Lee-Roy Chetty
Lee-Roy Chetty

Why South Africa needs a second transition

What kind of country do we want to live in? Despite the achievements we have made as a young democracy, the persistence of widespread poverty and extreme levels of inequality remain a major threat to social cohesion and nation-building. But how do we effectively and realistically reduce inequality and eliminate poverty?

In a recent United Nations Development Report, South Africa ranked 123rd out of 187 countries in the UN Human Development Index for 2011. The index tracks variables such as life expectancy at birth, average years of schooling, expected years of schooling and income per person. In addition, based on data from the Income and Expenditure Survey, our country’s Gini coefficient is rated at 0.67. This is incredibly high based on global standards. Gini coefficients provide an indication of the level at which income is equally or unequally distributed throughout a population. A Gini coefficient of 1 is an indication of complete income inequality with one person having all the income, while a Gini coefficient of 0 is indicative of complete equality with everybody earning an equal income.

Post 1994, income levels of the richest and the poorest 20 percent of our population both rose by about 45 percent between 1995 and 2005, with the poorest 20 percent of our population earning approximately 2.3 percent of the national income, while the richest 20 percent earned 70 percent of the income. In addition, the portion of Africans in the top 20 percent of income earners increased from 39 percent in 1995 to 48 percent in 2009, resulting in further inequality within the African population increasing exponentially.

But more starkly, there continues to be a chasm based on average income by race group. The majority of low income households are black. In 1995, median per capita expenditure amongst Africans was R333 a month compared to whites at R3443 a month. By 2008, median expenditure per capita for Africans was R454 a month contrasted to that of whites at R5668 a month. Based on this data and with almost two decades of emancipation, it is clear our country remains a highly unequal one.

But surely we all want to live in a country where no one goes hungry. Where anyone can go to school and study beyond that if they so wish. A country where work is available and everyone feels like they are making a contribution. A Republic where each one of our citizens is given what they need to live the lives they dream of. Do we not owe this to ourselves and the next generation of South Africans?

In order to achieve our country’s social and economic objectives set out in our Constitution, and demanded by all our people, we need to make faster progress. The incumbent national government has always defined the enemy in terms of a system of domination and not of a people or race. The shared goal culminated in the creation of a national democratic society which promotes a united, non-racial, non-sexist, democratic and prosperous South Africa. But we’re currently falling short of that vision.

The first transition within South Africa’s new dispensation focused specifically on political democratisation. As we approach 2014, and 20 years of democracy, a second transition for the Republic is required. This will entail a social and economic vision for our country over the next 30 years.

The negotiated nature of South Africa’s first transition resulted in a number of concessions being entered into. This included that capital reform would be an incremental and market-focused process engaging with the then owners of capital. It resulted in the first democratically elected ruling government having to enter into an implicit bargaining agreement committing to stringent macro-economic stability and international openness. In return, entrenched traditional capital and business had to agree to readily participate in capital reform to modify the racial structure of asset ownership as well as invest in national priorities.

But since the inception of our new democracy, economic performance has been mixed. Our economy has grown at approximately 3.3 percent year on year between 1995 and 2010. This following almost 20 years of stagnation. However, widespread poverty and extreme inequality persist. South Africa is considered an upper middle-income country based on the average national income per person or GDP per capita. But this is misleading and hides the extreme inequality in income and access to opportunity for many of our citizens. Deep levels of poverty is still prevalent, as well as limitations to human development and economic progress for the majority of our citizens.

Incremental growth in per capita incomes is one explanation for such extreme poverty levels. GDP per capita has noticeably improved from 2001 to 2008. However, the acceleration of economic growth is not yet sufficiently high or sustained enough to make a telling and meaningful impact after many years of population growth, economic stagnation and the crippling affect of the apartheid planning legacy.

Almost two decades on, South Africa finds itself on the cusp of its own tryst with destiny, where the task ahead for government and society will include the ending of poverty, disease and inequality of opportunity. But awareness without action changes nothing.

This is the zeitgeist within which the ANC approaches its 53rd national policy conference taking place at the end of June. The purpose of the conference will take place within the context of a paradigm shift in the approach towards issues of economic development in our country. The leadership of the ruling party has gone on record to say that political emancipation without economic transformation is meaningless. In other words, that symbols of freedom are no longer enough, that substance is required, that there can be no agency without structure.

Among the policies which will be discussed are economic transformation, state intervention in the mineral sector, issues of social transformation, land reform, education, healthcare, justice, gender issues, legislature and governance, peace and stability as well as international relations.

Our country needs to make significant progress if we are to truly be an inclusive and just society as envisaged in our Constitution. But it is clear that there needs to a sharpening of the debate. The sweeping sentiment and fear of nationalisation which has been hijacked and distorted by individuals in recent times must be replaced with a rationalisation. There must be a common recognition of the fact that all of us stand to gain from the transformation of South Africa. Both leaders and citizens must commit to building a better future based on sound ethical values, mutual sacrifice and planning.

It should not be about creating a climate of fear, but rather attempting to win hearts and minds across the political and racial spectrum, and coming to the realisation that our individual stories may be singular but our destiny is shared. Surely that’s the kind of country we should all want to live in?

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