o ri t y the vision of the renewal of Afri c a , the eradication of pove rty and u n d e r d evelopment, and the deve lopment of a just and equitabl e wo rl d . As an extension of this p h a s e, during 2001, Foreign Affa i r s u n d e rtook an assessment of its capacity requirements which indicated that it was not adequately capacitated to fulfil its mandate and to achieve its vision.
The intelligence services jointly and separately provide info rm a t i o n on internal and ex t e rnal securi t y and related matters. O f f i c i a l National Intelligence Pri o ri t i e s were defined in terms of broad cate g o ri e s, such as economic and c rime intelligence or intelligence related to political developments in the region, continent and in a global contex t . These pri o rities fo rm e d the basis of their programme of wo rk and services to key clients. Since then, Intelligence has pri o ritised and honed its functions and d e l i ve ry system (part i c u l a rly its g e o graphical and thematic fo c u s) , and equipped and positioned the s e rv i c e s ' human, technical and other resources to efficiently and successfully fulfil its intelligence production requirements. S o m e p r o gress in all dimensions of the t ra n s fo rmation impera t i ve has been r e c o r d e d.
South Africa has successfully normalised its relations with the wo rl d . The country has joined all significant regional, continental and mu lt i l a t e ral institutions, and is active l y promoting its own interests (political and, economic) as well as that of Africa and the South. S o u t h A f rica has built bilateral relations with Africa, the South, and strengthened relations with the N o rt h . The indicator for this is the significant level of fo rmal diplomatic representation abroad, which includes increased defence and foreign commercial representation.
A second indicator is the nu m b e r of mu l t i l a t e ral conferences and major events which the country has hosted since 1994.T h e s e i n c l u d e : the United Nations C o n ference on Trade and D evelopment (UNCTAD) IX Summit (1996), Non-Aligned M ovement Summit (NAM) (1 9 9 8) , C o m m o n wealth Heads of G ove rnment Meeting (1999), Wo rl d AIDS Conference (2000), UN Wo rl d C o n ference Against Racism, Xenophobia and Related D i s c rimination (2001), Wo rl d Summit on Sustainabl e D evelopment (WSSD) (2002), and the African Union (AU) Summit (2 0 0 2) . South Africa has also hosted a number of hallmark sports tourn am e n t s, including:the Rugby Wo rl d Cup (1995), African Cup of Nations (1996), Athletics Wo rld Cup (1998), All Africa Games (1999) and the C ri cket Wo rld Cup (2003). T h e s e events have raised South Afri c a 's i n t e rnational profile, and have gene rally had a positive impact on the South African economy.
South Afri c a 's re-entry into the i n t e rnational arena in 1994 required that the country ex p a n d its foreign representation to count ries that had no previous relations with South Afri c a . This necessitated recruitment, capacity-bu i l d i n g , t raining and tra n s fo rming of South A f ri c a 's diplomatic corp s. The current racial demographics at fo r e i g n missions abroad has gr e a t l y i m p r oved since 1994 to reflect South Afri c a 's dive r s i t y, namely a f rican (50%), white (37%), indian (8%) and coloured (5%). R e s e a r c h r eveals that South Afri c a 's diplom a t s, given their limited resources, are functioning effe c t i ve l y.
(e. g . Justice College, South Afri c a n Management and Deve l o p m e n t I n s t i t u t e, NIA, Migration Tra i n i n g Unit in DHA, and the Fo r e i g n S e rvice Institute) should be coordinated and integrated more e f fe c t i ve l y.
Since the late-1990s, gove rn m e n t has embarked on an active imaging, b randing and marketing campaign of South Afri c a . This includes gove rnment initiative s, support for nong ove rnmental initiatives (e. g . Proudly South African campaign), hosting a number of hallmark eve n t s (major sports fe s t i vals and UN conferences), and the creation of the I n t e rnational Investment Council (IIC), the International Marke t i n g Council (IMC), and the Intern a t i o n a l Task Force on Info rmation Society and Deve l o p m e n t.
These events appear to have been i n s t rumental in accounting for the upsurge in tourism to South Afri c a , in addition to an attra c t i ve ex c h a n g e rate for tourists and perceptions of the country as being relatively safe from extremist acts. G ove rn m e n t has also promoted new fo rms of t o u rism (eco-tourism, cultura l t o u rism, adventure tourism, Wo rl d H e ritage Site tourism, confe r e n c e t o u rism and sports touri s m). T h r e e Transfrontier Pa rks have also been e s t a bl i s h e d : the Kgalagadi Transfrontier Pa rk (South Africa and B o t swana) launched in May 2000; the Great Limpopo National Pa rk (South Africa, Zimbabwe and Mozambique) launched in December 2002, and the !Ai! A i s / R i c h t e r s veld Transfrontier Pa rk b e t ween South Africa and Namibia, launched in July 2003. The increase in tourism, described below, is also reflected in the fact that the nu m b e r of international airlines serv i c i n g South Africa has increased from 53 in 1994 to 64 in 2003 with many more flights now being scheduled than in the pre-1994 peri o d.
International Tourist Arrivals centred upon personal iconograp hy, critical though this may be d u ring particular stages in the evolution of a polity. The challenge is to move towards a cultural marke ting policy as the basis for projecting South Africa as more than just a tourist destination, but as a p r ovider of a host of other goods, s e rvices and high-tech industri e s.
South Africa has demonstrated a strong commitment to promoting the interests of the African contin e n t . G ove rnment has successfully diversified and expanded South Africa's trading netwo rks and ex p o rt marke t s. A p a rt from the c o u n t ry 's traditional trading partn e r s, South Africa has deve l o p e d more ex t e n s i ve relations with South America, Asia and Afri c a . As part of its trade stra t e g y, the G ove rnment has identified a nu mber of " s t rategic part n e r " c o u n t ri e s with which to develop economic relations through bilateral Fr e e Trade Agreements (FTA s) , although it is not seeking FTA negotiations with all of them at this stage.
The W TO : SA played an important role in the launch of the n ew W TO Doha Round (which emerged with a deve l o p m e n t a l a g e n d a).
The Trade and Deve l o p m e n t C o - o p e ration Agr e e m e n t (TDCA) with the European Union, which came into effe c t on 1 Ja nu a ry 2000 (with the Wine and Spirits Agreement not yet ratified, and no agr e e m e n t on Fisheri e s).
The SADC Trade Protocol wa s signed in 1996, and subsequently there were negotiations around revised rules of ori g i n.
The new SACU Agreement wa s concluded in October 2002.
S AC U - E F TA negotiations to e s t a blish a Free Trade Area (F TA) were held in May 2003 (to be concluded in Ja nu a ry 2 0 0 5).
S ACU-US FTA negotiations s t a rted in May 2003 (to be concluded in Ja nu a ry 2005).
South Africa's investment climate and regime have undergone significant transformation and liberalisation since 1994. A number of policies and interventions have been implemented to significantly increase South Africa's attractiveness to foreign investors. Since 1994, South Africa has recorded net positive FDI inflows, although, as can be seen from the table below, foreign investment has remained relatively low and has fluctuated. FDI stock as a percentage of GDP in 2000 was distributed as follows: primary sector (28.9%), secondary sector (26.4%) and tertiary sector (45.5%).
Most FDI inflows have entered South Africa through state-leveraged deals and the privatisation of state assets. Export-oriented efficiency-seeking manufacturing investment has been actively promoted in order to generate employment, transfer skills, and stimulate innovation and exports in local firms (e.g. the automobile and components industries). South Africa is also a capital exporter as domestic companies internationalise by investing in Africa (southern Africa in particular) and offshore. Government has encouraged investment in Africa through the phased liberalisation of capital controls.
In the past ten ye a r s, South Afri c a has promoted regional integra t i o n predominantly within the context of the SADC, the SACU and the Common Monetary Area. T h e launch of NEPAD has prov i d e d much-needed long-term political direction to South Afri c a 's regional i n t e gration effo rts in Afri c a . In line with the decisions taken at the SADC Summit in Mozambique in August 1999, South Africa has supp o rted the restru c t u ring of SADC. The Regional Indicative Stra t e g i c D evelopment Programme (RISDP), one of the products of restru c t u ring, is intended to provide SADC member states with a coherent and c o m p r e h e n s i ve development agenda on social and economic policies over the next decade, with clear targets and time fra m e s. The challenge is to ensure that the RISDP is aligned with the NEPAD vision, and to build sufficient capacity within the SADC Secretariat to make it an effe c t i ve implementation agent for NEPAD and the AU. F u rt h e r m o r e, South Africa has dri ven and p r ovided technical input to establ i s h a fra m ewo rk for macro-economic c o nvergence in the region. S o u t h A f rica also co-operates with SADC in the Regional Energy Planning N e t wo rk.
South Africa played a leading role in reconstituting the Organisation of A f rican Unity (OAU) into the AU as a more effe c t i ve pan-African continental body, and in crafting and promoting the Millennium D evelopment Plan, and the New A f rica Initiative, which came together with the OMEGA Plan to make up NEPA D. N E PAD was launched as the socio-economic progra m m e of the AU at the Durban Summit in July 2001, at which South Afri c a became the first Chair of the new o r g a n i s a t i o n . One of the most i m p o rtant challenges for the AU 's future will be to ensure that the i n t e gral organs of the new AU system, part i c u l a rly the Commission; the Pa n - A f rican Pa rl i a m e n t ; t h e Peace and Security Council; t h e E c o n o m i c, Social and Cultura l Council, and the African Centra l Bank, are put into effect, and that an institutional culture is encouraged whereby the ru l e - b o u n d s t ructures are effe c t i vely used by A f rican states to advance the d evelopment of the continent.
