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Poor kids stuck in poverty trap

Jul 29 2012 15:28
Johannesburg - Inequalities in South Africa are threatening economic growth, with children born into poor families unlikely ever to escape poverty or reap the rewards of living in Africa's largest economy.

The World Bank's sobering assessment released last week found that a child's gender and ethnicity at birth, combined with a lack of education, largely determine that person's chances of success in life - even 18 years after the end of apartheid.

"South Africa, the continent's largest economy by far and its only G-20 member, displays strikingly high and persistent inequality and marginalisation for an upper middle-income country," said the report.

Although South Africa has made great strides in transforming the economy, which has produced one of the continent's fastest-growing black middle classes, poverty levels and unemployment remain high outside urban centres.

South Africa is often compared to Brazil, which also has a huge income gap, but while the Latin American country has narrowed the divide over the last decade, here the chasm is as deep as ever, the World Bank said.

The richest 10% of South Africans account for 58% of the nation's income, while the bottom 10% accounts for 0.5%, the Bank said. The bottom half earns less than 8% of the nation's income.

The country will struggle to grow the economy until its riches are spread more evenly, the Bank said.

Sharp economic and social inequalities were especially visible along racial lines, said the report, with whites largely shielded from economic hardships thanks to privileges inherited from the fallen apartheid regime.

"Peering past the first-world living conditions of urban South Africa, it is not too hard to see the downcast situation of townships, informal settlements, and former homelands," said Sandeep Mahajan, who headed the report.

"Our results show that a South African child not only has to work harder to overcome the disadvantages at birth due to circumstances, but having done so, finds that these reemerge when seeking employment as an adult," he said.

The report said residents of these areas were usually unemployed or lacked the means to look for jobs, as they were disconnected from the job market.

Unemployment in the first quarter of 2012 rose to 25.2%, up from 23.9% in the previous quarter, and black people form the bulk of the jobless.

Modest economic growth, which averaged 3.2% since 1995, had proved "insufficient to absorb the wave of new entrants to the labour market from dismantling apartheid's barriers", the report said.

Labour analyst Andrew Levy said challenges of inequality were "deep rooted and not unique to South Africa".

"History has shown that societies that have emerged from any kind of unjust system of governance struggle with inequality," said Levy. But he added that the new government "could have done better".

Much of the blame is laid on the education system.

The World Bank found that black children from rural areas with parents who did not finish school were most likely not to finish school or have access to health care.

Children in some parts of the country are forced to learn in open spaces or under trees, even though education is the government's single biggest expenditure.

This year education campaigners took the government to court after schools across the poor northern province of Limpopo were left without textbooks, months into the academic year. More than one month after a court order, government has not delivered books to all the schools.

"The only way to reverse the trend of inequality is to invest in education," said economist Azar Jammine.

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economic growth  |  world bank  |  poverty



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