South African Economic Reconstruction and Recovery Plan as a response to South African economic crisis

Abstract

The impact of the current Covid-19 pandemic on the economy presents an opportunity for an economic reset in South Africa. The economic reset will provide a chance for structural transformation that will underpin economic growth and sustainable development. The Covid-19 pandemic has entrenched and exposed South Africa’s inequality. Unemployment is at an all-time high and over half of South Africans, the majority which is African live in extreme poverty. This inequality has created a conducive environment for the recent instabilities that led to mass looting and property destruction. In response to the economic crisis and the Covid-19 pandemic, the South African government adopted the South African Economic Reconstruction and Recovery Plan to reconstruct and reset the economy. However, the South African Economic Reconstruction and Recovery Plan do not present an opportunity for the economic reset but it’s a perpetuation of neoliberalism. Therefore, the call “to build a new, inclusive economy that benefits all South Africans” is nothing but buzzwords without any meaning. The plan mimics rhetorical calls for job creation and industrialization made by previous policies i.e. National Development Plan (NDP) and New Growth Path (NGP) without any operational plan and a new course of action. In addition, the plan is intended for South Africa to move towards the target set in the NDP, vision 2030. This paper analyzes the South African Economic Reconstruction and Recovery Plan as a response to the economic crisis. Moreover, the paper seeks to determine whether the plan will lead to desired results of economic reconstruction. In conclusion, the paper determines whether neoliberalism is the correct trajectory for South African development or is there a need for a developmental state.