Economic inequality in SA “exp

Economic inequality in SA “exploded after end of apartheid”

The wealth of South Africa’s top 10% of the financial elite has grown by 64% in the first 17 years after the fall of apartheid, while the the poorest 10% have seen no financial growth whatsoever.

Economic inequality in SA “exp

The explosion in economic inequality in South Africa is highlighted in a report by the aid and development charity aimed at irradiating poverty, Oxfam, published ahead of the annual gathering of the world’s financial and political elite at the World Economic Forum (WEF) in Davos, Switzerland.

Oxfam says South Africa is deeply unequal with the rich getting richer and the poor poorer. Its report says in 1993, as apartheid was coming to an end, the richest 10% of the population had a combined annual income of $36 billion. By 2011 this has grown to $69 billion. In comparison the poorest 10% earned a combined income of $1 billion. In all of 17 years this did not increase at all.

The report was made public as South African President Jacob Zuma was packing his bags for Davos to endeavour to convince international investors that his country remains an attractive investment destination — and will grapple with issues such as the effect of technological change in Africa, writes The Times online.

Zuma will lead a delegation that includes seven Cabinet ministers. It wil be his first international appearance since he caused the crash of the rand by sacking finance minister Nhlanhla Nene last month and managing to replace Nene with two candidates in the space of five days. 

Meanwhile Oxmam says in 1993 3.7 million people in South Africa, which constituted the richest 10% of the population, earned $25 billion more than the poorest 50% of the population (19 million people). That meant 3.7 “mainly white people” earned four times more “than 19 million mainly black people”.

By 2011 the richest 10% (around 5 million people) had an income of $69 billion compared to the poorest 50% who had an income of $11 billion. This means “five million still mainly white people where now earning 6 times more than 25 million mainly black people”, says the Oxford based charity.

The report states that while economic growth is often seen as the solution to the problem of economic inequality, the questions should be asked what is happening with regards to growth while this explosion in inequality is continuing?

Some of the facts that needs to be considered are:

  • In 1993 the population of South Africa had a total income of $77 billion.
  • By 2011 this total income had grown to $128 billion.
  • The income of South Africa’s population had grown by 40%.
  • The income of the richest 10% had grown by 64%.
  • The income of the poorest 50% had grown by 3%.
  • The income of the poorest 10% had not grown at all.
  • A growth of 40% in the total income meant nothing for the poor.

In 2014 it was found that two men (Johan Rupert and Nicky Oppenheimer) owned the same amount of wealth as the poorest 50% of the South African population.

However, this is not a trend unique to South Africa and runaway inequality should be tackled worldwide, says Oxfam.

It says currently 62 people own as much wealth as the poorest half of the world’s population – a figure that has fallen from 388 people just five years ago.

The report An Economy for the 1% shows that the wealth of the poorest half of the world’s population has fallen by a trillion dollars since 2010, a drop of 41 %. This has occurred despite the global population increasing by around 400 million people during that period.

Meanwhile the wealth of the richest 62 has increased by more than half a trillion dollars to $1.76tr. The report also shows how women are disproportionately affected by inequality – of the current ‘62’, 53 are men and just nine are women.

“Oxfam is calling for urgent action to tackle the extreme inequality crisis which threatens to undermine the progress made in tackling poverty during the last quarter of a century. As a priority, it is calling for an end to the era of tax havens which has seen the increasing use of offshore centres by rich individuals and companies to avoid paying their fair share to society. This has denied governments valuable resources needed to tackle poverty and inequality,” reads Oxfam’s statement.