(AsgiSA) Annual Report 2008 - South African Government Information
(AsgiSA) Annual Report 2008 - South African Government Information
(AsgiSA) Annual Report 2008 - South African Government Information
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Accelerated and Shared Growth Initiative for <strong>South</strong> Africa<br />
ANNUAL REPORT<br />
<strong>2008</strong><br />
1. Introduction<br />
The Accelerated and Shared Growth Initiative for <strong>South</strong> Africa (<strong>AsgiSA</strong>) was prepared during<br />
2005 and launched in February 2006. Its objectives were to introduce policies, programmes<br />
and interventions that would allow the <strong>South</strong> <strong>African</strong> economy to grow enough to halve<br />
poverty and unemployment between 2004 and 2014.<br />
The global economy has entered a difficult period with many major economies in recession<br />
and many developing economies growing much more slowly than in recent times. This<br />
recessionary period may continue for longer than previously expected and may get still<br />
deeper – it is still hard to predict the direction and timing of future developments in the<br />
world economy.<br />
The result is that the original <strong>AsgiSA</strong> target of growing at an average rate of 6% between<br />
2010 and 2014 now may appear implausible. In turn, the target of reducing poverty by half<br />
to 14% or less in 2010 may appear to be endangered, and possibly also the target of halving<br />
poverty between 2004 and 2014. What are the implications of the current crisis for <strong>AsgiSA</strong>?<br />
When <strong>AsgiSA</strong> was launched in February 2006, the “binding constraints” on growth and employment<br />
creation were identified as:<br />
• deficiencies in government capacity<br />
• the volatility of the currency<br />
• low levels of investment infrastructure and infrastructure services<br />
• shortages of suitably skilled graduates, technicians and artisans<br />
• insufficiently competitive industrial and services sectors and weak sector strategies<br />
• inequality and marginalisation, resulting in many economically marginalised people<br />
being unable to contribute to and/or share in the benefits of growth and development<br />
(the “Second Economy”).<br />
Strategies or interventions tailored to address these six areas were developed and implemented.<br />
Some of these strategies are widely credited to have had a significant impact. The<br />
overall result was that unemployment was reduced quite dramatically from a peak of over<br />
31% in 2003 to around 22% by late <strong>2008</strong>. Similarly, poverty fell quite considerably in this<br />
period, due to the expansion of social grants and higher levels of employment. Had we<br />
continued to grow at a similar rate to the 5% or more of 2004 to 2007, the targets looked<br />
achievable.<br />
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