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Inequality in post-apartheid South Africa

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Inequality in post-apartheid South Africa

President Nelson Mandela's democratic election in 1994 marked the end of political apartheid in South Africa. [1] Under apartheid, South Africans were classified into four different races: white, black, coloured, and Indian/Asian. [2] About 80% of the South African population is classified as black, about 9% as white, 9% as coloured, and 2% as Indian/Asian. [3] Under apartheid, whites held political power, and other races were barred from voting. While the end of apartheid opened the door for equal opportunity of all South Africans regardless of race, today’s South Africa struggles to correct the inequalities created by decades of apartheid. Despite a rising GDP, poverty, unemployment, income inequality, life expectancy, land ownership, and educational achievement have worsened since the end of apartheid and the election of the African National Congress. The end of the apartheid system in South Africa left the country socio-economically divided by race. Subsequent government policies have sought to correct the imbalances through state intervention with varying success.

Nelson Mandela votes in the 1994 presidential elections, which included non-white South Africans and marked the end of apartheid

Rising economic inequality in South Africa

Many of the inequalities created and maintained by apartheid still remain in South Africa. Income inequality has worsened since the end of apartheid, but it has begun to deracialize somewhat [4] Between 1991 and 1996, the white middle class grew by 15% while the black middle class grew by 78% [5] The country has one of the most unequal income distribution patterns in the world: approximately 60% of the population earns less than R42,000 per annum (about US$7,000), whereas 2.2% of the population has an income exceeding R360,000 per annum (about US$50,000). Poverty in South Africa is still largely defined by skin color, with blacks constituting the poorest layer. Despite many ANC policies aimed at closing the poverty gap, blacks make up over 90% of the country's poor at the same time they are 79.5% of the population.[6][7]

Income distribution

A comparison of data from the 2008 National Income Dynamics Study (NIDS) and the 1993 Project for Statistics on Living Standards and Development (PSLSD) found that income inequality had increased in total and within each racial group. However, inequality between the racial groups has decreased. In 2008, the wealthiest 10% earned 58% of the total income, and the top 5% earned 43% of the total income. This is a worsened situation from 1993, when the top 5% earned 38% of the total income.[8]

A map showing severity of income inequality by country as measured by the Gini coefficient. South Africa has one of the highest levels of income inequality in the world.

Poverty levels

Under the national poverty line of $43 per month, 47% of South Africans are impoverished.[9] The number of people living on less than $1 a day has doubled from 2 million in 1994 to 4 million in 2006.[10] In 2005, 63% of black children lived in households earned less than 800 rands, compared to only 4% of white children.[4] The spatial segregation of black Africans to poor, rural areas is correlated with higher levels of poverty.[11]

Land ownership

In 2006, 70% of South Africa’s land was still owned by whites.[10] This is despite the promises of the African National Congress to redistribute 30% of the land from whites to blacks.[12] Whites hold much of South Africa’s land, secured through freehold type regimes.[13] More than one-third of the population occupies 13% of the land, often in insecure or secondary ways.[13]

Soweto township

Causes of post-apartheid inequality

Unemployment

South Africa has extremely high unemployment rates. The overall unemployment rate was 26% in 2004, but historically disadvantaged groups like rural populations, women, and blacks experience higher rates of unemployment.[14] Unemployment is mainly concentrated among unskilled blacks, who comprise 90% of the unemployed.[14][15] The ANC government has pledged to cut overall unemployment to 14% by 2014, but so far, their efforts have not caused dramatic drops in unemployment.[16] Much of the high unemployment rate is due to the declining manufacturing industry.[16] The unemployment rate for black South Africans has increased from 23% in 1991 to 48% in 2002.[17] Unemployment continues to rise despite robust economic growth, suggesting structural factors that may be constraining the labor market.[15]

Economics

President Mandela’s advisor and successor Thabo Mbeki called for privatization, government spending cuts, freer trade, and looser restrictions of money flows.[17] Modern South Africa relies on wealth and foreign investors to fuel its economy, spurring policies that favor these groups.[18] The early ANC envisioned a more socialist South Africa, but this was unpopular with businessmen, foreign politicians, and the established media.[19] For example, Mandela strongly supported nationalizing banking, mining, and monopolies, but was forced to change this goal due to pressures from stock traders and international economic entities like the World Bank.[19] The World Bank encouraged the new South African government to promote the growth of the private sector, which trickle-down economics theory proposes will create jobs that will alleviate poverty.[19]

The Growth, Employment, and Redistribution report (GEAR), prepared by the Department of Finance, the Development Bank of Southern Africa, the South Africa Reserve Bank, and representatives from the World Bank, further linked economic growth rates and social objectives. In order to create a business climate attractive for foreign investors, GEAR argued that South Africa must enact neoliberal policies.[19] GEAR recommended policies that promoted globally oriented industrial growth and called for measures such as wage moderation to encourage economic growth.[19] South Africa’s unions heavily criticized GEAR, arguing that it reinforced the economic conditions of apartheid.[19]

