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Vol 51 No 5

Published 5th March 2010

South Africa

Tightening the welfare belt

A centrist budget annoys the people who got the President elected and leaves some economic questions unanswered

South Africa is now the biggest welfare state in the developing world and the implications for public finances are frightening. As the recession tapers off, the rising public debt is set to peak in 2013 at an overwhelming 40%. Economists such as Iraj Abedian, Chief Executive of Pan-African Advisory Services in South Africa, argue that a government faced with a fiscal crisis cannot afford to commit the largest portion of its budget to public spending, such as social grants.

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