SOUTH AFRICA

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Development Challenge Other Donors FY2001 Program / Activity & Budget Information Summary Tables Program Summary Work Force Data Program/Sector Summary USAID Search: South Africa Previous Years' Activities 2000, 1999, 1998, 1997 48     Introduction Ensuring South Africa's successful transition to a pluralistic, market-oriented and economically sustainable democracy is fundamental to U.S. national interests of supporting democratic societies, pursuing U.S. economic prosperity and reducing the need for humanitarian assistance in sub-Saharan Africa. South Africa is the most outstanding example in the world today of how severe political, racial and ethnic differences may be resolved through negotiation and compromise. South Africa also plays a crucial role in the political stability of southern and central Africa. South Africa's relatively large economy has the potential to be a significant market for U.S. exports and an engine of growth for other southern African economies. Given South Africa's strategic and economic importance in Africa, USAID's goal is to help ensure that South Africa successfully completes the transformation from a statist, apartheid regime to a democratic, multi-racial society with an open, market-based economy. U.S. economic assistance and private investment are important vehicles for accomplishing this goal. Since the first democratic election in 1994, the United States has been the largest source of foreign direct investment in South Africa (a cumulative amount of $3.3 billion). The Development Challenge South Africa's principal development challenge is to provide access to quality education, health care, housing, justice, and opportunities for productive employment to the majority of its citizens who were systematically denied access and opportunities under apartheid. South Africa's geographically limited but highly visible first world infrastructure co-exists with widespread poverty comparable to the rest of Africa. Income inequality is among the highest in the world; education and health status are glaringly different between racial groups. About 50% of households lack adequate housing, while 45% lack clean water and sanitation. One third of the African population is functionally illiterate, and less than half of black students successfully complete primary school. The infant mortality rate worsened from 40 per 1,000 in 1991 to 45 per 1,000 in 1996. South Africa's HIV/AIDS epidemic, one of the worst in the world, threatens to reverse recent development gains. An estimated 15% of the adult population already is infected with HIV, with an estimated 1,700 new cases daily. Without a decline in the rate of transmission, 25-35% of the adult population will be HIV positive by 2010. It is estimated that by 2005 at least 2 million children will be orphaned as a result of AIDS. Despite South Africa's adherence to prudent monetary and fiscal policies, economic growth has been slower than anticipated. As formerly protected industries strive to become globally competitive, they have shed 500,000 unskilled and semi-skilled jobs. Unemployment, measured at 23% in 1997, impacts most severely on the black population. While crime rates are among the highest in the world, particularly for violence against women, arrest, prosecution and conviction rates are among the lowest. The high level of crime is a disincentive for much-needed foreign investment. South Africa's debt, almost all of which is owed to domestic creditors, constitutes 45% of gross domestic product. Following a successful second democratic election in 1999, South Africa's leaders are focused on fostering tangible improvements in the lives of the majority population. High unemployment, insecurity due to crime, and inadequate social service delivery are concerns of the entire population. Failure to address these issues in a sustained manner could jeopardize the country's considerable progress in deepening democratic values and advancing along its chosen path of equitable economic development. Reducing unemployment will require strong economic growth balanced with practical, decentralized initiatives to increase black participation in the economy. Improving the effectiveness of the criminal justice system is essential to provide a deterrent to criminals and justice for the victims. It involves a wholesale transformation of judicial institutions whose principal purpose used to be upholding apartheid laws. Providing adequate education, health, housing and other social services to the previously underserved population is a massive and complex task requiring ingenuity and cooperation among a large array of institutions. USAID works in partnership with the Government of the Republic of South Africa (RSA), U.S. and South African nongovernmental organizations (NGOs) and private sector financial institutions to support South Africa's development objectives. The USAID program has achieved notable impact in facilitating RSA government policy formulation, including providing analysis for legislation affecting human rights and the transformed system of local government, and for key macroeconomic, labor, education and housing policies. USAID also supports NGOs and private sector entities to expand delivery of services to the historically disadvantaged population. With USAID assistance, 17 historically disadvantaged universities and technical institutes are improving their administrative management practices and revising curricula, paving the way for improved quality of and greater access to higher education for the majority population. In the Eastern Cape, South Africa's third most populous province and one of its poorest, the availability and quality of primary health care is improving markedly as a result of USAID's support to the provincial health department. USAID is assisting historically disadvantaged small, medium and microenterprises to gain access to credit. Municipal infrastructure loans leveraged from private financial institutions using USAID guarantees will provide water, sanitation services and electricity to low income families. In every sector, USAID has made substantial investments in building human and institutional capacity to participate in South Africa's transformation. Other Donors The United States is the second largest donor and largest bilateral donor to the Republic of South Africa. Other major donors are: (1) the European Union (total 1999 program $129 million), with programs in democracy and governance, education, economic policy, health and the private sector; (2) the United Kingdom (total 1999 program $47 million), which assists in democracy and local governance, education, health and economic policy; and (3) Germany (total 1999 program $13 million) with democracy and governance, adult basic education, economic policy and housing programs. Japan and the United Nations Development Program also have large programs, providing assistance in urban development, policy formulation and health. Country Background Information Resources   CIA Factbook Library of Congress National Geographic Country Maps State Dept. Country Information

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