Issue Ten- March 2009 - Electoral Economics in the eye of a global storm

South Africa’s economic policy landscape has experienced one global financial crisis before. It emanated from Asia in the early 1990s, uncomfortably coinciding with our country’s transition to democracy at a time when a new administration had to win the hearts and minds, and confidence, of the global economy and international investors. The response to this crisis, the fiscal austerity of the Growth, Employment and Redistribution Strategy (GEAR) adopted by the South African government in 1996, was, and remains, a controversial policy response. It caused significant strain within the tripartite alliance, despite there clearly being very little domestic policy room amid a deepening crisis that engulfed all emerging markets and confronted a new government with no economic-policy track record with immediate and complex questions.