South Africa is a country of academic interest partly because until the April 1994 transformation, it was the only remaining country where state institutions were designed explicitly to secure the advantage of one racial group at the expense of other racial groups. It is worthwhile to note, however, that not much has changed since the 1994 transition to democracy. The reasons why the country’s inequality gap continues to widen under a black majority government have not been entirely clear. This is what this short essay intends to discuss. For instance we know that there are differences in income and earnings, but it has been difficult to know precisely the extent to which this variation reflects racial differences, educational attainment and occupational status.
For about a decade now, the ruling African National Congress (ANC) promised to abolish discrimination and improve opportunities for poor non-white South Africans in all facets of social, economic, and political life, but these are yet to come to fruition. It is worthwhile to note that in a debate on the report of the country’s Truth and Reconciliation Commission (TRC) in 1998, Mr. Thabo Mbeki, the deputy President at the time, contended that, “material conditions… have divided our country into two nations, the one black, and other white (the latter) is relatively prosperous and has ready access to a developed economic, physical, educational, communication and other infrastructure…. The second and largely, nation of South Africa is black and poor, (and) lives under conditions of a grossly underdeveloped infrastructure… 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…”(Mbeki, 1998). It is therefore worthwhile to examine the nature of the divide Mbeki is alluding to and the reasons for the government’s limited response to such inequalities in the post Apartheid phase of the country’s history. In short, this essay provides an overview of inequality and poverty in South Africa.
THE POST-APARTHEID ERA
For many non-whites South African, the April 1994 transition to democratic transition meant that, for the first time, the poor have the same formal political power as the rich. The ANC, which won 62 % of the total votes in the 1994 elections, was the party of those previously marginalized in the political and economic systems. Thus, given the racial and class composition of its support base, many commentators assumed that the ANC would be under pressure to redistribute national resources along racial lines. It is worthwhile to note that in 1994, the government of national unity under the ANC presented its five key human development priorities: employment, housing, education, nutrition, and health. These development priorities, however, are far from being realized. The expectations that the country would move onto a path of equalizing growth remain unfulfilled
The reason why South Africa’s political transition offered an excellent opportunity for sustainable redistributive change is not difficult to discern. The interest of the poor has been clearly defined to cover curbing unemployment and access to services that would help narrow the gap between the poor blacks and rich whites. In addition, the transition was one of those moments of social fluidity that facilitated unusually wide participation in economic and social debates.
Since the election of South Africa’s first democratic government, to be sure, some gains have been made, but the country still has a long way to go in overcoming Apartheid’s legacy. Poverty is still widespread, income disparities, lack of access to healthcare among other services continue to complicate efforts to expand opportunities to the non-white population. Both Nelson Mandela and Thabo Mbeki who led the post-Apartheid governments have been criticized for their apparent inability to fulfill their promises of creating opportunities for South Africa’s non-White population. Some observers have challenged this view insisting that the country’s observed racial differences in occupational status and income inequalities, for instance, reflect racial differences in human capital. This latter response, however, ignore the institutional and extra-institutional arrangements that have resulted in differences in human capital.
Most attempts to explain the ANC’s failure to redistribute national resources have rather focused on the inadequacies of the political leadership. Indeed, for some, the leadership’s lack of commitment to a progressive outcome led them to “sell out” and focus on accumulating power and wealth, while for others, the problems results from the ANC leadership’s inability to hold together an effective political coalition and impose progressive policies on reluctant democrats in the white and business communities (Bond, 2002).
In particular, it is noteworthy that the nature of the distribution of economic and political power in South Africa at the time of the transition, and the structural problems (crisis) which confronted the country’s economy a couple of decades before the transition appear more potent in explaining the ANC’s reluctance in redistributing the country’s wealth. As Gelb (2003:29) succinctly puts it, “the transition was not a tabula rasa in which all options were equally likely or possible… instead, certain political and economic imperatives ruled out some options and weighed social choice towards others”.
Thus, one could locate the inability of the post-Apartheid government to resolve problems of unemployment, poverty, and inequality to the legacy of the pre-transition era, particularly the economic crisis of the 1970s. In the 1970s, South Africa like many other countries in the world experienced the first and second oil crises which triggered a global recession. These structural constraints were worsened by several spontaneous wage strikes in response to rising inflation in the South Africa. The cumulative effects of both the oil crises and the subsequent labor agitations imposed pressure on the country’s economy. In addition, the country’s precarious economic condition was worsened by severe capital flight, particularly following labor and students unrests in the 1970s (Gelb, 2003).
