The South African Civil Society Information Service
A nonprofit news agency promoting social justice. Seeking answers to the question: How do we make democracy work for the poor?
A nonprofit news agency promoting social justice. Seeking answers to the question: How do we make democracy work for the poor?
The first decade of democratic dispensation in South Africa was hailed in many ways as an economic success. Macroeconomic stability was restored, the country’s debt level was reduced to internationally accepted norms, and the country attained an investment-grade credit rating. Growth was high in 2005, there were capital inflows and the rand was strong at that time. As a result of these achievements, economic growth and employment were finally beginning to increase, with observers, as recently as 2007, predicting that economic growth would average five percent during the remainder of the decade.
Yet, despite these economic gains, huge disparities remain in South African society. Although there is evidence to suggest that income inequality has narrowed somewhat over the last decade, South Africa’s income inequality remains one of the highest in the world according to the World Development Report of 2006.
In South Africa, poverty and unemployment are inextricably linked. According to Statistics South Africa, the number of unemployed individuals in 2005 was considered to be over 8 million persons if you subscribe to the expanded definition of unemployment. Overall, inequality is widening as a result of the unemployment crisis.
For the period 1996 to 2006, there has actually been a slight rise in inequality in South Africa as a whole (the Gini increased from 0.60 to 0.64). Within race groups, inequalities increased among black South Africans from 0.53 to 0.64; for coloureds from 0.48 to 0.56; for Indian South Africans from 0.47 to 0.50. The only race group where inequality has declined in post apartheid South Africa is for whites - for whites the Gini declined slightly from 0.45 to 0.44.
Of greatest concern is the fact that more than a decade after the demise of apartheid, the distribution of income in South Africa is more unequal than it has ever been, despite substantial budgetary redistribution in the form of social assistance.
The key factor driving unequal income distribution under apartheid was not systematic racial discrimination, but rather the ‘growth path’, that is, the path on which the economy grew over a period of time.
There are some economists who suggest that the trajectory of inequality was on the same growth path during the apartheid years, as in post-apartheid South Africa.
Our high levels of inequality in income distribution are the result of a growth path that ensured high earnings for the owners of capital and employees with skills. At the same time, it has limited the growth of employment, generating high unemployment, and restricting opportunities for smallholder agricultural production. In South Africa, agricultural land ownership still remains highly skewed with 87 percent of farming land being owned by whites and just one percent owned by blacks.
Racist considerations informed the growth path under apartheid, but after the termination of apartheid, the same pattern continued because deracialisation produced an implicit class coalition with a vested interest in the growth path.
Historically, the overall set of public policies that shaped ‘who gets what’ can be considered as the ‘distributional regime’. This is determined by labour market policies, redistribution through the budget (through taxation and social spending), and the path and pace of economic growth determine income distribution.
Deracialisation has not transformed the distributional regime that determines how public policy shapes income distribution in South Africa.
Research has demonstrated that extreme inequality can be detrimental to economic growth, social stability and development. When opportunities are accessible to people on any other basis other than merit, the resulting economic benefits to society can potentially be lower than they would otherwise be.
Stated differently, when individuals with potential to contribute to socio-economic development are excluded from taking part, society as a whole suffers. Inequality of opportunity in the credit, financial, goods, and labour markets can lead to underinvestment and through that lower economic growth and development.
A more equitable distribution of opportunity can, in principal, result in a higher level of income and economic development. During the last decade, there has been an increasing body of empirical evidence showing that societies in which opportunities are open to a wider range of people also tend to have a higher level of development (2006 World Development Report).
In examining the history of inequality, there are two aspects of South Africa that bear consideration: the persistence of extreme levels of inequality in the distribution of income; and the existence of poor people who lack access to land, employment and skills.
Just under half of South Africa’s 47 million people are poverty-stricken with African people being the worst of. According to the United Nations Development Programme, Africans form the majority of the poor, comprising 90% of the almost 22 million poor people in South Africa.
On the occasion of his 90th birthday, Nelson Mandela’s message was:
"There are many people in South Africa who are rich and who can share those riches with those not so fortunate who have not been able to conquer poverty. Poverty has gripped our people. If you are poor, you are not likely to live long."
Mandela had good reason to use the occasion of his birthday to raise concerns about redistribution because just as good tidings have entered his life, he is well aware that he is among the fortunate few to have flourished in the new South Africa while a large proportion of others have not, as wealth and opportunity remain concentrated in the hands of a few.
Leave A Comment
Posts by unregistered readers are moderated. Posts by registered readers are published immediately. Why wait? Register now or log in!
Comments
8 Sep
Poor Political and Business Leadership
The economy is in a mess. The world is in a mess. How did we get into such a mess? We have been led here by the nose which we refused to see past. Who led us here? Our leaders of course. Why did they lead us into such a mess? Because they want to be admired, praised, fawned on and to remain in the driver’s seat as long as possible so, like doting parents in the family car, they took their darling children to Disney Land and all the nice places they wanted to go to in order to keep them happy and quiet. So we have been taken for a ride. After all, adults are only grown up children and they, too, love to live in their make believe world for as long as possible.
Politicians can see no further than the next election and, when they have conned (at huge cost) the gullible masses into voting them into power, they spend too much of their time and our resources hanging on to that power at all costs. Big Business can see no further than the next dividend, huge bonuses for themselves and maximum profits for the shareholders. This when we are desperate for leaders who can see far over the horizon and, like good parents, not afraid to take their children to places they do not wish to visit, but will benefit from doing so.