Solutions and policies

The Freedom Charter

In 1955, The African National Congress dispatched 50,000 volunteers into the townships and countryside to collect “freedom demands” from South Africans.[17] Freedoms included free public education for all races, living wages, land ownership, etc.[17] The demands were then compiled into the Freedom Charter.[17] The Charter was adopted on June 26, 1955 by a vote held in Kliptown, a border township between white Johannesburg and black Soweto.[17] But on the second day of the vote, the police charged the Congress with treason.[17] The Charter then circulated for three decades in the revolutionary underground and now remains a revered symbol of equality and freedom for South Africans, yet its promised economic equality has not been realized in the wake of neoliberalist state policies.[17]

Kliptown Freedom Charter Memorial

Land reform

In 1994, the newly elected African National Congress began to develop a program of land reform. This includes three primary means of reform: redistribution, restitution, and land tenure reform.[13] Redistribution aims to transfer white-owned commercial farms to black Africans.[13] Restitution involves giving compensation to land lost to whites due to apartheid, racism, and discrimination.[13] Land tenure reform strives to provide more secure access to land.[13] Several laws have been enacted to facilitate redistribution, restitution, and land tenure reform. Section 25 of the new South African Constitution, adopted in 1994, promised land reform to blacks in exchange for giving property titles to whites who acquired the property under prior regimes.[18] But while the titles were given out, the land reform was never implemented [18] The Provision of Certain Land of Settlement Act of 1996 designates land for settlement purposes and ensures financial assistance to those seeking to acquire land.[13] The Restitution of Land Rights Act of 1994 guided the implementation of restitution and gave it a legal basis.[13] The Extension of Security of Tenure Act of 1996 helps rural populations obtain stronger rights to their land and regulates the relationships between owners of rural land and those living on it.[13] So far, these land-reform measures have been semi-effective. By 1998, over 250,000 black South Africans received land as a result of the Land Redistribution Programme.[13] Very few restitution claims have been resolved.[13] In the five years after the land reform programs were instituted, only 1% of land changed hands, despite the African National Congress’s goal of 30%.[13]

The Reconstruction and Development Programme

The Reconstruction and Development Programme (RDP)was a socio-economic program aimed at addressing racial inequalities by creating business and employment opportunities for blacks.[20] However, the RDP was a short-lived policy, mainly due to protest by investors and stakeholders who did not have any voice in the creation of the RDP.[20] Critics of the RDP argue that it emphasized macro-economic stability rather than social stability.

Black Economic Empowerment (BEE)

The Broad Based Black Economic Empowerment Act of 2003 aimed to offer new economic opportunities to disadvantaged communities.[20] Its goals include achieving the Constitutional right of equality, increasing broad-based participation of blacks in the economy, protecting the common economic market, and securing equal access to government services.[20] Many scholars see BBBEE as capable of advancing economic growth, promoting new enterprises, and creating sustainable job opportunities for the previously disenfranchised.[20] Issues surrounding monitoring and enforcement are persistent obstacles to the success of BBBEE.[20] Also of note is that BEE allows the beneficiaries to come exclusively from wealthy previously disadvantaged groups. When this happens the inequality between white and black will improve but the inequality between rich and poor will get worse.

Education Reform

South Africa’s Constitution mandates that the government make education accessible to all South Africans.[21] Under apartheid, black South Africans received only Bantu Education, while white South Africans received a quality free public education.[21] Today, South Africa spends over 20% of its budget on education, more than any other sector.[21] Educational investment accounts for a full 7% of the GDP.[21] Since the ANC instituted widespread accessible education, the total number of years the average South African completes has increased.[22] The structure of the national educational system gives power to individual provinces to choose how their schools run, while maintaining a streamlined national curriculum.[21] This significant investment in education has slowly closed the educational gap between black and white South Africans. Since 1994 and the end of apartheid, black African enrollment in higher education has nearly doubled, and continues to grow faster than overall higher education growth, at about 4.4% a year.[21] Key strategies of the educational reform include offering free meals to students during the school day, providing free schools to the poorest areas, improving teacher training programs, standardizing progress assessments, and improving school infrastructure and management.[21]

However, 27% of 6th grade students are functionally illiterate.[23] However, only 4% of the wealthiest students are functionally illiterate, indicating a stark divide in literacy between income quartiles [23] The spatial segregation of apartheid continues to affect educational opportunities. Black and low-income students face geographic barriers to good schools, which are usually located in expensive neighborhoods [23] While South Africans enter higher education in increasing numbers, there is still a stark difference in the racial distribution of these students. Currently, about 58.5% of whites and 51% of Indians enter some form of higher education, compared to only 14.3% of coloureds and 12% of blacks.[21] As of 2013, the global competitiveness survey [24] ranked South Africa last out of 148 for the quality of maths and science education and 146th out of 148 for the quality of general education, behind almost all African countries despite one of the largest budgets for education on the African continent. The same report lists the biggest obstacle in doing business as an "Inadequately educated workforce". Education therefore remains one of the poorest areas of performance in post-apartheid South Africa and one of the biggest causes of continued inequality and poverty.

See also

References

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