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The reason for South Africa's economic inequality being closely linked to racial divisions is due to historic systems of racial hierarchy. The system of Apartheid that existed in South Africa prior to 1994 concentrated power in the hand of the white minority who used this power to deny economic opportunity to the black majority.
In South Africa, this idea is known as the first (capitalist, high-profit industries) and second (underdeveloped) economies. [6] The first economy contributes to the majority of South Africa's wealth and is integrated within the world economy. The second economy consists of low-skilled and outdated jobs.
The energy crisis has significantly limited economic growth in South Africa thereby preventing the country from resolving high rates of unemployment. [ 27 ] [ 125 ] The power shortage is estimated to have reduced economic growth in 2021 by 3% thereby costing the country an estimated 350,000 potential new jobs for that year alone. [ 27 ]
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Even so, the committee found allies in the West, such as the British-based Anti-Apartheid Movement, through which it could work and lay the ground roots for the eventual acceptance by the Western powers of the need to impose economic sanctions on South Africa to pressure for political changes. [2
South Africa relations are quite strong, as the ruling parties in both nations – the African National Congress in South Africa and the MPLA in Angola – fought together during the Angolan Civil War and South African Border War. They fought against UNITA rebels, based in Angola, and the apartheid-era government in South Africa who supported them.
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In the 1980s, both the Reagan and Thatcher administrations in the US and UK followed a 'constructive engagement' policy with the apartheid government, vetoing the imposition of UN economic sanctions on South Africa, as they both fiercely believed in free trade and saw South Africa as a bastion against Marxist forces in Southern Africa.