Strong commitment to promoting the interests of the African continent mandate to ensure that the policies and practices of participating states conform to the agreed political, economic and corporate governance values, codes and standards contained in the Declaration on Democracy, Political, Economic and Corporate Governance. It is envisaged to be a system of selfassessment, constructive peer dialogue and persuasion, as well as the sharing of experiences among members.
South Africa has since 2001 sought a sustained engagement with the G8 to keep Africa and the concerns of the South on the agenda of the annual G8 deliberations. South Africa's efforts at the continental and regional level are supported by engagements with international financial institutions to shape the international financial and development architecture to become more favourable to African countries and the South. South Africa has promoted the understanding that the International Financial Architecture should promote economic advancement of developing countries, not impede it. Appropriate domestic regulation and institution-building, alongside large-scale technical and financial assistance are critical elements of ensuring net benefits from financial flows. In its capacity as Chair of the Development Committee of the World Bank, South Africa has made an important contribution to translating the Monterrey Consensus on Financing for Development and the WSSD Declaration into an international implementation framework based on constructive co-operation and mutual accountability between developing and developed countries.
Over the past decade, nearly 30 bilateral agreements have been signed with countries worldwide which provide for co-operation in the fields of materials science, manufacturing technology, biotechnology, sustainable management of the environment, exploitation of natural resources and minerals, astronomy, engineering science and advancement of technologies, medical science and public health, and mathematics and science education. During this period, South Africa also significantly leveraged its position in the multilateral S&T arena. In this regard, South Africa has played an important role in raising the profile of S&T on the SADC agenda, particularly developing the S&T component of the RISDP; developing a S&T framework for NEPAD; providing leadership in terms of integrating S&T into the agenda of the Africa, Caribbean and Pacific Group of States; and consolidating co-operation and interaction with multilateral S&T bodies. A number of important facilities/initiatives have been established or are in the process of being established with strong international participation, amongst others: the Satellite Laser Ranging System; the Southern African Large Telescope; the High-Energy Stereoscopic System Project; the HIV/AIDS Vaccine Initiative; the Technology Diffusion Programme; the Biotechnology Programme; the Square Kilometre Array Radio Telescope Initiative and the Pebble Bed Modular Reactor.
It is on the basis of its democra t i c system and emergent culture of human rights that South Africa has sought to promote intern a t i o n a l respect for human ri g h t s, democrac y, and good gove rn a n c e. G ove rnment has approached issues of human rights in concert with other African states and through mu l t i l a t e ral mechanisms such as the UN, OAU / AU and S A D C. It has also played a meaningful role in the promotion and protection of human rights on the A f rican continent through the guidance of the African Charter on Human and Pe o p l e s 'R i g h t s. T h i s s t rategy has been largely successful, although the Gove rnment has not yet ratified the Intern a t i o n a l C ovenant on Economic, Social and C u l t u ral Rights, and is well ove r d u e with the submission of reports on c e rtain human rights agr e e m e n t s, including the African Chart e r.
Since 1994, South Africa has consistently placed a premium on promoting peace, stability and securi t y (including crime management and p r evention) in Africa and the rest of the wo rl d . The country has active l y s u p p o rted the UN and sought to strengthen its mu l t i l a t e ral processes and mandate (e. g . i m p l e m e n ting UN Security Council sanctions regimes and resolutions on the combating of terrorism, refo rm of peace support opera t i o n s, and upholding the UN Chart e r). S o u t h A f rica has made a number of interventions that have generally cont ri buted to peace, stability and s e c u rity in seve ral countries on the continent and beyo n d. T h e s e include Angola, Comoros, the D e m o c ratic Republic of the Congo (DRC), Lesotho (1994 and 1998), R wanda, Burundi, Madagascar, I vo ry Coast, Ethiopia/Eri t r e a , Sudan, and East T i m o r. S o u t h A f rica was invo l ved in the diplomatic resolution of the Locke r b i e c a s e, and has assisted in a nu mber of humanitarian and relief o p e rations in the southern Afri c a n r e g i o n.
Within southern Africa, the Government has sought to promote the development of neighbouring countries, so as to consolidate and promote the comparative advantages that each country possesses. This has included active promotion of investment projects and assistance of various kinds. Further South Afri c a has also, within its means, put into actual practice the principle of debt forgiveness and provided various forms of aid across the region. It has also taken part in regional and continental initiatives to try and assist in resolving political problems.
At mu l t i l a t e ral level, South Afri c a has been actively invo l ved in the fo rmulation of the Protocol on Po l i t i c s, Defence and Security Co o p e ration, which envisages the coll e c t i ve defence and security of the r e g i o n . In this regard, the Stra t e g i c I n d i c a t i ve Plan for the O p e rationalisation of the Organ on Po l i t i c s, Defence and Security Co o p e ration has been dra f t e d . S o u t h A f rica has also been instru m e n t a l in the drafting and finalisation of the SADC Mutual Defence Pa c t . The South Africa intelligence community is invo l ved in the SADC E a rly Wa rning processes, and specifically in the establishment of a SADC Regional Early Wa rn i n g Centre and national centres in all member countri e s. D u ring May 2003, impetus was given to the creation of an African Standby Force and Military Staff C o m m i t t e e.
P r evention and Combating of Te r r o ri s m . At global level, South A f rica played an important role in the establishment of the I n t e rnational Criminal Court.
Within southern Africa, the Southern African Police Chiefs Co-operation Organisation utilised its Constitution and the Multilateral Police Co-operation Agreement to execute and sustain a number of cross-border operations. In respect of firearms, South Afri c a played a major role in the development of the SADC Protocol on Firearms and an implementation plan is being effected.
South Afri c a has contri buted to the d evelopment of a legal fra m ewo rk in respect of international co-operation to combat cri m e, domestically, regionally and intern a t i o n a l l y. Po l i c e c o - o p e ration agreements have been concluded with countries in s o u t h e rn Africa and beyo n d.
South Africa has, since 1999, assisted with post-conflict peacekeeping and has participated in p e a c e keeping missions in three A f rican countri e s, namely in E t h i o p i a / E ritrea, the DRC, and B u ru n d i . The peace mission to B u rundi was undert a ken without a c o m p r e h e n s i ve ceasefire agr e ement in place. This initiated a new approach to peace support operat i o n s. These peacekeeping missions have positively supported the political processes that are still o n g o i n g . It is believed that the like l y future areas of invo l vement on the continent will be in the arena of peace support opera t i o n s, the enhancement of regional securi t y a r ra n g e m e n t s, disaster relief and h u m a n i t a rian assistance. S o u t h A f ri c a 's ability to contri bute to these i n i t i a t i ves is limited by resource c o n s t ra i n t s, part i c u l a rly we a k n e s ses in strategic lift capability, ava i lability of the optimum number of helicopters and logistical reach. Research indicates that this will not be fully remedied by the Stra t e g i c D e fence Procurement Progra m m e.
South Africa has, since 1994, sought to contribute towards the strengthening of a democratic, transparent and rules-bound international political and economic order to advance the interests of developing countries. This has informed South Africa's position on issues of international security, the environment and trade. Multilateralism has also provided South Afri c a with a vehicle through which to advance a number of its IRPS priorities, including human rights, democracy, debt relief, peace and stability, an equitable global trading system, sustainable development, and an enhanced international response to issues of poverty, health and HIV/AIDS. South Africa has used its position within sub-global "blocs' and 'alliances" - such as the NAM and the Commonwealth - as a vehicle through which to push for the reform of bodies such as the UN, International Monetary Fund (IMF), World Bank and WTO.
South Africa has consistently sought the transformation of North-South relations (particularly on security, the environment, debt relief, market access and fairer terms of trade), while consolidating South-South collaboration and solidarity. Its strategy in transform-ing North-South relations has included an ongoing and meaningful dialogue with the North through bilateral meetings, binational commissions, engagement with the G8 countries, and a series of conferences examining mutual issues of concern such as sustainable development, AIDS and racism. South Africa has been elected to chair various South groupings, such as the NAM, UNCTAD, SADC and AU. South Africa and partner countries still face the challenge of unifying the South behind a common agenda for the reform of international organisations and improving in a meaningful way South-South co-operation.
A new alignment of co-opera t i o n b e t ween SA, Brazil and India has evo l ve d . A Tri l a t e ral Commission b e t ween the three countries has been establ i s h e d . S o u t h - S o u t h relations are not, howeve r, simply about "high politics". South Afri c a should also seek to solicit support from its Southern partners fo r N E PAD projects, part i c u l a rly where the countries of the South have unique contri butions to make.
The challenges facing the departments in the IRPS were significant given how closely they were aligned to maintaining the old Apartheid order. By thoroughly revising the mission of national security and the principles underpinning the country's international relations, and by fundamentally transforming the national institutions internally to ensure their alignment with the policies and procedures of the new democratic regime, these institutions have addressed some of the most obvious challenges.
However, like many other large institutions, they are now faced with similar challenges of improving governance, performance and accountability. The post-1994 success of the country in defining its place in the world is remarkable given the resources and capabilities available to it. The IRPS function provides evidence that the Government is able to successfully influence others in an environment where it does not have direct control.
The starting point in assessing the impact of policies and pro grammes of the democratic Government should be an appreciation that 1994 ushered in a new social order, with new objectives and detailed programmes to attain these. As earlier indicated, what characterised the status quo ante were policies meant to exclude, discriminate and brutalise.
In many instances, indicators used to assess progress post-1994 would be completely incomparable to those of pre-1994. For instance, because black people had no legitimate form of political participation before 1994, no measure of political participation would capture the quantum change post 1994. In other instances, such as with maternal mortality, the previous regime did not record data, yet in others, such as with urbanisation, large sections of the population were left out of official statis-tics. What would therefore be critical in making overall findings is only in part a comparison with the pre-1994 situation, but primarily the measure of progress or otherwise being made towards the goals outlined in the RDP.
