In his article, Patrick McGroarty focuses on economic difficulties faced by South Africa; in particular, the author speaks about unemployment, failure to finance the developmental project, corruption, or increasing debt of the state.
This article is important because it can be related to the questions discussed in the course. For instance, one can mention poverty or fiscal traps, government failures, and significant cultural differences. The problems that the writer examines are faced by many developing countries. This is why this article can be of some interest to people study economics.
First, Patrick McGroarty speaks about the attempts of the government to impose road tolls. The fees that the drivers were supposed to pay could raise capital for many public needs; however, this initial was strongly objected by many people (McGroarty, unpaged). For example, the owners of many small businesses argued that such a policy could be disastrous for them since their operating costs could increase dramatically (McGroarty unpaged).
This example illustrates both poverty and fiscal traps. This means that the government cannot levy funds that can later contribute to economic improvement. Such a situation is typical of many developing countries, and they still struggle to overcome such problems. The main issue is that this country cannot explore new sources of income because its citizens cannot afford to invest.
Furthermore, this article shows that government failures are an important factor that contributes to economic instability. Patrick McGroarty refers to the problem of corruption and improper use of the funds; according to this article, approximately 25,255 cases of public fraud were detected (McGroarty unpaged). This scale of corruption is a critical factor that prevents South Africa from achieving long-term prosperity.
This argument can be applied to many other countries in Africa or Europe. Thus, one can say that Patrick McGroarty identified some of the most important problems that policy-makers have to resolve. Without addressing the problem of corruption, South Africa is not likely to reach any success. Corruption and government failure will undermine every project that the government will initiate.
Finally, the author shows that cultural differences may also play an important role in the economic life of a country. One should take into account that the South-African economy has long been shaped by the policies of the apartheid (McGroarty unpaged). Long-term economic isolation of black people contributed to long-term poverty in the country.
Current failures of the government to reorganize the economy can be partly explained by the legacies of the Apartheid. Overall, it is possible to say that this racial and discriminatory policy of the South-African government represents a divisive experience that prevents white and black people from working with one another. Hence, cultural differences should not be overlooked by economists and public administrators.
Overall, this article, written by Patrick McGroarty highlights the most important obstacles that developing countries have to overcome if they want to become economically sustainable. Government failures, fiscal or poverty traps, and cultural differences are the main barriers to the progress in this region.
The thing is that the problems described by Patrick McGroarty can be found in many other African countries. Certainly, every country has its distinct economic history and one cannot too many generalizations; yet South Africa is not the only nation that has to wrestle with corruption, fiscal traps, and divisive cultural past.
Works Cited
McGroarty, Patrick. “A Lack of Jobs Levies Pain on South Africa.” The Wall Street Journal. 2012.