There is no doubt that these crises meant that huge businesses became more powerful as ownership was concentrated, and the acceptance of its property right had to be guaranteed by the state. In the context of negotiated transition, this meant that capital reform would require the consent and participation of big businesses. The negotiated nature of the transition meant that capital reform would necessarily be an incremental, market-based process accommodating the incoming ANC government and the existing owners of huge capital. Undoubtedly, the ANC’s promise of redistribution was a mere reflection of the enthusiasm of the 1994 elections, but it gave the non-white South Africans a glimpse of hope that the ruling African National Congress was determined to narrow the gap between racial groups.
The government’s failure resulted in a wane in enthusiasm among South Africans, which reflected in low voter turnouts in subsequent elections.
Indeed, in 1999, South African voters had their first opportunity to hold the ANC government to account for its performance since 1994. Although the ANC’s share of the votes rose slightly, the voter turnout fell dramatically. The reason for the ANC’s electoral successes is simple: although the black majority government fails to deliver on its promises of development, the majority of South Africa’s black voters do not seem to have found alternative candidates or parties to replace the ANC (Nattrasi and Seekings, 2001).
RACE AND INCOME INEQUALITIES
South Africa has four major racial groups: whites, Asians, colored, and blacks. These racial groups differ substantially in socio-economic attributes, particularly income earnings. The country’s social structure comprises three groups. At the top, with incomes well above the average, is the upper-class.
This class includes individuals with internationally transferable assets and skills. It earns about 45% of total income in the county. The upper-class is mostly white. It is in this respect that race has the greatest salience. Below them is a group with incomes ranging around the median up to the above public sector employees, and some workers in the formal privet service sector. The middle class holds 41% of the total income. At the bottom comprises predominantly household that either have no working members, or are in the most marginal sectors of the working-class (Nattrasi and Seekings, 2001).
Although income disparities have narrowed somewhat in the post-Apartheid era, South Africa’s income distribution is still among the most unequal in the world. Given this inequality, one is not surprised why many observers have suggested the implementation of redistributive policies. Overall, income inequality has not narrowed significantly since the ANC replaced the Apartheid regime. No wonder Natrassi and Seekings (2001) assert that, the ANCs’ adoption of orthodox economic reforms has led many to conclude that the government had betrayed its revolutionary commitment. South Africa is an upper-middle income country, but is a county of stark contrasts. The country’s extreme inequality has led to destitution, hunger, and over crowding living side-by-side with affluence (Woodlard, 2002). Poverty is multifaceted and can be linked to hunger, unemployment, exploitation, and lack of access to basic infrastructural facilities.
The ANC government is in a position to influence income redistribution in three ways: through taxation and transfer, through policies affecting human capital, and through institutional interventions that would affect the growth patterns in the economy. Taxation and spending are important in redistribution, but in highly unequal societies such as South Africa, policies affecting human capital and the pattern and role of growth are of potentially far greater importance.
The important income divisions are along the lines of skills, authority, and education, just to mention a few. Because the ANC government made concessions to the old order in order to end apartheid, the transitional agreement allowed whites to keep such privileges and assets as land, mines, plants, and banks. This has exacerbated the income inequalities. Between 1995 and 2000, for instance, average black household income fell by 19% (R 3,714) white household income rose 15% (22,600).
The poorest South African just earned 9.7% of national income in 2000, down from 11.4 % in 1995. The richest 20% earned 65% of all incomes in South Africa (Crankshaw, 1997).
Woodlard (2002) reminds us that living standards closely correlate with race in South Africa. Indeed, while poverty is not confined to anyone racial group, it is concentrated among blacks, who constitute 78% of the population and account for 95% of the poor. Indeed, while urban whites in the Western Cape enjoy a standard of living comparable to most developed countries, rural Africans living in the Northern Province enjoy a standard of living common in countries that are far less developed than South Africa.
It is equally noteworthy that poverty and unemployment are linked. Unemployment rate among those from poor households is about 52%, in comparison with an overall rate of 29%. The poor populations are concentrated in former homeland, which are made up of almost entirely non-white territories such as Bophuthatswana (Northwest), Ciskei and Transkei (East Cape), Kwazulu Natal province, and Limpopo Province (Woodlard, 2002).
