Sep 14, 2012
Activist, ethical State needed to address SA’s inequality problem – NetshitenzheBack
Johannesburg|Africa|Education|Efficiency|System|Africa|South Africa|Services|Joel Netshitenzhe
© Reuse this
Addressing attendees at the memorial colloquium of the assassination of writer and activist Ruth First, in Johannesburg, last month, Mapungubwe Institute executive director Joel Netshitenzhe stressed that, while high rates of economic growth, coupled with lower unemployment levels, may reduce absolute poverty, it would not impact on the lasting challenge of inequality.
“South Africa represents extreme manifestations of inequality, which are far more prevalent and systematic than in other States. This reality, coupled with the historical racial and class features of our society, makes it a highly complex issue,” he said.
Netshitenzhe said that interracial inequality had decreased during the first decade of South Africa’s democracy, as black South Africans were able to break through the glass ceiling of apartheid.
However, intragroup inequality within the black community increased in parallel, as only a fraction of its members were able to exploit the new opportunities.
Moreover, once the base effects of democracy had manifested during the first decade, interracial inequality widened from 2004 to 2009 during a period of high economic growth.
“This was a direct result of the rich being better positioned to take advantage of a burgeoning economic sector than the poor,” he noted.
While Netshitenzhe accepted that higher rates of economic growth and increased labour absorption mechanisms, as encouraged in the developmental State model, would reduce absolute poverty, he believed that an activist State, as an instrument of redistribution, was required to reduce relative poverty, or inequality levels.
He said that this approach would include the absorption of marginalised groups into economic activity, the provision of free and good- quality education as well as dedicated skills development efforts.
In addition, South Africa would be required to institute free or subsidised high-quality public services for the poor, place restrictions on executive remuneration packages to boost the distribution of wealth and implement a minimum wage policy and inflation limit.
“Progressive taxation would also go some way towards addressing inequality, but for this system to retain legitimacy, the efficiency and ethical conduct of the State, particularly in the administration of the higher income brackets, are paramount,” he pointed out.
He added that measures to address spatial settlement patterns in relation to areas of high economic activity were also required.
Netshitenzhe said that dealing with inequality entailed a reversal of South Africa’s ‘trickle up’ economy, in which the perpetuation of vastly divided socioeconomic classes was observed, and cited a recent statistic in support of this statement.
“Twenty per cent of the poorest citizens of this country earn only 2.3% of the national income, while 20% of the richest earn 70% of the national income,” he concluded.
Edited by: Martin Zhuwakinyu© Reuse this Comment Guidelines (150 word limit)
Creamer Media Senior Deputy Editor
Other Economy News
Recent Research Reports
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
This Week's Magazine
The BMW Group will invest R6-billion at BMW Group South Africa’s (BMW SA’s) Rosslyn plant to produce the next-generation X3 sports-activity vehicle (SAV) for the local and export markets. Rosslyn will continue production of the current 3 Series through its lifecycle,...
The lack of consequences for poor performance and transgressions on the part of contractors remains a significant hurdle to tackling South Africa’s service delivery challenges, delegates heard at the Consulting Engineers South Africa Infrastructure Indaba, on...
City of Ekurhuleni executive mayor Mondli Gungubele earlier this month officially named the city’s bus rapid transit (BRT) system, Harambee.
About 58% of unstructured data stored by companies is dark data, which means that the value or regulatory importance of the data has not been determined. Subsequently, most of the stored data add costs, rather than increasing revenue or reduce regulatory risks, says...
Effective logistics, import/export and manufacturing consulting services require detailed industry knowledge and experience, but can add significant value to these industries by providing expert advice on various technical elements in their value chains, says...