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CHAPTER 1 1.

1 Introduction According to McGrew (2005:20), the sheer scale and scope of global interconnectedness, over the last three decades has become ever increasingly evident in every sphere of interaction from economic, cultural even political. This increase in interconnectedness, he charges has been greatly encouraged and assisted by the ever changing, and rapid advancement in technology, which has led to increased co-operation and integration among modern states. It is, in this changing global environment that the newly elected South African government found themselves, when the transition from an apartheid state, to a democratised state was realised. This democratized state, led to not only a new dawn for politics in the country, but also a new dawn for the economic policy that would have to be implemented. The new government was now mandated to not only formulate, but also implement economic policies, which would reduce the inequalities that the vast majority of the population had endured during the Apartheid era. Since 1994, a number of economic policy strategies have been formulated and implemented by the South African government. The implementation and adoption of these policies according to the government, was that they would allow it to not only meet its developmental challenges, but that they would allow the South African economy to compete with other emerging and established markets worldwide. 1.2 Rationale and significance of the study Though, much research has been carried out on the economic policy frameworks implemented in South Africa since the end of apartheid. The focus has mainly, been on the impact of these policies on the country, and on whether the policies have led to the desired outcomes by the government, such as decreasing the poverty gap, and increasing employment within the country. The motivation behind this constant change of policy, being that, the new and improved policies would lead to not only greater efficiency and effectiveness in the economy, but that it would lead to an increase in resources, which would further assist the government in achieving its developmental goals in terms of providing basic public services and alleviating poverty and inequality in South Africa. However, there are those such as (FIND THREE AUTHORS FOR THIS) who argue that, though an assessment on the effect of implemented economic policies is relevant, they argue that one should be more concerned with why certain economic policies have been implemented instead of others. They are

more concerned with the influence global actors and the global environment within which South African policy is formulated has had on the types of policies that have been implemented in the country. They are in essence more concerned by factors that have influenced the government in formulating and implementing certain policies, specifically economic policies. This thesis aims to ascertain to what extent, if any, globalisation, the global environment and global actors have influenced the economic policies implemented in South Africa since democratization. This thesis will analyse whether the policies formulated and implemented by the government have followed a rational thought out process, on the perceived outcomes and costs to the country. Alternatively, whether the policies formulated and implemented were irrelevant to the South African experience, and contradicted the governments mandate, but were implemented due to the influence of other factors and global interests. 1.3 Research Topic The topic under investigation is: To what extent has Globalisation and Global Actors moulded economic policy in South Africa since democratisation? 1.4 Main Research questions to be investigated The overall aim of this research is to assess some of the economic policy frameworks introduced in South Africa between the periods of 1994-2008. The following specific questions will be addressed:

What effect, if any, globalisation has had on economic policy in South Africa? Is the influence of globalisation and global actors on policy in South Africa overstated?

1.5 Research Objectives

To provide an overview of the economic policies/strategies introduced in South Africa since 1994. Analyse to what extent the implementation of these economic policies was influenced by globalisation and global actors, rather than local concerns

Evaluate to what extent these policies these policies go against/clash with the governments mandate as a provider of basic services Evaluate the effects this has had on the governments ability to meet its developmental challenges. Analyse the likely impact the implementation of these policies has had in the governments ability to implement future economic policies.

1.6 Data collection and Methodology

1.7 Document Structure This thesis is structured as follows: Chapter 2 will provide a literature review on the concept of globalisation, setting out the conceptual framework within which the thesis will be based. Chapter 3 will provide a contextual understanding of South Africas economic policy environment in the period before democratisation, and the economic policy implemented right after democracy. Chapters 4 will two specific economic policy frameworks formulated and implemented in South Africa and analyse whether their applications in the country, was due to influence from global actors and globalisation, or whether they were suited for the country. Each section will begin by describing the evolution of the specific economic policy, the rationale behind the policy, the proponents of the policy, and the arguments against the implementation of the policy in South Africa. Chapter 5 will examine the effects the conflicts that have arisen in the implementation of these polices, and what effect if any they have had/ or will have on future policies. Chapter 6 will contain the conclusion