Similarly, there are significant disparities between the urban and rural areas in South Africa. In rural areas, 62% of the population is poor compared with 13% in the urban metropolis, and 25% in secondary cities. These disparities are found in the country’s nine provinces. Out of the nine provinces, only West Cape, Guateng, and the Northern Cape did not have former “bantustan” areas incorporated within its territory. The Northern Cape has a significant share of rural colored people whose living conditions are as deplorable as those of the “bantustans” (Gelb, 2003).
For Woodlard (2002), one should trace the country’s enduring poverty and income disparities to the segregation and discrimination of past regimes. The massive investments in state education for white children in the 1950 and 60s resulted in white workers securing the skills that enabled to continue to command high incomes without the need for policies job reservations. Restrictive past economic practices prevented much of the population from vertical mobility within the labor market leading to skewed income distribution which in turn is exacerbated by an unequal distribution of skills and training.
In the literature on discrimination, there are at least to main explanations for wage and earning differences across groups of equally qualified individuals. The first explanation suggests that individuals, be they producers or employees within a firm have taste for discrimination. The output of groups targeted for discrimination is often valued less than that of the favored group. Consequently, the group that is discriminated against is offered less than marginal product, and the favored group is given an income that is not only commensurate, but also correspondingly greater than marginal product. The other explanation for the differences in earnings rests on theories of labor-market segmentation. Labor-market segmentation theory argues that members of group-A establish labor or product-market dominance relative to group B-members in order to limit inter-group competition (Sherer, 2000).
In general, black Africans are moving into traditionally white occupations at the bottom of the skill and income hierarchy. Although African have are still almost completely excluded from managerial and professional jobs, there has been substantial African advancement into routine white-collar and semi-professional and trade skills. Africans are concentrated in occupations associated with Nursing and Teaching. In the skills trade, Africans are concentrated in construction, furniture, goldsmiths etc. Thus, despite substantial upward mobility of Africans into these traditionally white-collar jobs, there is still a wage and job hierarchy exists within occupational groups (Crankshaw, 1997).
The reason for African advancement in Nursing and Teaching are to be found in the government’s policy of racially segregated health and education facilities. Under pressure to provide basic health care for the expanding urban black population, the state was obliged to expand the employment of nurses. The state pursued a policy of expanding training for black nurses, specifically for employment in black facilities (to occupy black hospitals.). Similarly, under pressure to alleviate the shortage of whites in routine white-collar jobs, the government expanded education for blacks. The result was the dramatic expansion of the training and employment of black school teachers. Thus, in both the Apartheid and post-Apartheid eras, the color bar caused a skill shortage by reserving highly skilled jobs for whites. By the 1980s when it became apparent that there was a shortage of qualified individuals to fill jobs, the government then opened up these occupations to blacks, but subordinated them to their white counterparts (Crankshaw, 1997).
CRIME AND INEQUALITY
Crime is among the most difficult of the many challenges facing South Africa in the post-Apartheid era. The country’s crime rates are among the highest in the world. A variety of theories suggest that higher income inequality is associated with crime. Although political violence has reduced considerably, the high level of poverty, unemployment, combined with easy access to firearms have contributed greatly to an upsurge in crimes and other forms of social conflicts in South Africa (Harsch, 2001).
The fear of crime therefore is often easily manipulated by law enforcement agencies as justification for use of deadly force against South Africa’s poor population, particularly non-whites. Police brutality and deadly force is largely expended more on the control of these underprivileged groups because they are regarded the ‘pathologically criminal class”. Thus, police brutality reflects the elites’ fear of the poor. Urban centers have become economic giants and serve as magnets for the poor from rural provinces in the country.
Demombynes and Ozler (2002) have examined the relationship between local inequality in property and violent in South Africa. They confirmed economic theories that link inequality to crime and also sociological findings that imply that inequality leads to crime in general. Indeed, several theories have been advanced to link South Africa’s rising crime rates with poverty and income inequalities. This essay selects three of such theories. First, the level of crime is greater in communities with higher inequalities. This does not necessarily imply that inequality per se causes crime but rather that inequality may capture the incentives for criminal activities. Second, lack of opportunities for upward mobility has been linked to the prevalence of crime in South Africa. Individuals who perceive their poverty as permanent may be driven by hostile impulses rather than rational pursuit of their interests. When a society or system of cultural values emphasizes, virtually above all else, certain common symbols of success for the population at large while its social structure vigorously restricts or completely eliminates access to approved modes of acquiring these symbols for a considerable part of the same population, that criminal activities like to rise (Demombynes and Ozler, 2002). The absence of opportunity for upward mobility in South Africa combined with the country’s high premium on economic affluence results in falling value standards. Thirdly, crime many also be partially determined by the wealth disparities between neighborhoods. Where the neighborhoods differ in income levels and assets, crimes are more likely to occur in the richest neighborhoods. To be sure, sometimes crimes may occur in the poorer areas if the cost of committing such crimes is high in the rich neighborhoods are high due to transport, information, security, among other factors.
