Country Analysis -- Policy Recommendation

Major problem of the South African economy:

The unemployment rate is unreasonably high. About a quarter of the South African population is unemployed. According to a 2013 Goldman Sachs report, the unemployment rate is at around 35% including the discouraged workers (those who are so discouraged of after repeated failures and have given up on searching for a job) It does not just imply poverty problem. It as well means that South Africa actually has a huge idled labor force waiting for be mobilized to develop the economy. On the other hand, as so many people are unemployed and could not sustain their living, it resulted in a relatively high crime rate. Together with inequity, social unrest is more serious and it brings harm to not only domestic industries, it as well discourages foreign investment.

Proposed policy targeting the current situation:

Equipping the South African population with better skills so as to improve the labor quality is essential to increase the employment rate in South Africa. More vocational schools should be established to train the labor force of South Africa to make sure that the skills of the South Africans in line with the economic development. Improving the literacy rate is crucial.

Subsidizing domestic enterprises is helpful in terms of expansion of local job opportunities. The problem why so many people are unemployed is caused by the lack of job vacancies in the domestic market. If the government could allocate more resources to support the domestic enterprises, new enterprises can be opened up and the existing ones can go for further expansion as well.