Something New Out of Africa: A Global Player

IMF Blog, March 10, 2010

Source details

South Africa “is a global player,” showcased by its role in the G-20 and the World Cup.
By some estimates, close to 10 million people are expected to visit South Africa this summer for the football (soccer) extravaganza—a further boost to its economy and its image in the world.
As a G-20 member, South Africa has moved from being seen primarily as the growth hub in the south and eastern part of the continent to being “an influence on how global decisions are shaped.”
The author notes regular engagement with President Zuma at G-20 meetings and meeting him again in South Africa.

The IMF perspective: South Africa weathered the financial crisis well with pragmatic countercyclical policies that enabled the country to withstand its first recession in 20 years.
Growth dynamics and projection:
- In 2009, growth fell below the average 4.2 percent achieved during 2000-2008.
- The IMF expects a relatively healthy 2.5 percent in 2010.

Tackling unemployment:
- South Africa lost close to 1 million jobs last year.
- In a country of about 50 million people, unemployment is expected to peak at around 25 percent.
- Job creation has resumed but remains anemic; the question posed: “Where are the jobs going to come from?”
Reducing inequality:
- South Africa has now surpassed Brazil as having the highest level of inequality in the world.
- The country has taken steps to address apartheid-related injustices in housing, education, and health care, but “much remains to be done.”
- Demographics: one-third of the population less than 14 years old—heightening the risk of social tensions if youth lack improved quality of life prospects.
Building a flexible, competitive economy:
- A growing economy is necessary but not sufficient; policies to bring down barriers to competition across key sectors are recommended to strengthen South Africa’s position in global markets.
- Other reforms to enhance flexibility in labor and product markets can also help.
- Objective: build resilience to global economic shocks.

The author emphasizes South Africa as a “forward-looking, life-affirming society.”
Grassroot Soccer (visited in Soweto) is highlighted:
- Delivers HIV/AIDS counseling and more general life skills to youth, leveraging the popularity of football (soccer).
- Over 300,000 kids have graduated from the program.
- The visit to Grassroot Soccer left the author “filled with emotion—and inspiration,” underscoring confidence that “South Africa is going to meet its challenges.”

Dominique Strauss-Kahn, March 10, 2010 — Something New Out of Africa: A Global Player