This critique of South Africa's health policy opens by noting that the World Health Organization's definition of health as "a state of complete physical mental and social well-being" recognizes that health is synonymous with development. Specific areas of concern are then identified as 1) the consequences for health and development of South Africa's emphasis on reducing the budget deficit, 2) the implications of maintaining a private health sector, and 3) the absence of health policy implementation planning. The analysis opens with a look at Mozambique's experience in setting up a health service after independence (between 1976 and 1980). Next, the unique features of South Africa's transition from apartheid to democracy are identified as the rapid migration of people to industrial centers for work, the continuing residence of the powerful European population, and an international context that limits opportunities to promote growth through social democratic policies. The implications of these factors to the health policy are that social inequalities will continue to exist because the health policy fails to delineate how health services will be provided to large urban areas and maintains a two-tier system. It is critical to nationalize the public sector and to involve health workers in the reform process.