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South Africa: an overview

South Africa is a middle-income emerging market with an abundant supply of natural resources; well-developed financial, legal, communications, energy and transport sectors; a stock exchange that is the 18th-largest in the world; and modern infrastructure that supports relatively efficient distribution of goods to major urban centres throughout the Southern African region.

At the end of 2007, South Africa began to suffer from severe energy shortages. The state electricity supplier, Eskom, faced problems with aged power plants, forcing it to introduce “load-shedding”, or cuts to electricity, for residents and businesses in the biggest cities. Growth was robust from 2004 to early 2007 as the country reaped the benefits of macroeconomic stability and a global commodities boom, but began to slow in the second half of 2007 due to the electricity crisis and the subsequent impact of the global financial crash on commodity prices and demand. GDP fell nearly 2 per cent in 2009.

Daunting problems from the apartheid era remain — especially poverty, lack of economic empowerment among disadvantaged groups and a dearth of public transportation. South Africa’s past economic policy was fiscally conservative, focusing on controlling inflation and attaining a budget surplus. The current government largely follows the same prudent lines, but has to contend with the impact of the global crisis. It also faces growing pressure from special interest groups to use state-owned enterprises to deliver basic services to low-income areas and to increase job growth.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.