Situation and Cooperation

South Africa is seen as the economic powerhouse of the African continent. The country accounts for roughly one quarter of the continent's total economic output, it has a robust industrial sector and an abundance of natural resources. It is the world's largest producer of platinum, gold, chrome and diamonds and the world's third largest exporter of agricultural products.

In contrast to most other African countries, South Africa's manu­fac­tur­ing industry occu­pies a strong, steadily growing place in the eco­nomy. Up until the global eco­nom­ic crisis hit, the auto­motive industry and con­struc­tion sector in parti­cular had been expe­riencing a sig­ni­fi­cant upturn. The coun­try's biggest foreign cur­rency earners are platinum, coal and the booming tourist trade. From the late 1990s onwards, the South African eco­nomy grew by between two and five per cent a year. In 2009, the global economic crisis caused eco­nomic output to decline by nearly two per cent. For 2011 and 2012 growth is expected to be between three and four per cent.

However, South Africa is faced with a large number of domestic and struc­tural prob­lems. The 2009 crisis has left its mark: over one mil­lion people lost their jobs. The South African Gov­ern­ment responded with state trans­fers, but these invest­ments have done no more towards bringing about lasting social im­prove­ments than the enor­mous amount of public money, almost 80 bil­lion euros, spent on the foot­ball World Cup in 2010. What is more, for the first time in years South Africa has again reported a budget deficit.

The country's social and economic problems are aggravated by critical factors in other areas, such as the low level of confidence in decision-makers, poor administrative performance and major shortcomings in the quality of education. Despite its status as an upper middle income country, South Africa ranked only 123rd of the179 countries in the 2011 Human Development Index.

South Africa is facing enormous challenges in the energy sector. There has been an electricity crisis for several years, which led to significant power outages in 2008 in particular. At the same time, the Government is being forced to restructure power production – primarily in order to achieve the international climate protection goals. Coal still accounts for 93 per cent of the electricity supply, while renewable energies currently provide less than one per cent.

The South African Government has set ambitious growth targets for renewable energies and energy efficiency. For example, by 2030 the production capacity of wind and solar energy is scheduled to increase to 18,800 megawatts. At the same time, the Zuma Government has stated its intention to reduce carbon dioxide emissions by 34 per cent by the year 2020, and by 42 per cent by 2025, making it clear however that South Africa will only achieve these goals if it has the support of the international community.

With the establishment of the National Planning Commission headed by Trevor Manuel, a long-serving former Finance Minister, the South African Government launched an open and dialogue-oriented analysis process for South Africa's development in the post-apartheid era aimed at developing a long-term vision for South Africa's development based on an uncompromising diagnosis of existing shortcomings.

Stark contrasts

South Africa is still grappling with a deep eco­nom­ic and social divide – the legacy of decades of apart­heid policy. It is one of the coun­tries with the greatest in­equa­lity in the world and the largest gap be­tween rich and poor. The richest 20 per cent of the pop­u­la­tion ac­count for more than 70 per cent of total in­come, whilst the poorest 20 per cent earn only 2.3 per cent. Infant and ma­ter­nal morta­lity rates are extre­mely high for a middle in­come coun­try (43 per 1,000 births and 625 per 100,000 births respectively).

Under the apartheid regime, most people from the underprivileged sections of the population did not receive the vocational training required for the modern labour market; the skilled jobs were reserved for whites. The consequences of this policy are still felt today. There is a shortage of skilled labour, which in effect is a serious obstacle for the ambitious growth plans of the govern­ment and the corporate sector. Around seven million people are considered to be long-term unemployed with no job prospects. More than half of the under-30s have never had a regular job. Added to this is the com­pe­ti­tion from millions of illegal migrant workers from neigh­bouring states. Since 2008 there have been repeated violent anti-foreigner riots, an indi­ca­tion of growing social tensions.

There are huge disparities in income. More than a quarter of South Africans are currently reliant on benefits. Poverty is rife, especially in the rural regions of the former homelands, in the urban problem areas of the former town­ships and in the informal settle­ments that came into being after 1994. These regions also have the greatest defi­cien­cies as regards the pro­vi­sion of public services, such as water and electricity. Unlike in other African countries, the rural areas are not an alter­na­tive in urbanised South Africa. The long-standing goal of com­pre­hen­sive land reform in favour of the black majority is not moving forward.

Coordination between government at national, regional and local level remains insufficient. There is a shortage of qualified administrative staff. The government has recognised the need for action and presented a growth initiative. Billions are to be spent on reducing poverty and improving infrastructure.

Dissatisfaction is growing, however, especially in the cities. Neither the numerous social transfers nor inter­national attention and invest­ment during the football World Cup have led to a no­tice­able im­prove­ment in living con­di­tions. Social struc­tures are un­sta­ble and crime is on the in­crease. South Africa has one of the world's highest rates of murder and rape, and violence is common.

