The Impact of Globalization on the Health Sector in South Africa

3319 Words Apr 14th, 2008 14 Pages
The Impact of Globalization on the Health Sector in South Africa

After the Apartheid era, massive inequalities in income, health status, access to health care and other social services continued to dominate in South Africa. The Apartheid era was a system of racial segregation that was implemented in South Africa from 1948 to 1994. Due to colonization, whites had ruled South Africa for several centuries, which resulted in the creation of a system that was constructed to serve as a legal framework for continued economic and political dominance by people of European descent (WHO 2003: Antiretroviral Therapy). The apartheid era came to an end as a consequence of both inner and global pressure and South Africa’s new democratic government.
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Globalization will also be understood as the “opening and deregulation of economic activities- the removal of tariff barriers to trade, of restrictions on investment and capital flows” (Mayor, Nell 4). It is first important to understand the different domestic actors on the health sector in South Africa in order to comprehend how the health care system operates and how globalization plays a pivotal role in the actions of these actors.
There are three distinct actors that have direct economic and political influence in regards to health in South Africa. The first actor that will be examined is the National Treasury. The National Treasury is responsible for setting the macroeconomic agenda and controlling the government budget. In 1996, the ministry introduced the GEAR (Growth Employment and Redistribution) policy. GEAR is the promotion of business confidence and it is aimed to catalyze foreign investment. GEAR imposes constraints on the resources flowing into the health sector because it requires the public expenditure growth to be lower than overall economic growth in order to show fiscal competence. Fiscal competence will, in turn, generate more foreign investment because other countries will perceive South Africa as an efficient and effective economy that will be able to generate capital. Thus, the government’s macroeconomic strategy is…