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Publication Details

Devey, Richard & Skinner, Caroline & Valodia, Imraan (2006) Second Best? Trends and Linkages in the Informal Economy in South Africa. Centre for Civil Society  Colloquium on the Economy, Society and Nature: 1-21.


In August 2003, President Mbeki introduced the idea of South Africa being characterised by a ‘first economy’ and a ‘second economy’ operating side by side. In November, in an address to the National Council of Provinces he stated:

The second economy (or the marginalised economy) is characterised by underdevelopment, contributes little to GDP, contains a big percentage of our population, incorporates the poorest of our rural and urban poor, is structurally disconnected from both the first and the global economy and is incapable of self generated growth and development.

This idea of a ‘second economy’ is increasingly part of policy rhetoric at all levels of state. For example, the KwaZulu-Natal Minister for Finance and Economic Development, Dr Zweli Mkhize began his 2005 budget speech with a description of the economy using the analogy of an apartheid era train with the first economy occupying the first class compartments and the second economy being the second and third class sections. Having made substantial reference to the notion throughout the speech he argues that interventions in the second economy are ‘even more crucial’ than projects aimed at stimulating growth in the first economy.

In his 2004 State of the Nation Speech, President Mbeki argues that the:

…core of our response to all these challenges is the struggle against poverty and underdevelopment, which rests on three pillars. These are: encouraging the growth and development of the first economy, increasing its possibility to create jobs; implementing our programme to address the challenges of the second economy; and, building a social security net to meet the objective of poverty alleviation.

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 Relevant Publications
 The Accumulation of Capital. Chapter 27: THE STRUGGLE AGAINST NATURAL ECONOMY: Rosa Luxemburg 
 Capitalism & cheap labour power in South Africa: Harold Wolpe 
 Labour Market Discrimination and its Aftermath in Southern Africa Guy Mhone 

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