In pursuing these goals, the State went through a number of interrelated and intersecting phases. These included the setting up v i a ble state structures including the merger of disparate entities and the protracted process to r e s t ructure the Public Service a n d va rious public entities; the fo rm a l isation of the ove rall legislative and policy fra m ewo rk for reconstru c t i o n and deve l o p m e n t ; the setting up of a new provincial and local gove rnment dispensation, and integra t i o n of gove rnment wo rk within and across all the spheres. Although all aspects of this wo rk continue in the current period, it is apparent that the emphasis is changing d e c i s i vely towards implementation.
As can be seen from the details in the previous chapter, in a number of critical areas, and in terms of overall balances, government had to make various trade-offs and take deliberate decisions on the course of action that it followed. These trade-offs related to such issues as the allocation of resources amongst competing demands on the fiscus and choices made between ensuring fiscal prudence and providing real increases in expenditure, especially for the social sector. They also concerned the balance in the allocation of resources between social and economic services during various phases of the period under review. Other choices involved actively promoting the modernisation and improvement of productivity of both the public and private sectors even though it was recognised that there would be negative implications for some of the unskilled components of the workforce. All these trade-offs and choices were made in full recognition of the risks involved, but it was the informed assessment of government that there were no viable alternatives. As is evident from the observations contained in this Review, at times government could have acted more quickly or more decisively or with better coordination or sequencing, but there is little or no evidence to suggest that it should have made alternative choices.
Reviewing the results of the different themes discussed in the previous section, it should be evident that in most instances the Government is making progress in achieving its stated objectives and most of these are the correct objectives. As will be elaborated later, the pursuit of these objectives proceeded from the premise that transformation is a protracted process, and success has, in the detail, given rise to new challenges.
From an assessment of the various themes, it can be seen that the Government's successes occur more often in areas where it has significant control and its lack of immediate success occurs more often in those areas where it may only have indirect influence. However, this distinction is not always consistent across the five themes.
In the governance and administration theme, the true dichotomy between power and influence is evident. Since 1994, considerable progress has been made to democratise and transform the State, ranging from the establishment of a Constitutional order, the creation of three spheres of government, the reconfiguration of departments and the revision of many practices and procedures. It can be argued that the architecture of the new democratic State is in place, yet in many areas of service delivery the performance of the Public Service requires much improvement.
The dichotomy between power and influence is most profound, because although the elements (the institutions, practices and procedures) over which the Government has control are in place, areas where government has less direct influence, such as with the behaviour of the civil service and interaction with civil soci-ety, are much slower to show improvement.
Changes to the demography and orientation of the civil service, and the imperative to service all South Africans in an equitable manner as distinct from the past, has meant that government as an entity has undergone a slow learning curve which has impacted on overall performance.
Related to these behavioural constraints within government are the changing relationships between government and civil society, and the ongoing contestation of roles and "competing" legitimacy claims between elected bodies and NGOs and CBOs. As will be discussed below, the impact of freedom and the provision of improved services have led to a social transition that has given rise to changes in the centres of social guidance and censure such as the family and the community, and that the fulcrum of identity, culture and mores has shifted in a transforming society and globalising world. These social changes are also impacted upon by poverty, particularly the indignity of unemployment and inability to fend for oneself and family. These issues will be discussed further below.
In the social theme, there has been a significant improvement and de-racialisation of social services.
Social the Government. However, the implementation of that policy is constrained by behaviour of officials and recipients, both of whom are variously not always amenable to effective state influence. In the delivery of pensions and other social grants, the impact of the Government has been dramatic, yet there are still significant numbers of recipients unregistered and/or poorly serviced. In education, massive improvements have been registered, reflecting also an understanding among communities of the opportunities that are opened up with learning. In health, the main indicators suggest that the impact of a significant increase in spending and a re-orientation of services are not yet fully being seen in outcomes.
There have also been notabl e a d vances in the provision of services such as electri c i t y, wa t e r and sanitation and housing. H oweve r, the level of mu n i c i p a l debt and illegal connections in some areas suggests that many c i t i zens have not yet understood their obligations with respect to p aying for such serv i c e s, besides those who genuinely cannot affo r d and those engaged in protests l i n ked to poor service delive ry. I n asset pove rt y, housing and land r e fo rm have made great impact, and it is expected that the C o m munal Land Bill will also a d vance this. Also quite striking is the impact this has had on wo m e n 's ri g h t s. H oweve r, microcredit for productive purposes and g e n e ral access to finance remain a major impediment.
In the economic theme, it is evident that the Government has made significant progress in the main areas primarily under the control of the State (such as fiscal and monetary policy, trade and industrial policy) but it has had less success in other areas (competition policy, restructuring and improving the performance of government and regulatory institutions and agrarian reform). Even where it has been successful in fiscal reform, these successes have not yet reached a few of the provinces and many municipalities.
T T Improvements Significant progress in areas primarily under the control of the State - fiscal, monetary, trade and industrial policy Success in fiscal reform have not yet reached all provinces and municipalities T Challenges Less success in areas such as competition policy, restructuring and improving the performance of govt, regulatory institutions, agrarian reform i n n ovation and R&D, restru c t u ri n g of SOEs and BEE). In those areas that depend significantly on p ri vate sector and civil society attitudes and behaviour and are only indirectly influenced by the State (investment and employment creation) it has had eve n less success.
There are, of course, externalities between these areas. For instance, over the past couple of years it is evident that the soundness of the macro-economic policy and industrial strategy is beginning to positively influence investor attitudes. Unfortunately, this change in attitude has yet to translate into significantly increased employment and consequent poverty reduction.
Though economic policy processes have been sound, one of the key limitations in the implementation of economic policy has been the cost of institution-building. Institutions such as some of the small business agencies, the National Empowerment Fund, the National Development Agency, the Umsobomvu Fund, some of the SETAs, and many local government level economic agencies have taken a great deal of time to become effective. Some key lessons are that the cost of institution building should not be underestimated, and that, where possible, new tasks should be incorporated into the work of existing successful agencies.
Economic might lead to medium-term gains, though these will have to be weighed against the costs of rationalisation.
In the JCPS theme, significant progress has been achieved in improving national security, establishing rule of law and transforming the large institutions that were previously the frontline in the defence of Apartheid. Due to the social transition, and the growth of new forms of organised crime in the post-Apartheid era, the gains in crime prevention and combating have not been as impressive.
In areas where the Government has greater control, such as the upholding of the rule of law (in the political, social and economic arenas), it has made it major gains. In some areas under its control, such as the ICJ system, progress has been slow. Despite significant efforts to ensure greater integration of the crime prevention and criminal justice system, the practices, attitudes and behaviour of particular components of the system have meant that the overall impact on crime requires improvement. Some new initiatives, which seek to bolster the social fabric and involve civil society more directly in addressing the causes of crime, show promise.
In the IRPS theme, by contra s t , most of the achievements reflect that gove rnment has made significant progress in raising the profile and influence of the nation in the i n t e rnational and regional env ironment, perhaps far beyond the capabilities and resources of the c o u n t ry. Pa rt of this success can be attri buted to ex t e rnalities flowing from other clusters, the consolidation of the Constitutional s u p r e m a c y, democracy and the rule of law, the success of tra d e s t rategies and the leadership role p l ayed by South Africans in certain international arenas. Pa rt of this success must also be due to the ex p e rience of South Afri c a 's leadership of extending the count ry 's influence and making the most of mu l t i l a t e ral institutions. H oweve r, it should be ack n ow ledged that there is a gr e a t e r emphasis of a unipolar wo rl d order which has adversely affe c ted developing countri e s ; and successes in this theme should weighed up against the difficulties the Gove rnment has had to fa c e in operating in this milieu.
I r o n i c a l l y, the areas that need more attention in this cluster gene rally invo l ve the further tra n s fo rmation, retraining and equipping of the institutions within the clust e r, all areas that should be in the control of gove rn m e n t.
The Rev i ew also sought to understand the impact of gove rn m e n t on the targeted groups - children, youth, women, people with disabilities and the aged.
In the discussion of diffe r e n t t h e m e s, there was evidence that g ove rnment was beginning to h ave an impact on the targeted gr o u p s. One of the most significant changes since 1994 is the increased participation of wo m e n in gove rn a n c e. South Africa has ensured that close to one third of political representatives in all spheres are women, ahead of the Millennium Development Ta r g e t s for Correcting Gender D i s c ri m i n a t i o n . The Public Service also demonstrates an improvement in the participation of women in management although the State has yet to achieve its targets for women and people with disabilities. In the economic t h e m e, it was evident that wo m e n were making progress in the professional and technical categori e s but were still lagging when it came to senior management.
In the social theme, evidence wa s presented to show the dra m a t i c i m p r ovements that had come to the aged and to children from social gra n t s, and with the latter, significant improvements in education and health. There is also evidence from research that whilst there were 13 disability grants per 1 000 in 1993, there are now 29 per 1 000. The racial bias that existed in 1993 no longer applies. Other evidence from the social theme indicates that health and education services are now strongly focused on women and c h i l d r e n . Indeed, South Africa has already surpassed the Millennium D evelopment Goals for Gender in E d u c a t i o n.
Housing, land redistribution and other services also show significant improvements in gender bias, although the majority still go to male-headed households. Progress has been made with regard to the employment of women in the Public Service. The most recent reports on the representivity targets indicate that the percentage of women in the public service now stands at 24%, whilst the number of employees with disabilities in the Public Service is 0.012%. However, more needs to be done to attract and retain people with disabilities in the Public Service. It is also evident that the focus on sexual crimes and the institution of special courts will ensure that women and children receive better treatment by the criminal justice system. Although the levels of such crimes has stabilised, they remain unacceptably high by international standards. In other words, there are promising trends in this regard, though the ideals of thorough-going equity are still to be attained.
