Trevor Manuel unveils GEAR

In a long-anticipated move the recently appointed Minister of Finance, Trevor Manuel announced the government's macro-economic strategy, called Growth, Employment and Redistribution (GEAR), which committed the government to tighter fiscal policy and the steady liberalisation of foreign exchange controls. He emphasised that the government was aiming at creating 400 000 jobs by the year 2000. In order to meet the government's goals, Manuel pledged to reduce the budget deficit from 4.5 per cent of gross domestic product (GDP) to 4.0 per cent GDP in the fiscal year 1997-98. Manuel did not envisage a minimum wage across the economy, but a series of minimums set according to appropriate standards by sector and area. The policy document received a cautious response from trade unions and local and international business. The Congress of South African Trade Unions (COSATU) welcomed the commitment to investment and the restructuring of the tax base, but expressed serious reservations over conservative fiscal policies. Sources: Kalley, J.A.; Schoeman, E. & Andor, L.E. (eds)(1999). Southern African Political History: a chronology of key political events from independence to mid-1997, Westport: Greenwood. Keesing's Record of World Events, News Digest for June 1996, P41126.