Inequality in South Africa: Nature, Causes and Responses

Will hosting the Soccer World Cup in 2010 contribute towards eliminating inequality in South Africa? Many people are punting the idea that it will, while others are sceptical, maintaining that, in the long term, it is only the already wealthy business owners who will benefit.

Inequality is one of South Africa’s major problems. It is not only a South African problem though….. the world is beset by tensions arising from inequality as the privileges, resources and assets or valuables enjoyed by some are not enjoyed by all. Resources, assets and valuables are often distributed according to race, class, gender, religion or culture and thus conflict arises. Inequality, actual or perceived is one of the greatest motivating forces in politics. Equality can’t be found outside the world of mathematics and is an ideal. When people speak about equality it is relative rather than absolute equality that is being referred to.

“The South African Development Report 2003”, recently published by the UNDP, states that “ About 48.5 percent of the South African population (21.9million people) currently falls below the national poverty line. Income distribution remains highly unequal and has deteriorated in recent years…………………….Poverty and inequality continue to exhibit strong spatial and racial biases”. Forces that have engendered poverty and inequality include “a highly skewed distribution of wealth, extremely steep earning inequality, weak access to basic services by the poor, unemployment and underemployment, low economic growth rates and the weakening employment generation capacity of the current growth path, environmental degradation, HIV/AIDS and an inadequate social security system.”

Social Science Researchers who delve into the problem of inequality have variously stated that the growth rate of the economy does not positively impact on unemployment because our economy, in line with globalisation, is becoming more and more capital intensive. In addition, there is a negative correlation between education and unemployment, the wealthiest 10% of society are wealthier than they were pre 1994 and in many poor rural families up to 81% of the family income is spent on food.

President Thabo Mbeki has, on a number of occasions argued that South Africa is a country with two nations and two economies. He has said,

“material conditions…. Have divided our country into two nations, the one black, the other white………(the latter) is relatively prosperous and has ready access to a developed economic, physical, educational, communication and other infrastructure………..The second, and larger nation of South Africa is black and poor, [and] lives under conditions of a grossly underdeveloped infrastructure………..

Neither are we becoming one nation…….Unlike the German people [after unification in 1990] we have not made the extra effort to generate the material resources we have to invest to change the condition of the black poor more rapidly than is possible if we depend solely on severely limited public funds, whose volume is governed by the need to maintain certain macroeconomic balances and the impact of a growing economy” (Mbeki 1998)

The issue of dualism of nation and economy are major issues for South Africa as we move into the next decade of our democracy. Are there two poles of the one economy and two poles of one nation as some have argued or are we different economies and different nations? If the former is true, how do we integrate the two economies and two nations and render them more equitable? If the latter is true, how do we live in harmony with one another without engendering the obvious, ultimate conflict which will emerge as a result of inequality.

Stephen Gelb, who has researched and published a report for DFID with regards to the Policy Initiative on Addressing Inequality in Middle Income countries, argues inter alia that “the democratic transition in1994, emerged from a two-decade crisis during which economic and social changes occurred which shaped both the form of the transition through negotiations as well as post-apartheid policy and institutions which resulted from an accommodation between the ANC and business.”

Leslie Liddell
National Cordinator
Harold Wolpe Memorial Trust  

Prof. Stephen Gelb, Executive Director of the Edge Institute, will be addressing some of these issues and questions at the next Harold Wolpe Memorial Trust Cape Town Forum meeting which will be held on Wednesday, 19 May 2004, 6 for 6.30pm at the Centre for the Book, 62 Queen Victoria Street, Cape Town. If you wish to attend, please confirm your attendance by calling 021 686 9312.