To get a more precise understanding of the impact of gove rnment on the targeted gr o u p s, the results of Censuses 1996 and 2001 were analysed. Some prel i m i n a ry analysis fo l l ow s. All targeted groups would have benefited from the improvement in household services to the poor as d e s c ribed above. Women and youth pri m a rily should have been a f fected by education, income and e m p l oyment, whilst the aged would have been affected pri m a rily by income due to the ex t e n s i o n of social gra n t s. Children wo u l d p ri m a rily show improvements in education as well as the CGS fo r poor households.
Analysis for children was calculated for data falling between 0 and 19 years of age. The pri m a ry e f fect on children is the improvements in education. N a t i o n a l l y, the highest level of education of members of this group underwent a significant improvement betwe e n 1996 and 2001. The clearest indication of this is the sharp decline of 14.4% in the percentage of the group that had no schooling, as well as the double-digit increase of 11.9% in the section of the group that has some pri m a ry educ a t i o n.
The African population benefited most from this change with the proportion with no primary education falling from 28% in 1996 to 13% in 2001. The proportion of those with some primary education increased similarly from 42% in 1996 to 55% in 2001. The main areas where we would expect impact on the youth is education and employment. The analysis of the two Censuses shows that there have been remarkable improvements in education. Nationally, the highest educational level of youth increased significantly between 1996 and 2001, with especially the percentage of youth in the previously disadvantaged groups with a matric or a post-matric qualification as their highest qualification showing a strong improvement. In the case of African males, those with matric as highest qualification increased by 6.3% from 1996 to 2001 and those with a post-matric qualification by 8.3%.
While African females showed a ve ry similar increase in the case of matric (5.9%), the percentage increase in the segment with a p o s t - m a t ric qualification (2.8%) was far below the male percentage figure. In the case of coloured males, those with matri c as their highest qualification increased by 8.3% and the portion of coloured males with a p o s t - m a t ric qualification increased by 0.7%. C o l o u r e d females with a matric ex p e rienced a slightly higher increase at 10.0%, while females with a p o s t - m a t ric increased by 2.0%, again slightly higher than the coloured males. The percentage of those youth with no schooling u n d e r went a decline betwe e n 1996 and 2001.
As noted by the Statistics Council, the employment and income figures given in the Census should be read in light of the data provided in the va ri o u s Income and Expenditure Survey s (discussed further below) . B u t , g e n e ral trends seem to indicate that the positive effects of education have not yet made an impression on the labour marke t for yo u t h . The main impact of education for women is recorded a b ove (for children and yo u t h) . I n t e rms of employment, wo m e n h ave seen some slight gains although the changes have not yet changed the stru c t u ral gender legacies of Apart h e i d . The pri m a ry impact of gove rnment programmes for the aged will be in the area of income due to the provision of social gra n t s. In part i c u l a r, it can be seen that the proportion of women over 60 with no income has declined by almost 5% from 20% to 15%, and the proportion of women over 65 with no income has declined by almost 4% from 16% to 12% largely due to the increased provision of social gra n t s. It is also n o t i c e a ble that this improve m e n t is also more pronounced fo r A f rican wo m e n . H oweve r, whilst g ove rnment has made gr e a t p r o gress in extending social gra n t s, it is evident from these figures that there remains a significant proportion of people outside the social safety net.
As should be evident from the a b ove data analysis, the targeted groups have benefited pri m a ri l y from gove rnment progra m m e s that provide services (household s e rv i c e s, education and social grants) but that their position still remains precarious because of the high levels of unemploy m e n t.
In the above discussion on the nature of the State, government's performance was interpreted in terms of a framework that sought to highlight the parameters of direct state power. As far as was possible, the themes have sought to provide this assessment and link this to the relationship between outputs (policies and programmes) and outcomes.
How can these outcomes be assessed?
One approach to assessing the p e r fo rmance of gove rnment that has been used by the Human Rights Commission (HRC) and the Constitutional Court is based on a notion of ' p r o gr e s s i ve realisation'. The Constitutional Court in a nu mber of cases has sought to interpret the Gove rn m e n t 's Constitutional obligations to progr e s s i vely realise the socio-economic rights contained in sections 24, 26, 27 and 29 (1) of the Constitution (Act 108, 1996). I n their comment, the Court sought to recognise that whilst the G ove rnment has these obl i g a t i o n s, resource constraints do exist and that the Gove rnment cannot do more than the ava i l a ble resources p e rm i t . The Gove rnment is, howeve r, obliged to promote the progr e ss i ve realisation of these ri g h t s through the effe c t i ve and efficient use of ava i l a ble resources.
Assessing outputs and outcomes ernment. The HRC, in its 4th Economic and Social Rights Report, 2000/01, has used these interpretations to suggest that government may be falling short of its Constitutional obligations to progressively realise socio-economic rights. Unfortunately, the HRC has failed to indicate what an adequate rate of progress may have been, thus obviating much of its valuable assessment of delivery constraints. Much of the problem of defining progress does not lie with the HRC or Courts, but with government itself, and ultimately with the public.
Although the RDP and subsequent policy documents, Budget R ev i ew s, and State of the Nation Addresses have attempted to set out the nation's changing pri o rit i e s, these pronouncements need to be integrated and distilled into a comprehensive, coherent and co-ordinated fra m ewo rk . In the absence of such a fra m ewo rk, the R ev i ew has used composite impact indicators, and these largely present a positive picture though they also reflect we a knesses in a few areas.
In most cases, gove rnment has s h own itself capable of adapting to changing circumstances and its progress has been reflected a c c o r d i n g l y. H oweve r, in the process of conducting the R ev i ew, it became evident that South Africa is currently undergoing changes that were not anticipated in the RDP or subsequent g ove rnment policies. In the nex t s e c t i o n s, the Rev i ew will discuss a social transition that, it is b e l i eved, is more profound than a ny other in South Afri c a 's h i s t o ry.
Composite indicators are used in this section to assess progress in va rious categories of human d eve l o p m e n t . For reasons explained earl i e r, in most instances the base year used is 1 9 9 5 . As such, what is being measured is pri m a rily the p r o gress in meeting gove rn m e n t o b j e c t i ves within the democra t i c o r d e r, rather than what in effe c t would be a quantum leap betwe e n the Apartheid order and the current situation.
The first composite indicator used is the infra s t ructure index which seeks to assess the direct impact of the services that gove rn m e n t has delivered in the past nine ye a r s. This index aims to capture the changing environment in which households find thems e l ves in terms of their ability to access basic infra s t ru c t u ral services (housing, water and sanitation, electricity and telephones). G i ven the extent of service delive ry over the past nine ye a r s, this i n d ex improved approximately 24 percentage points from 0.
0.60 between 1995 and 2002. The actual value of the index is less important than the direction and magnitude of change although complete service delive ry would yield an index of 1. T h i s i m p r ovement is remark a ble give n the fact, as discussed furt h e r b e l ow, that the expected nu m b e r of unserviced households increased threefold due to the increase in number of households in this peri o d.
Because the infra s t ructure index focuses pri m a rily on hard serv i c e s, a quality of life index was created which also reflects the impact of social serv i c e s. Quality of life is a broader concept which needs to capture physical well-being and e nvironmental conditions.T h i s i n d ex includes access to health, adult functional literacy and env i r onmental quality. Again, the index s h ows a positive improve m e n t from 0.52 to 0.67, a 25 percentage point improve m e n t . A political participation index, which measures political and union part i c i p a t i o n and social trust in the institutions of the State, shows an improvement from 0.37 to 0.47 betwe e n 1995 and 2002. A social inclusion i n d ex, which measures household s t a b i l i t y, people's inclusion in socie t y, and participation in cultura l organisations shows an improvement from 0.27 to 0.36 betwe e n 1995 and 2002. These indexe s suggest that the legitimacy of the polity and the social fa b ric are i m p r oving, especially in fo rm a l i n s t i t u t i o n s.
All these indices show that the Government has made a positive impact on the lives of people over the past nine years. Not only have they greater levels of services, but their broader social and environmental conditions and democratic participation have also shown a significant change for the better. However, a related index, safety and security, which compares serious crime, prosecution and resolution rates between 1997 and 2002 shows a slight decline from 0.
0.49 (different years are used in this index relative to the others due to the availability of credible data). It is worth noting however, that the trend since 1999 (reflected in the 2000 statistics) is positive with an increase from 0.41 to 0.49, which suggests that the crime prevention initiatives described in the previous chapter are beginning to take effect.
The economic picture is also not so positive. Economic participation and preparedness show negative trends.
0.63 to 0.60. The economic preparedness index, which relates economic participation to education levels (including maths and science education) shows a small decline from 0.52 to 0.49. These two indexes suggest that the labour force is less successful in gaining employment at present, and is not yet equipped to find jobs in the future. As discussed below, given the dramatic increase in the economically active, it is to be expected that these indexes would not show an improvement. A more precise measure of the impact of government spending is the fiscal incidence analysis of social expenditure. Research has shown that spending incidence in South Africa is indeed redistributive to poorer groups and has become considerably more redistributive since the political transition. Three Lorenz curves put this into better perspective.
The Lorenz curve for pre-transfer income (in order to exclude the impact of social transfers received from the Government) has an associated Gini coefficient of 0.68.
The Lorenz curve for pre-transfer income after incorporating the effect of taxes (personal income tax, value added tax and customs and excise duties) reflects a not much lower Gini coefficient of 0.6.
The Lorenz curve for pre-transfer income minus taxes (as above) plus the value of benefits received from social spending, reflects a much decreased Gini coefficient of 0.44.
