SOUTH Africa remains the most unequal society in the world 27 years after independence with 3 500 mainly white South Africans owning more wealth that 32 million poor blacks, a new study reveals.
According to the Thomas Piketty-backed World Inequality Lab, over half the population of 60 million have more liabilities than assets. The social architecture formed over more than three centuries of apartheid white rule remains intact more than and 27 years of independence haven’t even changed the wealth gap.
“There is no evidence that wealth inequality has decreased since the end of apartheid,” the group said. “Asset allocations before 1993 still continue to shape wealth inequality.”
During colonialism and structured apartheid from the late 1940s, Black South Africans were largely denied economic opportunities.
More than a quarter century of democratic rule has seen the growth of a Black middle class and a Black business and political elite.
Yet, most South Africans still suffer from a woeful education system that leaves them ill prepared for jobs, while townships, built for Blacks during apartheid, leave them far away from workplaces.
Discontent with economic prospects and an unemployment rate of more than 30% has stoked unrest in Africa’s most industrialized economy. That’s limited expansion and curtailed investment.
Attempts by the now-democratic government to wipe away the legacy of apartheid and colonialism have failed to narrow the imbalance between rich and poor, with 3,500 adults owning more than the poorest 32 million people in the country of 60 million, it said in a report released this week.
Laws ranging from affirmative action to mandating minimum Black-owned stakes in businesses have done little to narrow inequality, according to the group.
“South Africa’s successive governments endorsed several ambitious socioeconomic policy frameworks whose primary objectives consistently included reducing economic inequality inherited from colonial and apartheid regimes,” it said. “Yet, wealth inequality has remained remarkably stable.”
In South Africa, the richest 10% of the population own more than 85% of household wealth, while over half the population have more liabilities than assets, the report showed. That gap is higher than any other country for which sufficient data is available, the group added.
While Blacks have outnumbered Whites in the richest 10% of the population for about 7 years, the gap between South Africa’s richest and poorest hasn’t narrowed as the decline in racial inequality has been driven almost entirely by a surge in the top Black incomes rather than increased wealth for the poorest, according to World Inequality Lab data.
The report was based on data gathered from 1993 to 2017 and was authored by Amory Gethin of the World Inequality Lab, which is linked to the Paris School of Economics, together with Aroop Chatterjee of Johannesburg’s University of The Witwatersrand’s Southern Centre for Inequality Studies and Leo Czajka of the Universie Catholique de Louvain in Belgium. – Bloomberg ■