Macroeconomic Stability Amid Global Conflict: The Cost of Peacekeeping

Opinion Piece

Our government continually strives to achieve macroeconomic stability—a crucial factor for fostering strong economic growth and improving living conditions. This branch of economics focuses on the overall economy, addressing key issues such as growth, inflation, unemployment, and the balance of payments.

However, stability cannot be achieved in isolation from global geopolitical tensions. The risk of escalating trade disputes (such as tariff wars) and ongoing conflicts in regions like the Democratic Republic of the Congo (DRC), South Sudan, Eastern Europe, and the Middle East significantly impact South Africa. Although these conflicts occur far beyond our borders, they disrupt international trade and supply chains, drive forced migration, and artificially inflate commodity prices.

The threat posed by regional wars to economic growth must not be underestimated. In response, the 2025 Budget includes additional funding for security functions and peacekeeping commitments.

• As announced in the 2024 MTBPS, an in-year spending adjustment allocated R2.1 billion for the deployment of the South African National Defence Force (SANDF) to the DRC.

• The 2025 Budget provides a R9.4 billion top-up for the defence force and correctional services, covering rollovers and unforeseen expenses.

Some may argue that deploying troops to maintain peace in distant conflicts is a wasteful expenditure. However, it is essential to recognise that regional and international stability serve as catalysts for economic growth. Trade flourishes among peaceful nations, while conflicts divert resources toward unproductive military production—benefiting only arms manufacturers. Instead, these resources could be directed toward strengthening food and energy security, ultimately fostering a more stable and prosperous economy.