A comparison with 1993 data shows that social spending in 1993 had virtually no impact on the Gini, suggesting that this change is due to post-1994 redistributive policies. Comparisons between social spending between 1993 and 1997 suggests that there was already a significant shift in social spending to the poor. Social spending increased to R2 514, R1 947 and R1 786 respectively for quintiles one to three whilst it was reduced to R1 661 and R1 253 for quintiles four and five. Social spending increased by R573 for Africans and declined absolutely for other races. Likewise, since 1993, the increase in social spending in rural areas is three times the increase of the metropoles and double the increase of other urban areas.
This research is based on the 1997 Household Survey and has not been replicated for later years because of data problems with subsequent surveys. The PCAS has extrapolated these research findings using the 2000 Income and Expenditure Survey (IES) to make a number of simplifying assumptions. Firstly, it was assumed that household income shares per decile as reported in the 2000 IES was a fair reflection of the pre-transfer income giving a Gini of 0.57 (see table below). If the same incidence of the 1997 study is used, the 2000 household income shares are adjusted by the same percentage difference to give the pre-transfer income shares (row 2). This would then give a Gini of 0.59. Post-transfer Gini for 2002 would then be 0.35. The overall impact of social spending in 2000 is that it reduces inequality by 41%.
The importance of these findings is that gove rnment interve n t i o n s such as the provision of social s e rvices have significantly i m p r oved the quality of life of the p o p u l a t i o n . These interve n t i o n s h ave ameliorated stru c t u ra l changes of the social tra n s i t i o n which have had a negative i m p a c t.
In the preceding discussion, the impact of government policies and programmes was measured using objective indices. A complementary approach is to assess the subjective views of the public. It is therefore instructive to examine some of this public opinion in light of the discussion that preceded above.
(which measured public concerns between 1994 and 2002) and Markinor (which measures people's approval of government activ ities between 1996 and 2003) surveys show consistency with objective data. The opinion survey on social serv ices shows high levels of approva l for most and generally reflect an ove rall improvement for the 1999-2003 peri o d . P u blic approva l for we l fare grants is highest at 78%, basic service delive ry rates a 75% approval, access to land ra t e s at 63% and HIV/AIDS policies rates at 61% in 2003. For other social serv i c e s, surveys show that p e o p l e 's approval for education and health policies have been fa i rl y consistent around the 65% mark for a number of ye a r s, although there were declines in 1996, 1998/99 and 2001 in these sect o r s. Health policies have recently seen a slight drop in approval to 61% in 2003. I n t e r e s t i n g l y, publ i c a p p r oval for housing intervention of the State has improved from a low of 30% in 1996 to a high of about 64% in 2003.
These trends are also reflected in the decline of public concern since 1994 about certain Public Services. Education was a concern of 34% in 1994, but it was a concern to only 15% in 2002. Health was a concern of only 2% in 1994, and increased to 10% in 2002. This may reflect the success of recent policies. Similarly, housing has dropped as a concern from 46% to 22% over the 1994-2002 period.
Job creation Concern about...
Approval of social delivery 2003 seems to be in decline (35% in 2 0 0 2) . Other survey data seems to confirm this interp r e t a t i o n , s h owing that although people's a p p r oval of the Gove rn m e n t 's e f fo rts at crime preve n t i o n declined to a low in 1999 (about 25%) there had been a significant increase in approval by May 2003 (to 41%). By contrast, violence that was a major concern in 1994 (49%) declined to insignificance by 2002. C o r r e s p o n d i n g l y, peop l e 's approval of gove rn m e n t 's e f fo rts to control political violence rates at 67% in 2003.
These citizen perceptions, although subjective in origin and reflective of people's moods and opinion, confirm the analysis of quantitative and qualitative assessments of impact discussed above.
On the other hand, job creation that was considered the most i m p o rtant problem by 67% of the respondents in 1994 and was still considered the most important by 84% in 2002. L i kew i s e, concern s about pove rty increased from 9% in 1994 to 28% in 2002. There is an obvious connection betwe e n this and job creation. As can be seen from the quantitative data, this issue has become even more salient over time. It can be seen that concern about c rime and security started ve ry l ow (at 6% in 1994), increased d ramatically (to 65% in 1999), bu t the impact discussed above. It also suggests the idea that government approval is higher where it is has greater control (delivery of social goods and services) and less approval in those aspects where it requires a relationship of influence with civil society (as in crime, which is dependent on social behaviour). This interpretation is supported by the public opinion on economic factors that reside largely outside of government's direct control.
Approval of government policies for managing the economy has been increasing from around 45% since 1999 to 53% in 2003 but public approval for job creation policies has declined from a high of 35% in 1996 to around 26% in 2003. Since job creation in particular is largely a responsibility of the private sector, it is not surprising that government's efforts in this regard are seen in such dismal light. Interestingly, concerns about the general economy have declined from 21% in 1994 to about 7% in 2002, reflecting the success of the policies for achieving macro-economic stability.
These perceptions would suppor t the contention that government has been making a positive impact on the lives of the South African population, particularly in areas where it has a greater degree of control. Unfortunately, not all areas have seen a positive change. As noted above, job creation, which is largely beyond the control of the State, has increased and it remains the most pressing concern of the public.
Interesting new public opinion survey material on people's assessment of government performance over the past nine years since 1994, reflects public perceptions that the top two areas where government has been successful have been in creating unity amongst South Africans and in providing access to basic services. Government is perceived as having been less successful in improving the state of the economy in relation to raising the standard of living. In particular, the same respondents indicated that the overwhelming majority felt that unemployment was the major challenge for the next decade, followed by addressing health and crime problems. Significantly, poverty and the provision of services were ranked as lesser challenges in the next decade.
What are the broader social trends that South Africa has been subjected to over the past decade?
The first and most obvious social trend concerns the changes in South Africa's demography. During the period 1996 to 2001 the population of the country grew by approximately 2% per annum. This corresponds to an increase in the number of people from 40.4 million to 44.8 million, an increase of 4.4 million or 11%.
H oweve r, recent data suggests that there are 11.8 million househ o l d s, up from 9.1 million in 1996. The 2001 Census data reflects a drop from an ave rage household s i ze of 4.5 in 1996 to an ave ra g e s i ze of 3.8 in 2001. That is, a 30% increase in the number of househ o l d s, almost three times the ra t e of the population increase. Ta k i n g the drop in household size as g i ven, the impact on service delive ry is clear. Instead of having to p r ovide housing and services fo r only one million households, gove rnment has found itself having to assist almost three million househ o l d s. The implications on serv i c e d e l i ve ry are even more critical in some provinces such as Gauteng, with an ave rage of 3.1 persons per household, and less critical for others such as Eastern Cape, K waZulu-Natal and Limpopo, with an ave rage of about 4.2, above the national ave rage of 3.8. The reasons for the drop in household size are va ried and include a decline in fe rtility rates and family size, the a f fect of new gove rnment policy on h ow citizens try to access serv i c e s, e n c o u raging "unbundling", as we l l as freedom and improvement in quality of life, resulting in fewe r extended fa m i l i e s.
The second major social trend that has been affecting these i n d exes is the dramatic increase in the economically active popul a t i o n . As noted in the economic t h e m e, between 1995 and 2002, the number of people employed in South Africa gr ew by 1 600 633 net new jobs. H oweve r, during the same period, the number of unemp l oyed people gr ew by 2 361 834 according to the strict definition of u n e m p l oy m e n t . This was because the number of economically active people increased from 11 466 653 to 15 429 120, or by 3 962 467 p e o p l e. There is some discrepancy b e t ween the Census data and the Labour Force Survey (LFS) measu r e, but Statistics SA suggests that the LFS measure be used.
The economically active labour force gr ew by about 4% per ye a r although the population gr owth ra t e was around 2%. This suggests that n ew job seekers were not only young adults reaching the job market, but were also older adults who had not previously considered t h e m s e l ves part of the labour marke t . Evidence from the qualitative case-studies indicates that many of these are African women, and, of t h e s e, many are recent migra n t s from the ru ral areas.
Despite other causes of employment loss, such as industri a l r e s t ru c t u ring due to the reintegration of the South African economy into the wo rld economy, 12% more jobs were created between 1995 and 2002. H oweve r, the economically active population has increased at 35%, almost three times the rate of jobs created.
The third major trend is the changing structure of the economy. An analysis of sectoral employment patterns showed that in absolute employment all main sectors of the economy witnessed increased employment between 1995 and 2002. However, there were noticeable shifts in the sectoral allocation of employment. While most sectors showed unchanging shares of employment between 1995 and 2002, there was a clear shift of employment away from Public Services, construction, and mining and quarrying towards internal trade and finance, real estate and businesses service sectors.
In terms of Public Services and mining and quarrying, the restructuring exercise within the public sector as well as the continued pressure on the viability of mining enterprises, contributed to this declining contribution to aggregate employment. What the data also showed was that the economy's long-run prospects for expansion were in the services sector. This was particularly clear in that employment doubled over the seven-year period in the finance, real estate and business sector. This differential growth in the different sectors of the economy con tributed to the uneven growth of employment.
One of the major consequences of the change in the structure of the economy is that "two economies" persist in one country. The first is an advanced, sophisticated economy, based on skilled labour, which is becoming more globally competitive. The second is a mainly informal, marginalised, unskilled economy, populated by the unemployed and those unemployable in the formal sector. Despite the impressive gains made in the first economy, the benefits of growth have yet to reach the second economy, and with the enormity of the challenges arising from the social transition, the second economy risks falling further behind if there is no decisive government intervention.
The fo u rth major trend is m i g r a t i o n . Census data show s that in the major metropolitan a r e a s, and in some of the regional centres and small tow n s, more than 20% of the population are new m i gra n t s. This has impacted on the major urban centres of Gauteng and the We s t e rn Cape, and i nversely ru ral provinces such as the Nort h e rn Cape, the Eastern Cape and Limpopo. Along with these changes is the emergence of mainly info rmal settlements around major cities and tow n s. This has implications not only for fiscal allocations but also on the approach to spatial deve l o p m e n t : including identification of areas of potential, conc e n t rations of absolute pove rt y, i n t e rventions required in "migra t i o n feeder" communities and so on.
