Working Paper 150 - South Africa’s Quest for Inclusive Development

The end of apartheid in 1994 ushered in a new era in South Africa and with it came the challenge of building a democratic, inclusive and stable society. The government led by the African National Congress initially followed a neoliberal stance to manage the economy and a redistributive strategy to close the income disparity with a streak of a developmental state. These two tracks were at times at odds with each other. The last decade has shown widening inequality and slow progress in addressing poverty, deprivations and other dimensions of wellbeing. Economic growth resulted in huge regional disparities and left a large middle-class vulnerable to uncertainties. In response, the government adopted an ambitious strategy called the New Growth Path that combined the goal of strong economic growth, job creation and broad economic opportunity in one coherent framework. This effort towards greater inclusion is not without challenges.