AIDS

The spread of HIV and AIDS is a major problem for South Africa's society and economy. More than 5.6 million people are HIV-pos­i­tive. Every day 1,000 people are newly in­fec­ted. Eleven per cent of the world's tuber­cu­losis suf­ferers live in South Africa. Tuber­cu­losis is one of the biggest killers of AIDS patients. The high infec­tion rates have had a dramatic impact on life ex­pec­tancy, which has fallen from 65 years to 52.8 years in the space of twenty years.

AIDS poses al­most in­sur­mount­able prob­lems for the wel­fare sys­tem. The fund­ing gap in public health is one bil­lion dollars per year. Ac­cord­ing to UNAIDS, appro­xi­mately 1.9 mil­lion children have lost one parent or both parents as a result of AIDS. The health, educa­tion and per­sonal de­vel­op­ment of these children is under threat.

The spread of HIV and AIDS affects many other policy areas and is therefore an important part of the political agenda. The current government has set five priorities for the current legislative period to 2014: combating unemployment, improving education, rural development, expansion of health care, and the fight against crime and corruption. A national health insurance scheme is to be introduced in 2012 on a trial basis. However, the problems that South Africa is facing here are so daunting that the country will most probably not meet two key Millennium Development Goals: eradication of extreme poverty (MDG 1) and the containment of HIV/AIDS (MDG 6) by 2015.

Development potential

South Africa has great de­vel­op­ment poten­tial that stretches well beyond its bor­ders. In the medium term, it can con­tri­bute to the poli­tical, eco­nom­ic and social sta­bi­li­sa­tion of sub-Saharan Africa. In terms of the global eco­nomy, South Africa acts as an inter­mediary be­tween industria­lised and de­vel­op­ing coun­tries. In inter­natio­nal orga­ni­sa­tions such as the United Nations, the G20 and the World Trade Organization, it sees itself as an advocate of the interests of the South. South Africa plays a pivotal role in regio­nal inte­gra­tion pro­cesses and ini­tia­tives, being a leading member of the African Union (AU), the New Partner­ship for Africa's De­vel­op­ment (NEPAD), the Southern African De­vel­op­ment Com­munity (SADC) and the Southern African Customs Union (SACU).

Further economic growth is possible in South Africa, especially in manufacturing industry, in the mining sector, tourism and the "green" sector, which is forecast to generate 300,000 new jobs. However, it is the people who constitute the country's greatest potential, albeit a potential that has not yet been sufficiently harnessed. Through its constitution, South Africa has created the necessary preconditions for equality of opportunity regarding access to education, and also material and natural resources. This will allow society to continue developing successfully along democratic and pluralistic lines.

Priority areas of German cooperation with South Africa

During the apartheid regime, cooperation with South Africa was restricted to German and South African non-governmental organisations. Support for the extra-parliamentary opposition and the promotion of education and culture were the priority areas of those efforts. Official governmental development cooperation with South Africa commenced in 1992. Government negotiations have taken place every two years since the first democratic elections in 1994.

Since 1996, the German-South African Binational Commission (BNC) has been the most important body in terms of conducting political dialogue with South Africa. The Commission was set up on the occasion of a state visit to Germany by Nelson Mandela.

The BNC is made up of representatives from six individual commissions on development, defence, environment, business, science/research and culture. It meets once every two years. Its remit extends far beyond a routine exchange of information; in addition to evaluating existing activities, it is also concerned with the development of future-oriented programmes. The Binational Commission is jointly chaired by Germany's Vice-Chancellor and South Africa's Deputy President.

During a visit to South Africa in April 2010, Development Minister Dirk Niebel pledged 112.5 million euros for cooperation with South Africa for the two-year period from 2010 to 2011. The following are agreed as priority areas of cooperation:

• Energy and climate

• Good governance and violence prevention

• HIV/AIDS prevention.

Germany is also involved in vocational training. In future activities will be concentrated primarily on the development of occupations in the "green" sector and on eliminating skills shortages for the development of renewable energies.

The development partnership with one of the most populous, politically important and stable countries in Africa is expected to deliver two things: first, help in addressing South Africa’s his­tor­i­cal burden and over­coming the struc­tural causes of poverty and extreme in­equa­lity; second, help South Africa achieve regional and global de­vel­op­ment goals and con­tri­bute to the sta­bi­lity of the African con­ti­nent. An im­por­tant cri­terion for the com­mit­ment of funds to speci­fic pro­jects is their inno­va­tive poten­tial and their poten­tial for removing serious obstacles to development.

Cooperation with South Africa in the energy sector is coordinated among a number of German ministries. Alongside the Federal Ministry for Economic Cooperation and Development (BMZ), many other federal ministries are involved in South Africa, including the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), the Federal Ministry of Education and Research (BMBF) and the Federal Ministry of Economics and Technology (BMWi).

