As President Jacob Zuma of South Africa prepared to go to the World Economic Forum (WEF) in Davos, Switzerland, Oxfam, an aid and development charity aimed at eradicating poverty, released its report on economic inequality in South Africa. The report revealed some startling numbers that show that economic inequality in South Africa actually increased after the end of apartheid in 1994.
The South African reported Oxfam’s findings that showed that in 1993, as apartheid was ending, the richest 10 percent of South Africans possessed a combined income of $36 billion. In 2011, the same group had a combined income of $69 billion while the poorest 10 percent of South Africans had a combined income of $1 billion. During that 17-year period, income for the poorest 10 percent didn’t increase at all.
— SA by numbers (@SAbynumbers) June 16, 2015
Oxfam also reported that in 1993, 3.7 million people, which constituted the richest 10 percent of the population, earned 25 billion dollars more than the bottom 50 percent of the population, the poorest, which constituted about 19 million people. The report called for action to change the income inequality not just in South Africa but worldwide.
“Oxfam is calling for urgent action to tackle the extreme inequality crisis which threatens to undermine the progress made in tackling poverty during the last quarter of a century. As a priority, it is calling for an end to the era of tax havens which has seen the increasing use of offshore centres by rich individuals and companies to avoid paying their fair share to society. This has denied governments valuable resources needed to tackle poverty and inequality.”
As previously reported in Inquisitr, one of the problems with the economy in South Africa right now is that whites are currently excluded from the job market because of Black Economic Empowerment (BEE). BEE was designed to level the economic playing field in South Africa after apartheid ended and give black South Africans more economic opportunity. Instead of creating more economic opportunities for black South Africans, it has created an atmosphere in South Africa where workers are hired based solely on race and not on qualifications. It is a policy that has set many up for failure.
— Voyt (@Voytk) August 26, 2015
South Africa is expected to have a bleak economy in 2016 and 2017, further compounding the situation for those who are currently unemployed. Because President Jacob Zuma has often been seen as part of the problem in South Africa by his nonchalant attitude towards the economy, he hasn’t help matters by sacking the finance minister Nhlanhla Nene and replacing him with ANC back-bencher David van Rooyen. South Africa currently suffers from a bloated civil service, crushing labor laws, too many state-owned businesses, and property rights that are too often undermined. The social policies of President Zuma and the ANC-controlled government have created a hostile environment for economic growth.
Rather than focusing on ways to increase the growth of the economy and end income inequality, the African National Congress (ANC) is calling for more wealth redistribution as a way to address the economic inequality in South Africa. The Times Live reported that ANC Secretary General Gwede Mantashe said that the ANC had reaffirmed its commitment to using wealth redistribution as both a moral and economic imperative.
For those who understand how wealth redistribution works, it’s basically where the government takes money from those who have earned it and gives it to those who haven’t through the use of social welfare programs. Currently, South Africa has a tax base of approximately one million taxpayers and a population of approximately 53 million people. Of those, around 16 million receive social welfare grants each year. With such a small tax base and such a large welfare population, the government can only take so much money in order to end economic inequality.
So what do you think is the answer to economic inequality in South Africa? Do you see a lack of personal responsibility here on the part of those who accept grants from the government? Are taxpayers being penalized for being successful?
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