2nd Economy Strategy Project

The purpose of this project is to contribute to reducing poverty and inequality in South Africa by supporting the government to develop a Strategy for the Second Economy, as part of its Accelerated Shared Growth Initiative of South Africa (Asgi-SA), located in the Presidency. Asgi-SA’s target is to halve poverty and unemployment in SA by 2014. However, the Asgi-SA March 2007 Annual Report raises concern that without a more concerted focus on employment creation, the South African economy may still fall short of between one and two million jobs on current trends – even if growth targets are met. Halving poverty also requires an increased focus on sustainable livelihoods for the chronically poor.

The strategy for the second economy is tasked with finding ways to enhance existing policy and programmes, as well as identifying, developing and designing additional initiatives to ensure these targets are met. The Second Economy Strategy project has been developed by Trade & Industrial Policy Strategies at the request of the Presidency. TIPS project manages the implementation of the project, while the Presidency provides policy oversight for the project.

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Call for Proposals: Understanding Inequality: Promoting Equity

The Second Economy Strategy Project requests proposals for research that deepens our understanding of inequality, its impact on poverty and the policy options to reduce it. Read more...

The Community Work Programme

What is the Second Economy?

The term ‘second economy’ entered policy debate following its use in a ‘Letter from the President’ by Thabo Mbeki in August 2003, in which it was used to describe some of the features of inequality and structural poverty that characterise South Africa. While the concept attracted its share of criticism, it has served its purpose in drawing attention to the policy challenge of continued inequality, persistent poverty and the marginalisation of sectors of the poor.

The debate that followed has helped to deepen analysis of the complex set of continuities and discontinuities, connections and disconnections, dependencies and interdependencies that link wealth and poverty together in South Africa’s economy, and how these are also influenced by their interaction with wider global dynamics. Such analysis is key to developing and strengthening the policy instruments and programmes that government is able to use to address these complex challenges.

The term ‘second economy’ is therefore to be understood broadly. It is a form of metaphor rather than a precise term, intended to focus policy attention on the issues of inequality and poverty that characterise the disadvantaged side of the wealth/poverty equation in South Africa, in order to develop solutions.