Furthermore, not only does this mean that at least a fifth of the population of these centres are relative newcomers with few social connections to the established population, but that there must also be a net loss in the mainly rural areas from whence the migrants have come. Given the recent receipt of the Census data, it is difficult to provide a more indepth analysis at this stage.
Both the urban influx and rural loss of migrants would have had a major impact on social relations in these areas as shown in the qualitative studies. These studies show that whilst some services are fairing better than others, particularly social grants, education and housing, the social transition under way is affecting communities differently.
Trend IV: Migration in population from these areas.
In both areas, social relations and connections to authority stru c t u r e s are under pressure and as a result, the ability of people to interact on a c o l l e c t i ve basis has been we a ke n e d . In ru ral areas, social capabilities are undermined by the loss of a ble-bodied and relatively skilled p e o p l e, and existing social netwo rks are put under pressure by p ove rty and a lack of income.
In urban areas, although in-migration may add to development potential, through the importation of economically active people, this migration risks overwhelming service delivery and employment opportunities. The new migrants do not have the same social connections and are increasingly resorting to informal networks to ensure their survival. Some ruraltraditional forms of collective organisation and exercise of authority are gaining ground, and a number of them seek to co-opt the democratic process to perpetuate these organisations. These challenges are likely to become more daunting in future depending on the tra j e c t o ry of the HIV/AIDS pandemic and other d e m o graphic changes such as declining fe rt i l i t y. The composition of the population is expected to change with the percentage of young people (0 to 19 cohort s) declining whilst the percentage of 60 and older age cohorts increases. The social, economic and political consequences of this social tra n s ition need to be fully understood and built into long-term planning.
These major social and economic changes help explain some of the negative trends reflected in the theme discussions. Because of the dramatic social transition, unemployment, and consequently poverty, have not declined significantly despite substantial government intervention. In the face of these social transformations, social cohesion and community life are adversely affected, undermining the development potential of some areas and giving rise to increased criminality in others. These problems are then reflected in lower levels of service deliver y and increasing problems in governance. In light of the magnitude of social changes brought about by the fundamental re-ordering of South African society, it should not be surprising that there has been this volatility in the social structure. Evidence from this research indicates that notwithstanding the significance of these social and economic changes, government has made significant progress towards addressing their negative effects.
We enter the Second Decade of Freedom in an uncertain global environment. This environment is characterised by a growing tendency towards global tension and unilateralism, in a world that was inching in the opposite direction. Uncertainty around issues of global terrorism and the tensions in the Middle East and the Korean Peninsula are the most immediate manifestations of the global political environment, which threaten to persist. The international outlook remains fragile, reinforced by lingering concerns around geopolitical tensions, unresolved international trade issues and the overhang of the immense US balance of payments and fiscal deficits. The global environment thus holds little immediate prospect of relief for the South African economy.
This global setting is a consequence of a unipolar wo rld, and the fact that the expected "post-Cold War dividend" has not materi a l i s e d for the majority of humanity. T h e p e riod under rev i ew saw the consolidation of globalisation, reflected in the integration of financial marke t s, a revolution in info rmation and c o m munications technology, integration of production in deve l o p e d regions of the wo rld, and massive gr owth in global trade and migrat i o n . Along with these deve l o pments has been the tendency to impose approaches that favo u r i n d u s t rialised nations in terms of, among others, macro-economic policies and trade issues.
However, at the beginning of the new millennium, some shifts in the discourse on development issues amongst the major multilateral institutions and greater popular interaction with global issues have created new opportunities for developing countries to asser t their interests. Yet, even these positive trends have recently been undermined by the emergence of global tension and a tendency towards unilateralism.
Whilst many of these developments contain seeds of Africa's continued marginalisation, opportunities do exist for the continent to mobilise within itself and across the globe for a more humane approach to its plight and that of other poor regions of the world. Among governments and citizens of developed countries, there is potential to focus attention on common objectives of humanity as outlined in the UN Millennium Declaration. South Africa, by dint of its history, its location, size of its economy on the continent, current endeavours and outlook is poised to play a critical role in this regard.
All the evidence from research suggests that government has adequately met its objectives. Given all the issues raised in the preceding sections, what is the major conclusion that can be made This can be summarised as follows?
South Africa is at the confluence of major possibilities arising out of progress that has been made in the First Decade of Freedom. The fruits of good macro-economic management are being reaped in social services; programmes for micro-economic interventions have been developed, and experience has been gained in implementing government programmes, includ ing crime prevention and improv ing the global positioning of the country.
The analysis in the themes and in the section on findings do throw up some challenging social and economic trends. In order to fully understand the challenges for the next decade, these positive trends and the challenges need to be taken into account in trying to define the trajectory for the Second Decade of Freedom. What are the "Big Ideas" in this regard?
In positing these ideas, we proceed from the premise that the fundamental objective of the country, and of state policy, is to create a united, non-racial, non-sexist and democratic society. This finds expression in the country's Constitutional framework and should increasingly find realisation in the outcome of government policies and theory and practice within all sectors of society.
Given the observations outlined above, it would seem that the major intervention required in the coming period should be directed at consolidating democracy with measures aimed at integrating all of society into a growing economy from which they can benefit. This requires a framework defining a shared destiny, better performance by the State, addressing the consequences of the social transition and improving the environment in the subcontinent.
As it was argued, for development to be successful, the State needs to be sufficiently strong to commit to encompassing long-term development objectives, in other words, for the State to assert its leadership role beyond the realm of areas under its direct control.
In the course of the Ten Year Review, it was evident that apart from the RDP, there was no such encompassing framework or broad vision. The RDP objectives remain relevant, and in terms of targets they need to be integrated with the UN Millennium Declaration which includes goals and targets to decrease poverty and hunger by half, ensure universal primary education, reduce child and maternal mortality, combat HIV/AIDS and other major diseases, ensure envi ronmental sustainability and develop a global partnership for development. The Growth and Development Summit (GDS) also committed economic role-players to undertake to reduce unemployment by half by 2014.
Should these targets be the ove r arching vision which can be distilled into a simple injunction to mobilise society; or is a diffe r e n t vision required There is ev i d e n c e from the Rev i ew process that unless such an unambiguous f ra m ewo rk is articulated, it will be difficult to achieve co-ordinated action both in gove rnment, and b e t ween gove rnment and its social p a rt n e r s. Such a fra m ewo rk wo u l d c o n t ri bute significantly to improv i n g the perfo rmance of both the fo rm a l and info rmal institutions of the S t a t e. I n t e rnal to gove rnment, such an encompassing fra m ewo rk wo u l d p r ovide the basis through which policy co-ordination and perfo rmance management could be establ i s h e d . Without a clearly art i c u l a t e d h i e ra r c hy of outcomes, it is unlike l y that gove rnment will achieve the ex t e rnalities of integrated and coordinated action across society?
The value of an encompassing framework is not limited to the formal institutions of government, but it can provide a vision and coherence to the activities of civil society. The Ten Year Review shows that the informal networks of civil society play a significant role in promoting enterprise and ensuring survival of rich and poor communities alike. Unless these activities are harnessed to the development project of the nation, they could increasingly become sites of contestation between government and civil society. The real gains that all groups in this country have experienced now provide the grounds for uniting divergent interests around some common developmental objectives.
Research commissioned for the Review suggests that civil society in South Africa is vigorous but shallow, yet the recent experience of using faith-based organisations to dramatically increase the number of recipients of CSGs, indicates there remains significant potential for enlisting the support of civil society into the nation's development project. Involving social partners and the broader civil society must go further than the mere articulation of visions and frameworks, but must, in line with agreements made at the GDS, extend to the identification of projects that involve different sectors of society in the overall development project of the nation. The central economic challenge for the next decade, to help address the negative impact of the social transition - with far-reaching social and political implications - is to ensure much higher rates of growth and employment creation. Research shows that with an average growth rate of 2.8%, net employment grows at a rate of 2.1%. This is a good coefficient in a restructuring economy. The issue is how to raise growth to higher levels, and more specifically, the rate of investment from the current 16 - 17% of GDP!
C o n t i nuing to improve the macroeconomic environment, through a more stable currency and lowe r real interest ra t e s, publ i c - p ri va t e p a rtnerships in major projects, marketing and reversing negative i nvestor perceptions, demonstra bl e success in dealing with pove rt y, reducing bu r e a u c ratic obl i g a t i o n s on employe r s, easing access to and cost of capital specially fo r small and medium firms and targeted skills development and acquisition - in bri e f, implementation of the GDS and other agr e e m e n t s among the social partners wo u l d be critical in placing the country on a higher gr owth tra j e c t o ry. The fra m ewo rk of encompassing interests should include all these i s s u e s. It is also critical in reinfo r cing the current high levels of pri d e among South Afri c a n s, in ensuring a sense of belonging and hope in the future, in improv i n g i nvestor confidence, in encoura ging v u k ' u ze n ze l e (reflected in part in the spirit of self-help, selfrespect and initiative) and in uniting the country around the campaign against HIV and AIDS. Combined with all these is the promotion of social values that accord with the spirit of cari n g and responsibility - in the contex t of education, culture and the art s and media discourse.
S e rious consideration should be g i ven to the nature of a social compact that can provide an encompassing fra m ewo rk for further deve l o p m e n t . It may also be n e c e s s a ry that beyond the need to improve the fo rmal institutions of the State, much greater attention should be given to mending and reinforcing the social fa b ri c . The first Big Idea for the nex t decade therefore is to art i c u l a t e an encompassing fra m ewo rk which not only helps better int e grate the activities of gove rnment, but also harnesses the e f fo rts of support of civil society to realise the national deve l o p m e n t o b j e c t i ve s.
