The term Bothanomics refers to the

economic reform Microeconomic reform (or often just economic reform) comprises policies directed to achieve improvements in economic efficiency, either by eliminating or reducing distortions in individual sectors of the economy or by reforming economy-wide polici ...

program announced by then-

State President of South Africa The State President of the Republic of South Africa () was the head of state of South Africa from 1961 to 1994. The office was established when the country 1960 South African republic referendum, became a republic on 31 May 1961, outside the ...

P.W. Botha during his opening address on February 5, 1988, to the

Parliament of South Africa The Parliament of the Republic of South Africa is South Africa's legislature. It is located in Cape Town; the country's legislative capital city, capital. Under the present Constitution of South Africa, the bicameralism, bicameral Parliamen ...

Cape Town Cape Town is the legislature, legislative capital city, capital of South Africa. It is the country's oldest city and the seat of the Parliament of South Africa. Cape Town is the country's List of municipalities in South Africa, second-largest ...

. The solutions proposed to the severe economic crisis that afflicted South Africa in the late 1980s included the following: * the establishment of

value-added tax A value-added tax (VAT or goods and services tax (GST), general consumption tax (GCT)) is a consumption tax that is levied on the value added at each stage of a product's production and distribution. VAT is similar to, and is often compared wi ...

to replace the general

sales tax A sales tax is a tax paid to a governing body for the sales of certain goods and services. Usually laws allow the seller to collect funds for the tax from the consumer at the point of purchase. When a tax on goods or services is paid to a govern ...

; * the centralization of

public finance Public finance refers to the monetary resources available to governments and also to the study of finance within government and role of the government in the economy. Within academic settings, public finance is a widely studied subject in man ...

; * the privatization of state-owned companies such as the Electricity Supply Commission (

Eskom Eskom Hld SOC Ltd or Eskom is a South African electricity public utility. Eskom was established in 1923 as the Electricity Supply Commission (ESCOM) (). Eskom represents South Africa in the Southern African Power Pool. The utility is the larg ...

), South African Transport Services (SAVD), Pos en Telekommunikasie ( P&T), the steel manufacturer Iron and Steel Corporation ( Yskor), and several roads; * more efficient management of government finances, reduction in government spending, and the repayment of

government debt A country's gross government debt (also called public debt or sovereign debt) is the financial liabilities of the government sector. Changes in government debt over time reflect primarily borrowing due to past government deficits. A deficit occu ...

(using the income from privatization sales); * the promotion and development of

infrastructure Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and pri ...

projects and institutions, and

small business Small businesses are types of corporations, partnerships, or sole proprietorships which have a small number of employees and/or less annual revenue than a regular-sized business or corporation. Businesses are defined as "small" in terms of being ...

es in developing areas; * deregulation in favor of black businessmen; * freezing public service wages and salaries to fight inflation; and * savings in social

welfare Welfare may refer to: Philosophy *Well-being (happiness, prosperity, or flourishing) of a person or group * Utility in utilitarianism * Value in value theory Economics * Utility, a general term for individual well-being in economics and decision ...

spending and a reduction in the standard of certain public services.

Sources

* "Botha Announces Privatisation Programme." SWB/ME/W0013/A2/2-4, 16 February 1988 * "Botha's New Economic Plan." ''Front File. Southern African Brief'', vol. 2/3 (February 1988) * Monroe, Richard: "Bothanomics: Sign of SA capitalism's bankruptcy." ''Inqaba ya basebenzi'', No. 26. Available online a
www.disa.nu.ac.za
* Weimer, Bernhard: ''Das Ende der weißen Vorherrschaft im südlichen Afrika''. Baden-Baden: Nomos, 1992. Economy of South Africa Politics of South Africa {{Econ-policy-stub