The Economic System of South Africa - 1043 Words

What type of economic system does this country have? Explain some of the benefits of this system to the country and some of the drawbacks. South Africa’s economic is mainly based on free market principles. However, as in most developed economies, competition is controlled by government intervention. Therefore, South Africa has a mixed economy in which there is a variety of private freedom, combined with centralized economic planning and government regulation. ADVANTAGES: †¢ Various restrictions on businesses are made for the greater good. For instance, the Competition Act of 1998; along the lines of the best international practices; provides for various prohibitions on anti-competitive conduct and restrictive practices such as price fixing even predatory pricing. †¢ Both private and public sectors work side by side. The combined efforts lead to rapid economic development. The private sector’s goal is to make profit. For every dollar in revenue it earns, there is a tax that goes directly to some level of government. The public sector can then afford to continue providing its services to the people. Additionally citizens also pay taxes through either goods or services from the private sector or public sector. †¢ With international allegiances and international trade; imports and exports; it increases or expands opportunities for South African participation in world markets, while recognizing the role of foreign competition within South Africa. †¢ Mixed economies have a highShow MoreRelatedThe Four Main Economic Systems and Their Application in South Africa1426 Words   |  6 PagesIntroduction An economic system is a manner of approach which is used at solving the three main questions which are: What goods and services should be produced and the amount? How much of the scarce resource should be utilised and how will the goods and services will produced? 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