The second major challenge for the next decade, arising from the conclusions of the Review, is that if the objectives of government are largely correct, then more needs to be done to achieve them. In the themes, a number of cluster specific recommendations were made on how to improve certain functions of the State. Beyond these immediate suggestions, however, the functioning of the State in its broadest institutional definition needs to be addressed.
Over the past nine years, a major new architecture of institutions has been created for the State, spanning the three spheres of government. Furthermore, many of the procedures and practices of government have been revised in line with international best practice. Significant personnel mobility has brought in new skills and motivated people, but it has also led to the loss of experience and institutional memory, especially with regard to civil servants recruited after 1994. The combined impact of these changes has meant that the formal institutions of state are still undergoing significant growing pains and face the danger of being in a permanent and debilitating state of flux.
The Rev i ew suggests that the capacity and perfo rmance of all spheres of the State need to be more critically assessed in the second decade and that national or provincial gove rnment may need to be ready to interve n e much more quickly where there is evidence of poor perfo rm a n c e. I n line with current interventions in the Eastern Cape, the national g ove rnment may have to show its strong commitment to improv i n g p e r fo rmance where institutions persistently demonstrate we a knesses of gove rn a n c e. T h i s should happen as an evo l u t i o n a ry process of creating a unifo rm P u blic Service across all three spheres unfo l d s.
The State has made significant p r o gress in recent years in i m p r oving policy co-ordination both within and across spheres of g ove rnment, but these effo rt s need to be further consolidated with greater attention being focused on implementation. N ow that the basic policy fra m ewo rk s of the democratic dispensation h ave been created, more attention can be given in all spheres to overseeing or managing the deliv-e ry process.
Research commissioned for the R ev i ew suggests that the needs of local gove rnment are most cri t ical, with the majority of mu n i c i p a lities not having the capacity, or l i kely to gain the capacity, to perfo rm their delive ry functions in f u t u r e. This means that although g ove rnment should make eve ry e f fo rt to wo rk within the current f ra m ewo rk of institutions and p ra c t i c e s, if serious capacity cons t raints persist in any agency, the G ove rnment may need to consider changing current responsibilities and stru c t u r e s, such as with the proposed National Social S e c u rity Agency.
Put diffe r e n t l y : The Constitution delegates original and concurrent p owers and functions to diffe r e n t spheres of gove rn m e n t. T h u s, in addition to certain functions u n d e rt a ken directly, national gove rnment has responsibility for the f ra m ewo rk of national policy fo r social tra n s fo rm a t i o n . Two challenges arise from this: F i r s t l y, how to ensure realisation of the fra m ewo rk of encompassing interest - a national vision - in actual pra c t i c e, given the relative a u t o n o my of each sphere of gove rnment in critical areas of social d e l i ve ry. And secondly, whether it would not be prudent to consider a s y m m e t ric allocation of responsibility where capacity exists to u n d e rt a ke functions beyond the p r ovisions of the Constitution, and i nve r s e l y, to effect necessary i n t e rventions where such capacity does not exist, even if matters h ave not reached the stage r e q u i ring invocation of Section 100 of the Constitution. This also relates to the issue of norms and standards at the level of pra c t i c a l implementation rather than just in relation to policy fra m ewo rk s.
G ove rnment would also need to promote greater participation and i n t e raction of people with the S t a t e. Since 1994, the State has p r ovided many new opport u n i t i e s for ordinary people to get invo l ve d in gove rnance ranging from wa r d c o m m i t t e e s, the IDP process, the Chapter 9 institutions, the National Economic Deve l o p m e n t and Labour Council (NEDLAC) , and management of pension funds and wo rkplace fo ru m s. Ye t , actual participation in these stru ctures and/or the capacity to take a d vantage of their existence has been limited mainly to special interest gr o u p s, and/or hindered by considerations of short - t e rm s e l f - i n t e r e s t . G ove rnment should c o n t i nue to seek new ways of e n c o u raging ordinary people to utilise their freedoms.
Related to this are the initiative s p e rtaining to project management, C o m munity Deve l o p m e n t Wo rke r s, massive expansion of the one-stop gove rnment centre (MPCC) project and Gateway.
The third major challenge for the n ext decade is to address the consequences of the social tra n s ition described above. There is ev idence of a significant tra n s fo rm ation in South African society and the economy, reflected in migration and demogra p hy, structure of the economy and character of the labour fo r c e, ave rage size of households and so on.
The National Spatial D evelopment Pe r s p e c t i ve (NSDP), which anticipated mu c h of the social transition, provides a f ra m ewo rk for gove rnment to focus its effo rts on localities that will have the greatest impact in t e rms of development and pove rty allev i a t i o n . By focusing on areas that have both economic potential (including untapped a gri c u l t u ral and other natura l resources) and high numbers of poor people, and in most cases these are the same areas, all three spheres of gove rnment will a c h i eve greater ex t e rnalities from co-ordinated action. These areas are to be found in both urban and ru ral settings, and their potential includes research and deve l o pment, high-value or labour-intens i ve mining, manu fa c t u ring or a gri c u l t u r e, tourism, commerce or p u blic ser v i c e s.
In these areas, programmes that s t i mulate economic activity have the most potential to succeed although, given the high nu m b e r s of new migrants part i c u l a rly in urban areas, gove rnment will also h ave to dramatically increase its p r ovision of basic serv i c e s, skills d evelopment and social grants to ease the tra n s i t i o n . F u rt h e r, within these areas, there will also be need to place greater emphasis on overcoming the spatial disjuncture b e t ween home and wo rk by promoting more compact designs that increase residential densities and reduce long-distance commu t i n g.
S i mu l t a n e o u s l y, the NSDP fo c u ses gove rn m e n t 's attention on those areas whose human capital and social fa b ric have become s everely depleted by pove rty and o u t - m i gra t i o n . In these areas, the NSDP advocates progra m m e s that will enhance human resource d evelopment, access to labour m a rkets and the provision of basic s e rvices and social grants to amel i o rate the worst effects of the t ra n s i t i o n . The NSDP will therefo r e assist gove rnment in dealing with the social transition by focusing its activities where it will achieve most impact. C ritical in both a r e a s, in addition to on-going economic progra m m e s, is a massive P u blic Wo rks Progra m m e. T h e challenge is to ensure that the social (and other costs) of the t ransition are ameliora t e d.
G i ven the time lags associated with improving service delive ry, g ove rnance and economic perfo rm a n c e, a high level of social d i s c o m fo rt will persist. The commitments of the GDS may be sufficient to ensure that the social and economic short falls are a d d r e s s e d . H oweve r, these commitments are unlikely to yield significant improvements without the w h o l e h e a rted support of all sectors of South African society. Related to the challenge of bu i l ding human capital and renew i n g the social fa b ric is the question of national identity and pri d e. One of the challenges of the decade will be to take nation-building furt h e r through such issues as values in education, the arts and by inculcating among all South Africans a sense of belonging. Although gove rnment has already been credited for doing much to foster a sense of unity since 1994, the u n d e rlying pressures arising from the social transition mean that much more still has to be done in the next decade.
One of South Afri c a 's chara c t e ri st i c s, not unusual in the kind of fundamental change our society is undergoing, is the fact that the political leadership in gove rn m e n t is quite distinct in terms of ra c e, c u l t u r e, back ground and life s t y l e from the economic leadership. This has had some benefit in that the political leadership is not beholden to an established "Old B oys Club". The disadvantage is that the kind of trust needed b e t ween the economic and political "elites" for high levels of i nvestment was initially missing in post-1994 South Afri c a . H oweve r, trust has gr own in recent ye a r s, facilitated by institutional innovations such as N E D L AC, the Presidential Wo rking Groups and the Business Tru s t . In addition, the BEE policy and programmes have helped develop a bl a ck bu s i n e s s class that is able to assist in building such mutual trust and c o n f i d e n c e. G ove rnment will need to build on these bridges if inve s tment and gr owth are to increase for sustainable deve l o p m e n t . I n other wo r d s, the relationship that exists with civil society among the poor needs to be augmented with broader alliances that wo u l d m a ke a social compact possible - without detracting from the fundamental objectives of policy.
Needless to say, South Africa's development is dependent on increased security and stability, democracy and economic growth and development in southern Africa and the rest of the continent. Progress in this regard will allow for rational exploitation of countries' comparative advantages, integrated utilisation of human and natural resources, bigger markets and investment opportunities across the continent and the virtuous cycle of improving perceptions.
The next decade holds the possibility for NEPAD to find practical realisation in critical projects that help lift various regions.
Zimbabwe, the DRC and Burundi. In a sense, these achievements would set the region on a high growth path, and ensure that a collective of states serve as the locomotive of the revival of the region and beyond.
Along with this, and largely dependent on it, is the challenge to put the institutions of the AU on an operational footing.
In pursuing these objective s, South A f rica will be challenged to find the a p p r o p riate balance between leadership and collective effo rt, the l o c o m o t i ve effect and the lowe s t common denominator, assert i n g with pride the fact of South Afri c a being an integral part of the continent and avoiding being defined by A f ri c a 's worst probl e m s.
Attached to this challenge are the efforts to promote multilateralism, the development of strategic relations with major countries and regions of the South, as well as ongoing efforts to strengthen relations with developed countries.
Beyond the broad challenges of the next decade described above, it is argued in the themes that government must continue with what it has started, only to do this more diligently and more vigorously than before. This synthesis closes therefore by highlighting the key challenges that arise from each of the themes.
The overriding challenge in this regard, if the country has to move to a higher trajectory of development, is employment creation and reduction in the number of citizens dependent on social welfare. At the same time, the reach and efficiency of social security need to be continually improved.
With regard to each area of endeavour, a Key Challenge is identified, so highlighted because, if urgently implemented, it would help unlock faster movement in all other areas - it would be a catalyst towards ascending to a higher trajectory of development.
