South Africa and inequality

For the sake of all that’s sensible, can we stop reporting that South Africa has the greatest level of inequality in the world?

It has become South Africa’s biggest cliché, and it crops up in many stories written about the country, even one as balanced as the New York Times take on the Soccer World Cup.

“South Africa, with a population of 49 million, has the continent’s largest economy, which would demand bigger bragging rights if the wealth — by the measure of some researchers — was not the most unequally distributed in the world.” Really?

Actually, a bit of research would show that South Africa is not the most unequal country in the world.

Inequality of income is usually measured by the famous Gini coefficient (for one explanation of how it is calculated go here).

Using the Gini coefficient, 1 is complete inequality, where one person owns everything, and 0 is complete equality, where everyone earns exactly the same amount. The figure is sometimes expressed as a percentage instead of a fraction, e.g. Norway has a Gini figure of 25,8% rather than 0,258.

The important point is that, using the Gini measure, South Africa’s income inequality is stratospheric — of those countries that are measured. A number of countries don’t have a measure attached to them.

South Africa does not, however, according to the UNDP, have the highest Gini coefficient figure.

South Africa’s Gini, according to this measure, is 57,8%. Namibia’s is the highest, at 74,3%.

But more than that, does the Gini really measure the huge differences between rich and poor in a country?

Take nearby Angola, where by some accounts the ruling party has siphoned off most of that country’s billions of dollars in oil revenue leaving the population in poverty, and wonder how it is possible that South African can be more unequal.

I look across the border at Zimbabwe, where my fellow unfortunate Africans have an unemployment rate reckoned at more than 50%, while the ruling despot’s family can jet around the world to shop in foreign places, and I wonder whether Zimbabwe is really a more equal place than South Africa.

None of this means that inequality is unimportant. Far from it. The arguments for a more equal society are impeccable, from an economic, political and above all a moral standpoint.

The contrast between poverty and wealth in South Africa often reminds me of Dickens’ accounts of Victorian England.

Yet a temporary increase in inequality may be unavoidable if South Africa sees a change from mediocre rates of growth to much faster rates of the sort seen by countries in the Far East.

In any case, overstating the problem hardly helps.