Sep 14, 2012
Activist, ethical State needed to address SA’s inequality problem – NetshitenzheBack
Johannesburg|Africa|Education|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 News This Week News
Recent Research Reports
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,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
This Week's Magazine
Energy analyst and EE Publishers MD Chris Yelland warned recently against excessive optimism regarding timescales for the proposed construction of new nuclear power plants (NPPs) in South Africa. He was speaking at a Nuclear Roundtable in Johannesburg. “I think we...
Malawi’s Lilongwe Water Board (LWB) is inviting eligible bidders to prequalify for the board’s efficiency improvement works, which will be implemented as part of the E24-million Lilongwe Water Resources Efficiency Programme. LWB CEO Alfonso Chikuni explains that...
CROATIA, AN EU MEMBER BUT NOT A TDCA MEMBER On July 1, 2013, Croatia officially became the twenty-eighth member of the European Union (EU). Despite Croatia’s accession into the EU, it is yet to become party to the Trade, Development and Cooperation Agreement (TDCA)...
The Council for Scientific and Industrial Research (CSIR) has announced that its new Inundu airborne electronics testing, evaluation and training pod had made its first test flight on September 10. The successful flight was undertaken from Lanseria International...
The Development Bank of Southern Africa (DBSA) – which disbursed a record R13-billion during 2015, from R12.7-billion in the prior year – remained optimistic that it could ramp-up loan disbursements to R25-billion a year by 2018 as it sought to give greater emphasis...