The Social Economy and Role of Government in South Africa

The Social Economy and Role of Government in South Africa

O. E. Okeke-Uzodike (University of KwaZulu-Natal, South Africa) and Mogie Subban (University of KwaZulu-Natal, South Africa)
DOI: 10.4018/978-1-4666-8748-6.ch013
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Social economy, as a relatively new concept, is considered the ‘third sector' of the economy in government discourse. It plays significant roles in socio-economic and political spheres of any nation. Emphasis on social economy has been as a result of the global recession which caused economic depression in several countries all over the world. In South Africa, the impact of the economic recession has reflected mostly in increased unemployment and poverty levels resulting in maximization of discrepancies between the rich and poor with inequalities, creating disenabling environments for foreign investments. These social problems have called for an examination of the role of the social economy in liberating the South African economy from its current dire state. This chapter on tracing the developmental agenda of the South African government, will examine how the social economy has fed into the National Development Plan and the impact of implementation of government policies and regulatory frameworks to ensure achievement of various national imperatives aligned to the Millennium Development Goals in the context of the social economy. The authors state that whilst there is a growing trend towards the social economy in the current context of government, multi-faceted effects of poverty needs to be targeted through robust entrepreneurial opportunities for growth and development of the economy.
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2. Overview Of Social Economy

The social economy is considered a ‘third sector’ amongst economies operating between the private (business) and public sectors (government). Historically, literature have linked social economy to associations and co-operatives structured to respond to the living conditions of the most vulnerable and defenceless social groups. In support of this movement, the International Labour Organisation’s (ILO) recently adopted a Declaration of Social Justice for a Fair Globalisation which underpins the need for effective social economy and envisions placing people at the centre of the economic policy of government. Given this background, ILO defined social economy as “a concept designating enterprises and organizations, in particular cooperatives, mutual benefit societies, associations, foundations and social enterprises, which has the specific feature of producing goods, services and knowledge while pursuing both economic and social aims and fostering solidarity” (ILO, 2009, p.1). Another contemporary definition of the social economy comes from Mook et al.,(2007, p.17), “A bridging concept for organizations that have social objectives central to their mission and their practice, and either have explicit economic objectives or generate some economic value through the services they provide and purchases they undertake”. The aim of social economy from both definitions is that it is based on democratic values and is not profit-driven. The concept of the social economy is influenced by the philosophy of ensuring social ethics and morality--solidarity, equality, liberty and social responsibility particularly for the vulnerable groups within society.

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