ANNUAL REPORTS

Macroeconomic overview
Rehabilitating Spekboom in the Eastern Cape.
In the past year, the global economy began to recover
but conditions remained challenging around the world.
The sources of the challenge varied from country to
country. In some, it was the economic and financial
aftermath of the global crisis and the ensuing recession.
Others were affected by long-running structural macroeconomic
problems and resulting imbalances. Still others
faced the legacy of uneven socio-economic development,
poverty and inequality on both a country and a global level.
For the DBSA, 2010/11 was equally challenging. South
Africa and the SADC region experienced both favourable
and adverse economic conditions, as they continued to
confront formidable challenges in the economic, financial
and institutional realms.
Global conditions
After the sharp contraction in what has been called the
“Great Recession” of 2009, the global economy stabilised
in the latter part of 2009 and then rebounded surprisingly
strongly in the early part of 2010. Although the recovery
continued, it ebbed somewhat during the year, as various
limiting factors came into play.
Driven by internal forces, the rapidly industrialising and
urbanising developing countries of Asia – China and
India in particular – had weathered the global recession
particularly well and were pulling the global economy out
of recession. However, many of the advanced economies
of North America and Europe were mired in structural
problems, with economic recovery at best tentative and,
at worst, still some way off. The deep economic problems
that affected their recovery included high fiscal deficits, high
levels of personal debt, poor international competitiveness,
high levels of unemployment, and public austerity measures
implemented in an effort to rectify an untenable fiscal situation.
Superimposed on this pattern, two factors in particular
slowed the pace of the global recovery. The first was signs
of overheating in the fast-growing Asian economies and in
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