Inequality may derail our democratic stability

The most persistent and grotesque characteristic of apartheid South Africa was the creation and maintenance of inequality premised on the superiority of one race over another. For well over three hundred years its policy focus and decisions were directed at reinforcing and sustaining the status quo with a view to ensuring that equal opportunity was denied to the majority of black people.

The focus of the black struggle for change was therefore driven by the vision that called for the dismantling and restructuring of the political economic system and substituting it with a system that was premised on equal rights for all, and fair and equal opportunity to realise one’s dreams in a constitutional democracy.

The first and most significant step in this transformation trajectory was the successful negotiation and conclusion of our widely admired constitution. The holding of our peaceful and successful elections in 1994 was a powerful statement by all South Africans for a desire to protect and sustain a peaceful transition. In effect, the transition marked the reality that the power to decide on the future direction of the country was now vested in a democratically elected government and our electoral system also ensured that all minority groups had a fair opportunity for making their voices heard.

With this act, the political aspect of our political economic restructuring agenda was achieved. The political power dynamics were changed forever in line with our constitutional aspirations. However, it was clear that this was only a small step in a long process that required that we build solid democratic institutions to buttress our young and fledgling democracy. We have done reasonably well in this regard and in reconstructing and building an independent judicial system and vigorous institutions in the past 20 years.

A major challenge and an outstanding question is how we engage on a broad and deep manner on the question of how to resolve the question of reducing the persistent wealth inequality that defines our country.

The future stability of our country will depend on how we resolve this structural weakness. This is an issue that has preoccupied governments since the formation of nation states, and responsible governments have always come with policy interventions that are aimed at protecting the poor and creating a fair and equitable environment for the pursuit of individual enterprise. The apartheid regime was concerned with protecting the interests of a racially defined minority.

We have done extremely well in terms of developing and implementing policies that were designed to improve the lot of the poor. But we have done very little or nothing to fundamentally address the reality of unfair accumulation of wealth by a racially defined minority group under apartheid. The challenge of finding a broadly acceptable formula for redress and redistribution will remain the most critical and illusive challenge of our democratic transition.

Nothing in the Labour Relations Act of 1995, the Employment Equity Act of 1998 or the contemplated revisions to the Black Economic Empowerment Act will deliver the desired outcomes. The reality is that the constellation of economic and political power relationships that was the key driver to the racially defined political elite in the apartheid era has been replicated since the beginning of our democratic dispensation in 1994.

What has happened is that inequality has grown consistently in the past 20 years, achieving for us the inglorious distinction of being the most unequal nation in the world, powered by the effect and outcome of our black economic empowerment policies and programmes that have tended to benefit the narrow interests of the politically connected. The largest gains in terms of wealth accumulation in the democratic dispensation have accrued to those that benefitted from unfair protection under apartheid and now also include the black and politically connected elite. This situation is unsustainable and undesirable for the stability of a democracy as young as ours.