Many policy makers in South Africa have blamed the changes in access to socioeconomic amenities to the enormity of the problems inherited from the apartheid regimes. To the country’s litany of outstanding problems such as unemployment, access to education, poor housing, among others, has been added a new one: lack of access to health care. Since the colonization of South Africa, a selective restriction of economic, political, and social rights and subsequent segregation of health facilities has exposed the country’s black population to severe health risks. To be sure, in 1996, negative discrimination was officially taken out of the new South African Constitution and Health Care became a fundamental right. However, the principle of legal equality enshrined in the new constitution has not translated in equal access in health care (Fournier, 2004).
Poverty has been linked to mortality and morbidity. The poor have difficulties in accessing health care because they do not have the most basic income for transport, food, and clothing. Woodlard (2002) reveals that 54% of every 1000 rural African infant dies before age 1, compared with 39 out of 1000 urban African infants and 11 White infants. Similarly, under-five child mortality in black communities is 81 per 1000 compared to 13 for the white community. Thus, racial and economic segregation still has significant discriminatory impact on under-five mortality. Racial inequality seems to be a strong determinant not only of income ad education, but also of access to health facilities and opportunities for medical treatment. This unequal access to health care continues to impose huge burden of diseases among the black population.
South Africa has one of the highest per capita HIV prevalence and infections rates in the world. The country’s HIV prevalence rate for adults is about 25%. The data on HIV prevalence reveal that the overall prevalence rate in the population is around 11%. Among Africans, then figure was 13% while 6.2% for whites, 6.1% for colored, and 1.6 % for the Asian population. The data therefore suggests that although all the racial groups are at risk, black South Africans face a higher risk due to poverty and lack of access to adequate health attention. Blacks infected with HIV are also far less able to cope with the loss of earnings and rising medical bills (Gelb, 2003).
The government of ANC promised to provide equal opportunity for education to all racial groups and regions. However, there are wide variations in major indicators of educational quality across different. Given the clustered spatial distribution of racial groups in South Africa, it is easy to infer variations among classes. One can argue that the government’s failure to strengthen its support for black schools via budget and personnel contributes to a vicious cycle of poverty and low quality education. The Learner-Educator ratio shows that opportunities in public schools are still unequal between blacks and whites children in South Africa (Yamauchi, 2005).
The government has failed to meet its promise of narrowing the gap. Formerly white public schools continue to keep their superior position by increasing school tuition and other fees to shut out the entry of black children. Thus, access to public education is still unequal between blacks and whites. These trends continue to result in persistent inequality in labor markets and earning opportunities in the country. Black children who do not receive sufficiently high quality education are more likely to earn low wages, potentially contributing to long-term poverty trap.
Policy-makers in post-Apartheid South Africa continue to insist that public policies have become color-blind and in some cases, “affirmative action” programs have been instituted in favor of blacks. This essay has been an attempt to debunk this assertion by arguing that South Africa continues to be an inequitable society. The nature of the distribution of economic and political power in South Africa at the time of the transition, and the structural problems (crisis) which confronted the country’s economy during the “dark” years of the 1970s could possibly explain the ANC’s reluctance in redistributing the country’s wealth. The effects of these structural constraints ruled out some options and weighed social choice towards others.
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Crankshaw, Owen. Race, Class and the Changing Division of Labor Under Apartheid. New York: Routledge (1997).
Demombynes, Gabriel and Berk Ozler. Crime and Local Inequality in South Africa. Policy Research Paper (2002).
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Sherer, George. “Intergroup Economic Inequality in South Africa: The Post Apartheid Era” The American Economic Review, Vol. 90.2 (2000), 317-321.
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Woodlard, Ingrid. An Overview of Poverty and Inequality in South Africa DFID Working Paper (Jul. 2002).
Yamauchi, Futoshi. “Race, Equity and Public Schools in Post-Apartheid South Africa: Equal Opportunity for All Kids” Economics of Education Review, 24.2 (2005).
MSc. Defence and International Politics
Ghana Armed Forces Command and Staff College
Otu Barracks, Accra