Focus on practical implementation as distinct from setting out a policy framework which now exists, through the adoption of project management practices and Community Development Workers.
Improve service delivery by building the necessary institutions and initiatives.
Make use of the NSDP to focus government's attention on localities that have greatest potential for development and poverty alleviation whilst rebuilding other areas.
Improve the capacity of provincial and local government at key technical levels especially where it impinges on service delivery and financial management.
Improve accountability to, and contact with, the electorate by all levels of government.
Develop and maintain par tnerships with civil society with emphasis on practical programmes.
South Africa's development in the next decade and beyond.
6 . 2 . 1 Key challenge: M a s s i ve Public Wo rks Progra m m e, i m p r oved access to social securi t y m e a s u r e s, with better vehicles to i m p r ove service delive ry while reducing the number of citize n s dependent on gra n t s.
More efficient delivery of social grants to rural beneficiaries, the reduction of corruption and incorporation of these grants into a system of comprehensive social security.
Expanding the Public Works Programme to include both labour intensive construction and social services to address the causes and consequences of poverty.
Addressing HIV/AIDS and other emerging diseases by reducing the incidence of infection among high-risk groups, treatment of those infected and increasing access to home-based care.
4 . Matching the skills to the requirements of the economy, restru c t u ring higher education, improving the uptake and graduation from ABET p r o gra m m e s, and reducing d i s p a rities in access to education by the poor.
Meeting the increasing demand for housing and services generated by the decrease in household size between 1996 and 2001. Other challenges include obtaining land for urban housing projects in the context of spatial planning.
The development of support programmes to farmers to ensure the appropriate use of land and appropriate land-use data collection systems for planning and monitoring purposes.
Promote national identity and pride, ensuring that households develop civic responsibility, including a culture of paying for services (beyond the free basic provision) and taking responsibility for protecting the infrastructure in their communities.
Key challenge: Implement key GDS recommendation to identify sectors for urgent investment and learnerships and employing at least 5% of investible capital from relevant funds in productive activity.
Continue with prudent macro-economic policies leading to a more stable currency and lower real interest rates, and improve the public sector's investment performance.
Support focused sector strategies in key growth and employment industries, following the examples of the motor industry and the tourism sector.
Speed up the restructuring of all industries to ensure global competitiveness, low commodity prices and better access to key markets.
Increase the effectiveness of SOE restructuring though more effective managed liberalisation and stronger regulators, and strengthen the powers of the competition authorities to deal with anticompetitive practices.
Provide adequate resources to strengthen the broadbased empowerment programme, including the agrarian reform programme and micro-credit to suppor t productive enterprises.
Focus on targeted skills development and steady improvement in the education system and the functioning of the labour market.
Build on the platform of the GDS to create a sustainable growing, job-creating economy.
Ensure implementation of the Research and Development Strategy both in high-level niche areas such as fuel cell technology and issues related to immediate poverty eradication and protection of the environment.
Key challenge: Improve SAPS skills and numbers and build an efficient and integrated CJS along the whole chain, reinforcing the rule of law.
Accelerate the implementation of social programmes that will help prevent crime from taking place, including Integrated Rural Development, Urban Renewal and Moral Regeneration combined with a better physical living environment.
Enhance the capacity of the intelligence structures and the SANDF.
Improve efficiency in both ports of entry and in respect of border control.
Improve intelligence, visible policing and social partnerships, particularly in dealing with priority crimes.
Address all matters pertaining to HRD across the cluster, including the judiciary.
Key challenge: Unite the world around NEPAD's "common human values" and get locomotive countries and projects going.
Consolidate active participation status and role in the 9. international political and economic systems. 10.
Speed up transformation of all the institutions and agencies in the cluster.
Support the Peace and Security Council in its efforts to contribute to conflict prevention, conflict resolution and peacekeeping in Africa.
Promote and strengthen multilateralism at regional, continental and global levels.
Play an active and leading role in the implementation of NEPAD and the African Peer Review Mechanism.
Ensure that AU structures and programmes are implemented, operationalised and consolidated.
Pursue economic diplomacy in order to expand the country's economic links to Africa and internationally, and attract FDI.
As the custodian of the Johannesburg Outcomes, continue to play an impor tant role in leading the international sustainable development agenda. Marketing South Afri c a and Africa. Accelerate energy security by diversifying energy supply options to integrate and develop gas and renewable energy resources.
The composite indexes were created by identifying aspects of the general quality of life affecting all South Africans and measuring changes in them. To do this with any validity, the constituent parts have to be of roughly similar significance to the population. Including a measure that affects a small percentage of the population among measures that reflected more general trends would skew the index.
Composite indicators can be designed to capture particular dimensions of social change when appropriate direct measures of social change are not available. Two of the main virtues of composite measures are that they are able to reflect diverging or contradictory trends, and they are typically "robust". This robustness is an advantage when it is necessary to keep measures as simple and as transparent as possible. Such composite indices are not sensitive to small changes in trends or in definitions.
There is another advantage of composites - trends can be captured by proxy measures. The insight offered by composite indicators rests largely on the selection of the components. Very often the components are proxy measures for other data that is unavailable. For example, if a composite measure of housing conditions is required, little is gained by measuring 1) access to electricity, 2) access to piped water and 3) housing type (i.e. formal or informal). The close correlation between formal housing and access to both piped water and in-house electricity is such that housing type contributes nothing additional to the other variables. This unfortunately may give rise to the appearance that important dimensions have been omitted when instead they have been captured by proxy.
To keep these measures comparable, they had to be put on the same scale. For instance, crime rates are measured in terms of incidents per 100 000 population, and access to piped water is measured in terms of percentage of households. As the range of observed values for these diverse measures fluctuates dramatically they have to be placed on a similar scale. The scale adopted was based on a comparison of provincial rates of each index in the two time periods. That province which was ranked worst of all at either of the two time-points received a score of zero for that component. The province that had the best measure of that component in either of the two years received a score of 1. In order to achieve this, some of the components are expressed somewhat awkwardly. Instead of talking about unemployment rates we have to use the less familiar "employment rates" - which is 100 minus the percent unemployed.
After scaling all the constituent parts of the index from 0 to 1, they were then averaged to reveal an index value for the two periods in question. Thus if a province received, in any one year, the worst provincial ranking for all the constituent measures it would receive a composite score of 0. All other provinces receive a score of more than 0 and less than or equal to 1.
This title is somewhat of a misnomer as it refers to the level of services associated with housing.
weekly rubbish removal access to telecommunications access to electricity.
This index is intended to measure the quality of life beyond the mere ability to access employment and services.
Access to medical facilities indicates the degree to which people can address health issues. This is measured by the percentage of households reporting that they can access a hospital or clinic in less than an hour.
Adult functional literacy shows the increasing extent to which adults can access the opportunities associated with the ability to read. Literacy gives people the ability to follow written instruction and thereby get better access to services and facilities and other opportunities.
The percentage of people using electrical stoves reflects, largely, the proportion of households not using wood or coal fires and thereby detracting from the quality of urban air. It is a proxy measure for environmental quality.
This index measures the involvement individuals have in the wider community. Three forms of involvement were identified: political participation, trust in political structures and workplace participation.
Political involvement was measured by the proportion of eligible people voting in the two most recent local government elections. Use of the local government elections gets us away from the use of the founding election of 1994, which had anomalously high turnout.
Political approval was measured by an approval rating of the political institutions derived from Afrobarometer.
Workplace involvement is measured by the percentage of formally employed workers who belong to a trade union.
This index is used to gauge the extent to which South Africans are integrated into society as a whole.
ï¿½ Membership of cultural organisations.
The proportion of households in which the household head has a partner.
Home ownership which is used as a proxy for inclusion. There is a strong body of international literature pointing to home ownership as a prime motivator for individuals to include themselves in the community.
Both the components of this measure are well-known and need little expansion.
Employment rate reflects the proportion of the economically active population who consider themselves employed or looking for work (narrow definition). The measure thus excludes that proportion of people who are of economically active age but who have given up on seeking employment. This latter group is no longer considered economically active.
Ave rage earnings indicate the earning received by wo rke r s. To ke e p the earnings for the two periods compara bl e, the 1995 earnings have been adjusted to reflect 2002 values by multiplying them by 1.53.
This composite index attempts to capture the extent to which the population can exploit opportunities should they present themselves.
proportion of the adult population which is economically active.
average number of years schooling.
extent to which grade 11 progress to grade 12.
proportion of science and technology enrolment in higher education institutions.
This index reflects not only people's exposure to serious crime (including murder, robbery with aggravating circumstances, common robbery, rape, assault, burglary and auto theft) but also the likelihood victims will see some element of justice.
serious crime rate.
court prosecution rate.
The resolution rate.
The latter two are correlated but point to different dimensions of the security system. The prosecution rate indicated the likelihood a reported crime will end up with a suspect appearing in court. The resolution rate indicates the likelihood that suspect is convicted or acquitted.
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Leggett, Louw, T. A. Maepa, T. Masuku, S. Pelser, E. Schonteich, M.
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Leggett, T. and Pharaoh, R.
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The research was undertaken by a project team in the Policy Coordination and Advisory Services in the Presidency assisted by the Department of Social Development. The project was overseen by a steering group of Ministers including the Ministers of Social Development (chair), Education, Finance, Foreign Affairs, Health, Justice, Provincial and Local Government, Public Enterprises, Public Service and Administration, Trade and Industry and the Minister in the Presidency. The project outputs were reviewed by the Directors-General (DG) clusters. Individual departments in Government made direct contributions to the project outputs. Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) provided project support through the Economic and Development Policy Advisory Programme (EDAP). Other funders included the Governments of the United Kingdom (DFID), Sweden (SIDA) and Denmark (DANIDA).