Question 1
The core elements of the Growth Employment and Redistribution (GEAR) strategy of the South African government in 1996, under the leadership of the then finance minister Trevor Manuel were amongst other things:
budget reform to strengthen the redistributive thrust of expenditure
monetary policy to prevent a resurgence of inflation
a reduction in tariffs to contain input prices and facilitate industrial restructuring, compensating partially for the exchange rate depreciation
1.1 With reference to the above, identify the macroeconomic objectives in these elements. (3 marks)
1.2 Identify and define the macroeconomic variables that can be used to measure whether the strategy was successful or not. (6 marks)
1.3 With each tool in 1.2, provide a detailed explanation on how it can be measured.
Answers
Explanation:
A competitive fast growing economy , which creates sufficient jobs for all job seekers.
Income and opportunity be redistributed for poor.
A society in which all the basic amenities available , such as education, health and other services for all
Make environment more secure and productive.
Reducing the budget deficit , reforming the tax system and reprioritizing public expenditure.
Bringing down inflation.
2. Sustained growth on a higher plain require transformation towards a competitive outward oriented economy. Several internal development are accelerated growth of non gold export and an acceleration in public sector investment. We have to reconstruct public sector to increase the efficiency of both capital expenditure and service delivery.