South Africa in the 21 st Century: Some Key Socio-Economic Challenges Pundy Pillay 1. Introduction This paper provides a review of six key socio-economic challenges that face South Africa at the dawn of the 21 st century. The paper is largely descriptive with its main purpose being to present the issues as objectively as possible with the focus being on how things have changed especially during the period of the first democratic government. No attempt is made here at providing policy prescriptions. Rather it is hoped that the information gathered can be the basis for informed discussion as well as providing the impetus for progress towards greater consensus in economic policy making. From the perspective of government, the achievements of the past six years have been not inconsiderable especially in the areas of education, housing, health, water and sanitation, macro-economic policy and in establishing a new decentralized political framework. The recent NEDLAC report(NEDLAC 2000) has highlighted many of these achievements. However, the greatest achievement of the first democratic government has been probably in the arena of policy development. Nevertheless, huge challenges remain as government moves the emphasis from policy development to policy implementation and the delivery of services. The analysis of the key socio-economic challenges facing the country should be considered within the context of the many encouraging signs emanating from government. Foremost amongst these are the following • Government is clearly prepared to acknowledge that some mistakes have been made in policy development and implementation; note for instance, the M inister of Trade and Industry’s recent comments on government’s lack of success in small business development and M inister of Education’s review of Curriculum 2005; • There is now increased focus on development and implementation of co­ordinated, cross-cutting policies – e.g. on employment, spatial planning, rural development, human resource development, and crime – rather than focusing narrowly on departmental policy-making; • In line with these objectives there has been a radical restructuring of the important decision-making structures, namely in the Cabinet Committees, and the Forum of Directors-General, to encourage co-ordinated policy-making; • There is increasingly an emphasis on prioritisation through a cycle of policy planning and budgeting; • Finally, there is increasing evidence of willingness to engage in partnerships in the implementation of policy, with civil society(especially in the social sector – e.g. education, social welfare, rural development); and with the business sector (privatization, crime, infrastructure). 2