Chapter 2: Literature Review 2.1 Introduction This chapter will present the literature review on the concept of Globalisation, and its effect on policy formulation and implementation. The chapter, will survey all the relevant theoretical models and frameworks on the concept of globalisation and provide an analysis on the arguments that are borne from its definition, and from its perceived impact or effect on the policies formulated and implemented in sovereign states. Though, this thesis is mainly concerned with economic policies in SA, and on analysing whether they have been influenced by global actors or globalisation. Due to a lack of relevant scholarly articles, this literature review will provide an overview on the impact of globalisation on Policy formulation worldwide, though we will focus specifically at the literature concerning the impact of globalisation on newly democratised and developing countries in the world. Thus, this overview of relevant literature pertaining to the concept of Globalisation, and its impact on policy will provide us with the conceptual framework for which this thesis will be set. 2.2 Definition of globalisation Globalization, as a concept is frequently used, and has become a buzzword to explain the many activities and interactions that are occurring in the world. Its complexity and multi-dimensionality, has made it that, a clear and uncontested definition of the concept have become elusive. Robinson (2007:125) supports this notion when he argues that as one of the the key concepts of the twenty-first century, it is one of the most hotly debated and contested. This according to Robinson (2007) is because there is no agreed consensus on what has been going on in the world, let alone a concrete definition that encompasses the different and distinct interpretations of what is going on. Hence, the very notion of globalization is problematic given the multitude of partial, divergent and often contradictory claims surrounding the concept. Robinson (2007) argues that globalisation can be understood as a discourse, since it is a process of change, for which there is no clear, widely acknowledged, and accepted definition. Different scholars and commentators on the subject accept this notion, since they argue that everyone seems to

have a different understanding and definition on what the concept of Globalisation actually is, and what its specific characteristics are. Collier (1998:1), defines globalization as the process of integration in product, markets and financial markets. McGrew & Lewis (1992:65) define globalization as a process through which events, decisions, and activities in one part of the world can come to have significant consequences for individuals and communities in quite distant parts of the globe. Baylis & Smith (2006; 724)on the other hand understand globalization as a process by which there is advancement and an increase in interaction among countries in the world, facilitated by technological advances, communication, political and military power, as well as cultural and value systems. The most important aspect of globalisation lies in the idea that it leads to the economic globalisation. This refers to the integration, and co-operation of national economies and financial systems with the global/ international economy through increased trade (Baylis & Smith 2006:7). Mosert (2003) argues that the process of financial and economic globalisation is the most important part of the process of globalisation. Since, it allows one to gain insight into the general process of globalisation by studying the process of financial globalisation. In essence, it is the globalization of finance and all commerce in the world. Social and cultural globalization, on the other hand, refers to the integration and constant daily fusion of cultures and social ideas around the world. (Bhagwati 2004:106-117) The definitions provided above, show a clear example of the difficulty in finding a clear and consensus definition, since different scholars attach different variables, and understanding to the concept of globalization. However, it should be noted that, though no consensus on the definition of globalization is found, all the available definitions of globalization seem to agree on some points. Firstly, that globalisation can only be precipitated through technological advancement, and secondly, that it involves the increased integration of states through the breakdown of borders between countries, governments, and economies. In essence, globalisation is understood as a period of increased and intensified integration among countries through the market. This involves the exchange in flows of goods, services, people, ideas, information and people among countries, facilitated by advancement in technology. Thus, the consequence of

globalisation being increased integration and co-operation between national borders in economic, social and cultural activities. 2.3 Globalisation and its influence on policy worldwide

2.4 Summary

Chapter 3: Historical formulation in SA


3.1 Introduction

context

of

economic

policy

The transition from an apartheid state, to a democratic state on the 27th of April 1994 herald not only a new dawn in politics within South Africa but also, a new dawn in the economic policies that the new administration would have to implement within the country. The government was now tasked with formulating and implementing economic policies, which would not only reduce poverty, lead to economic growth, create employment and allow for the equitable distribution of income and wealth within the country. Thus, the primary objective of the governments economic policies was to implement policies that, would not only provide the government with the adequate resources required to deal with the developmental challenges that the country faced, but that would create a positive economic environment, which would entrench confidence on the governments abilities to implement sound economic policies. In order to fully understand the economic policies implemented by the government

3.2 SA Economic policy pre 1994 contextualised 3.3 SA Economic Policy post 1994

In order to fully understand t

Chapter 4: Analysis of whether SA Economic policies since 1996 have been influenced by Globalisation
4.1 Introduction 4.2 Growth Employment and Redistribution (GEAR) 4.1 1 Introduction 4.1.2 Rationale behind the policy, 4.1.3 Arguments that the policy globalisation and by global actors was implemented due to

- look at two policies to support the argument (GEAR and Inflation targeting)

4.1.4 Arguments that policy was influenced by local concerns 4.1.5 Summary 4.3 Inflation targeting 4.3.1 Introduction 4.3.2 Rationale for policy implementation in SA 4.3.3 Arguments that the policy implementation globalisation and by global actors was due to

4.3.4 Arguments that policy was influenced by local concerns 4.3.5 Summary

4.3 Summary

Chapter 5: Findings on who has influenced policy in SA

Chapter 6: Conclusion References

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