Question1 [30]

Write an essay on unemployment in South Africa {or any other country of your choice in the developing world} in which you cover the following issues:

1. The major reasons forhighunemployment. (10)
2. The possible "shape and feel" of the world of work in 10years'time. (10)
3. Policy proposals to significantlyreduceunemployment. (10)

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Question2 [70]

The excerpts below are taken from/ allude to the 2020 Budget Speech (Feb 2020). Answer the accompanying questions after carefully reading the excerpts.

Question 2.a

Read the excerpt below before answering the following questions.

Explainwhyeconomicgrowthwasdisappointinglylowbeforedemocracyin1994.Then,describe the main drivers of economic growth from 1995 to2009. Finally, explain why the country has recorded a decade of weak economic performance (with more of the same expected over thenextfew years). (25)

The minister's introductory words

Before democracy our growth was pedestrian. Indeed, between 1990 and 1992, the economy contractedforthreeyearsinarow....Inthefifteenyearsfollowingdemocracy,economicgrowth averaged3.6percentayear.Thegrossdebt-to-GDPratiodeclinedfrom46percentto26per cent. In the five years from 2003 to 2008, growth averaged around 5 per cent, and South Africawasamongstthefastest-growingmajoreconomies.Theunemploymentrateimprovedby 5percentagepoints.Now,....adecadeofweakeconomicperformance.Againstthisbackdrop weforecastthattheSouthAfrican economywillgrowby0.9percentand inflationwillaverage

4.5 per cent in 2020.

Question 2.b

Read the excerpt below before answering the following questions:

Is the implied fiscal policy stance, in your opinion, appropriate? Justify your answer. Now provide

a summary of the "far-reaching reforms" which, in your opinion are required to achieve fastereconomicgrowth. (25)

Budget summary

\fI The 2020 Budget proposes total consolidated spending of R195 trillion in 2020/21, with the largest allocations going to learning and culture (R396.4 billion), health (R229.7 billion) and social development (R3095 billion). I The economic outlook is weak. Real GDP is expected to grow at 0.9 per cent in 2020, 1.3 per cent in 2021 and 1.6 per cent in 2022. Achieving faster economic growth requires farreaching structural reforms. I The public finances continue to deteriorate. Low growth has led to a R633 billion downward revision to estimates of tax revenue in 2019/20 relative to the 2019 Budget. Debt is not projected to stabilise over the medium term, and debt-service costs now absorb 15.2 per cent of main budget revenue. I Halting the fiscal deterioration requires a combination of continued spending restraint, faster economic growth, and measures to contain financial demands from distressed state-owned companies. I As a first step, the 2020 Budget makes net noninterest spending reductions of R156.1 billion in total over the next three years, compared with last year's budget projections. This includes large reductions to the publicservice wage bill