Energy and climate

Renewable energies and energy efficiency are important themes within German development cooperation with South Africa. In this way, South Africa's Government is being assisted with the modernisation of power generation, with climate protection and adaptation to climate change. The aim is to develop regenerative sources of energy and their use and to boost energy efficiency in order to bring about a sustainable improvement in energy security and make economic growth more climate-friendly.

Ninety-three per cent of South Africa's constantly growing demand for energy is currently being met with coal from domestic mines. But this means that South Africa is a major emitter of greenhouse gases; at the same time, the country is seriously affected by climate change. Since South Africa is a major supplier of energy for many countries throughout the region, more efficient energy generation will enhance energy security and development for the entire region.

With German support, low-interest loans are being offered via South African financial institutions to small and medium-sized South African businesses so that they can invest in renewable energies and energy efficiency measures. Renewable energies and energy efficiency measures also create new "green" jobs. For example, Germany is supporting the training of energy auditors for energy efficiency measures in public buildings. Another example of cooperation in this area is the installation of solar home systems for rural electrification in Eastern Cape Province.

Governance and public administration

Governing South Africa is made more difficult by capacity bottlenecks, inefficiency and corruption. There is a lack of trained administrative staff, not just nationally but also and above all in the provinces and districts. In some cases more than one quarter of the posts in the public sector are vacant. Good governance is, however, an important precondition for sustainable development and poverty reduction. For this reason, one aim of German development cooperation is to help South Africa to create an efficient administration system that serves all its citizens equally. The main focus of our cooperation is on strengthening centres of government, fighting corruption, developing the judicial system and improving human resources management in the public sector.

Moreover, Germany is also supporting community-based measures for preventing violence, for example by improving social and economic infrastructure (safe footpaths, public spaces, sports fields, community centres and retail areas), developing security patrols and supporting community organisations (such as legal advice centres, HIV prevention centres) in the deprived areas of large cities. Another example of Germany's involvement in this area are footballing activities for children and young people as violence prevention measures. Football games with coaching and supervision, other leisure activities and the construction of recreation areas give children and young people in various South African provinces and in other African countries the opportunity not only to learn about team spirit and fair play, but also to practise social integration, experience different ways of resolving conflicts without violence, become better informed about HIV/AIDS and learn to be more environmentally aware.

HIV/AIDS prevention

The spread of HIV/AIDS has led to a huge drop in average life expectancy in South Africa. Twenty years ago it stood at 65 years, now it has dropped to 52.8 years. The direct and indirect consequences of this epidemic have caused South Africa to slip down the UN Human Development Index (HDI) rankings from 89th in 1995 to 123rd (out of 187 countries) in 2011.

The disease is jeopardising not only the country's economic development but also its social stability. HIV and AIDS are a threat to the lives and livelihoods of countless families. There are many children caring for sick relatives. The estimated 1.9 million children who have lost one parent or both their parents as a result of AIDS are particularly at risk of economic and sexual exploitation. Their health, education and personal development are threatened. The result is an increased danger that they might see crime as the only solution to their problems. At the same time, the psychological impact caused by the repeated traumatic experiences of suffering and death are placing an increasingly heavy burden on society. The welfare system is faced with almost insurmountable problems because of AIDS.

Shortcomings in the medical sector and the government's indecisive HIV/AIDS policy for a period of many years are felt to be jointly responsible for this development. It is only since the new government under President Zuma took office in April 2009 that serious efforts have been undertaken to combat HIV.

Germany is supporting, among other measures, programmes to encourage voluntary HIV and tuberculosis testing in several of the provinces worst affected by HIV and AIDS, with a view to lowering new infections rates. Such programmes enable people to get tested and receive professional counselling without fear of being stigmatised. In addition, information is provided about HIV and AIDS and other sexually transmitted diseases and support provided for establishing HIV prevention structures, the "AIDS councils", at all levels of government. Public-private partnerships (PPPs) are providing support at workplace level in the form of programmes for HIV education and prevention, and for the treatment of those living with AIDS.

Triangular cooperation

In order to strengthen cooperation and regional de­vel­op­ment in southern Africa, Ger­many has been sup­port­ing tri­angular co­op­e­ra­tion with South Africa since 2006. This means that Germany to­gether with South Africa and another African country or pan-Afri­can insti­tu­tion, plan and im­ple­ment cross-cutting de­vel­op­ment pro­grammes in third coun­tries. One of the aims is to build up South African struc­tures for de­vel­op­ment co­op­e­ra­tion with third coun­tries. Ad­vi­sory ser­vices help to strengthen South-South co­op­e­ra­tion, that is, co­op­e­ra­tion and the crea­tion of net­works among de­vel­oping and emerging countries.