Both the politicians and captains of industry are focused on selfish and short term gains for themselves at the expense of long term stability and prosperity for all. And so we will continue to stagger from one crisis to the next, applying piece-meal expedients which merely buy time until the next crises. Is it any wonder that we are now suffering a major economic crisis after decades of mismanagement? The market is merely correcting itself and the correction will be as long and severe as the abuse that preceded it.
So we are getting precisely what we deserve for allowing our leaders to drive us to all the nice places where we can have a good time and continue to live in our make believe world, enjoying the piper playing the happy tunes, but who will, too suddenly and unexpectedly, stop the music and demand to be paid.
Over the past few years I have increasingly lost confidence in our political leaders, and think that it is time to make some very significant changes if we are to rid ourselves of the scourge of party politics, under which all countries could end up as another Zimbabwe and other failed states. It is time to consider alternative ways of making decisions that affect, not only our own lives, but future generations too.
If we can’t rid ourselves of self serving politicians entirely then I suggest that they be relegated to a mere advisory position in a panel of eminent experts in their field. For example, the environmental ministry could consist of a panel of committed and proven environmentalists to reach consensus on environmental matters, with the politician merely advising on the possible political ramifications, but whose opinion would count for no more than that of the other panel members. It would help, too, if all the panel members were grandparents with lots of lovely grandchildren whose futures would be factored into the equation.
With the modern communication technology available today, the members of, say, the Environmental portfolio could have their own private website where matters could be debated and then a vote taken. The politicians would have no choice but to implement it. This is true democracy at work, i.e. being done and being seen to be done; a great improvement to promising and lying to the gullible masses every 4 or 5 years, and then doing what the hell suit them at that time.
Politicians and big business are not serving the population. Political populism is mass hysteria and a poor indicator of a person’s real worth. It is now time to start moving into survival mode for the entire world’s population, not just for a self serving few. We have created a fat cat economy which favours the rich, who favour their own rich man’s club to the exclusion of the poor and hard pressed. We must start seeing the wealth gap steadily and progressively closing. I fear for our future if politicians and big business are allowed to continue as they have done hitherto. What kind of a world have we created for ourselves when the mentally deranged leader of Zimbabwe can cling onto power for so long while systematically bringing rack and ruin, death and destruction on the country and its hapless population, which now has the lowest life expectancy in the world?
With leaders who we can implicitly trust, and who set a fine example, we will soon learn to adapt to new, more inclusive methods of ensuring our future security and well being. We are crying out for such a change of things. But where are such leaders? Don’t put too much hope in Obama. I fear we will only get more of the same, but in different packaging from him although, I must say, he has impressed me with his business like no-nonsense approach, up to now. However, bail-outs for those who got us into this fine mess are not the answer to our woes. Do the multi-millionaire captains of industry who flew to Washington with their begging bowls, in their private jets, have no pride, or a conscience sensitive enough to question the whole morality of their self created situation? Apparently not. They still want more of the same stuff and refuse to contemplate any other remedy which may be just a little too bitter for them to swallow. Even porn merchants are now demanding government hand outs!
Nearer to home: is a polygamist who barters for his brides, as he would his other chattels, the right kind of person to lead a sophisticated nation by example? Are there enough females for every man to have 3 or more wives? Are there enough kindergartens and schools to accommodate everymans’ 20 or more children? Or must other less than equal mortals be forced to live a lonely and deprived existence in order for the fat cats of the world to enjoy more than their fair share of everything? That the moronic masses who, themselves, can see nothing immoral, or undemocratic in this, strikes fear in the hearts of all moderate and responsible citizens. With the arms deal skulduggery, Travelgate, and all the food price fixing scandals, our present leaders more resemble a Mafia than the irreproachable individuals they should be in order to serve the citizens of this country honestly.
I’m sure that I am not the only one who has lost confidence in our leaders. Surely there must be some way of ensuring that our future leaders are people of good standing, integrity and honour, and who are prepared to serve us, not for all the trappings of position, glory, self-aggrandisement and enrichment, but who are prepared to remain humble, modest, and to leave office with little more than when they entered it. If we cannot produce such leaders then what hope is there that the human situation will improve and disaster averted?
To show their strong conviction to their calling, some people take vows of poverty, chastity, and silence. I don’t expect politicians to do this, but there must be some such oath that is enforceable when errant politicians break their oath to their own calling. As it is now, they are doing what they like and getting away with it, because it all seems so “normal”.
Ernie Gay (Milnerton), PO Box 509 Milnerton, 7435. Tel: (021) 551-3155.
Respond to this comment
6 Aug
Entitlement
Income Inequality is indeed a big challenge, but the poor cannot sit back and wait for the government to give them a hand out. This sense of entitlement has to change, and entrepreneurship, like shown by our foreigner refugee friends, must be promoted.
Respond to this comment
2 Aug
Wealth Distribution
I could not agree more. The economic distribution was skewed under Apartheid in two ways. Firstly, casting racial categorisation aside, it was skwed in terms of its unequal distribution to the population as a whole. Secondly the proportion of the population on the receiving end of the distribution for the most part was white although there were other racial groups involved too.
The trouble with the ANC government's policies is they have only sought to address the second, or racial, skewing and they have done closeto nothing about the first skewing which continues to until today and which is in fact a far greater long term socioeconomic problem than the racial skewing.
What we are in need of is Socioeconomic Democracy [SD]. It is fully described in
'Socioeconomic Democracy: an advanced socioeconomic system' by Robley E george ISBN: 0-275-97376-X. SD advocates a democratically set income floor below which no member of society is allowed to fall and a democratically set wealth ceiling which nobody is allowed to exceed as any excess is just taxed away.
Respond to this comment