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Milk cow fit for plunder

WHILE these words were written, long queues formed at South African voting booths as people lined up to decide who would rule the country for the next five years.

Obviously, the results are not yet known, but opinion polls indicated that the African National Congress would, once again, register an easy victory. The Democratic Alliance is expected to increase its share by several percentage points while the newcomer, Julius Malema’s Economic Freedom Fighters, would make a noticeable entrance.

In fact, if the polls were accurate, the EFF would form the official opposition in several provinces.

This indicates that the problem of economic and social inequality is a burning issue in South Africa, even after 20 years of government by a party which professes to be on the side of the poor and oppressed.

While one has to concede that many poor South Africans’ lives have improved impressively since 1994, the harsh fact is that the gap between the haves and the have-nots has widened.

No wonder so many flee into the arms of the radical EFF, even though its policies, if implemented, would ruin the whole country. Malema’s simplistic slogans resonate when you have nothing and no hope.

The fact is that South Africa’s Gini coefficient – the statistical measure of inequality – has grown markedly since 1994.

Theoretically, if this coefficient is measured at 1, one person would possess all wealth and all the others nothing. At 0, there would be absolute equality of income and possessions.

In 1994, the South African Gini coefficient stood at 0.59. According to the census of 2011, it was 0.7.
Comparatively, Argentina stood at 0.45 (2010), Brazil at 0.55 (2009), Indonesia at 0.38 (2011), Germany at 0.28 (2000) and the Netherlands at 0.31 (2009).

It would seem that South Africa is very near to the bottom end.

But the problem does not end here. Among the whites, an estimated 600 000 people have descended into extreme poverty. And the inequality among the blacks themselves has increased from 0.47 in 1975 (when apartheid was alive and well) to 0.61 in 2010.

Does that matter? Believe me, it does.

When viewed from a moral point of view, there is something distasteful about obscene opulence among grinding poverty. But not everyone will share this moral point of departure, so let us look at the practical consequences for society as a whole.

Recently, the French economist Thomas Piketty published a book, Capital in the Twenty-First Century, in which he shows that inequality has been growing again since about 1980, after having been curbed earlier in the century due to the Great Depression and two world wars.

He ascribed this to the fact that people become rich by inheriting, instead of working for their money, and he proposed a heavy tax on inheritances to level the playing field.

The Economist, no friend of socialist measures of this kind, wrote of it: “As a piece of empirical sleuthing, the book is indisputably brilliant.” But, the magazine continued, his solution “smacks of socialist ideology, not scholarship”. (His critics have also accused him of beating his lover, but that is surely not relevant here.)

In South Africa, retired economics Professor Sampie Terreblanche has also put the same problem on the public table.

Whether Piketty - and Terreblanche - is right, is not the point here. The point is that even free-marketeers recognise that they have touched a raw nerve which urgently needs to be addressed.

Recently, three economists of the International Monetary Fund, Jonathan Ostry, Andrew Berg and Charalambos Tsangarides, brought out a “discussion note” in which they showed – and this summary is without their careful nuances – a correlation between equality and growth.

In other words, they say, inequality hampers economic growth.

This may be one of the factors which have brought about a disappointing growth figure for South Africa. Under the ANC government, much has been done for some of the poor, but billions have disappeared into the cracks of corruption – and one is not merely speaking of Nkandla; the whole system is wrong.

In present-day South Africa, the state is all too often not seen as an instrument for human development, but as a milk cow fit for plunder.

The result is that whatever is done for the poor, is meant primarily to buy votes and not to give them a better life.

While they still remain – in the words of the Caribbean French-speaking philosopher Frantz Fanon – the wretched of the earth, the new rich make merry, ride around in their shiny Mercedes Benzes and dine in their palatial homes. (Among them, of course, Malema himself.)

Surely the poor deserve a better chance to at least give their children a better chance in life. They do not deserve to be seen only at election time and function merely as voting cattle.

If the ANC goes on like this, the real socialist left – and I am not referring to the clownish Malema – will become a big danger to all of us.
 
 - Fin24

* Leopold Scholtz is an independent political analyst who lives in Europe. Views expressed are his own.



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