The rich still getting richer. And the poor?
• The benefits of investment drives to forums such as at Davos must be spread to the poor
For business and investors, political stability and policy certainty are always sought after to guarantee economic growth and safety of investments.
SA’s economic growth has for some time been taking a few knocks, including ratings downgrades and sluggish growth of below 1%. It is probably for this reason that there was so much optimism among South Africans when the team representing the country returned from Davos with investment promises.
Now that the political stalemate in the governing party has been resolved, that Davos investment promise must be revisited. SA must once again open itself to the world as a politically stable and policy certain environment.
Following SA’s performance at the 48th World Economic Forum, it is tempting to only wait in great anticipation of large capital inflows. But reality demands otherwise. The impression made at Davos was just to set the scene — it will not deliver the goods. Hard work must match the promises made.
With investors spoilt for investment destinations, South Africans all need to put their shoulders to the wheel and position the country as a destination of choice to attract the investment necessary to help improve economic growth, create much-needed jobs and ease the poverty and suffering that bedevils its millions of people.
The 2018 gathering at Davos, themed Creating a Shared Future in a Fractured World, took place following a report by Oxfam on deepening inequality levels in the world.
In the report, titled Reward Work Not Wealth, Oxfam made several startling findings.
It says that 2017 saw the biggest increase in billionaires in history, with one created every two days. Their wealth increased by $762bn in 12 months. This could have ended global extreme poverty seven times over. Oxfam said 82% of all wealth created in the past year went to the top 1%, while the bottom 50% saw no increase in wealth at all.
It said dangerous, poorly paid work for the many supports the extreme wealth of the few. Women are in the worst jobs, and almost all super-rich people in the world are men.
The Oxfam report is not the first of its kind to present such startling findings on poverty and inequality levels. A 2017 Institute for African Alternatives Confronting Inequality conference reported that millions of South Africans could not afford to buy food or access healthcare, decent sanitation and other essentials of a dignified life.
This happens while the rich in SA keep getting richer. Research shows 10% of the population owns 90%—95% of all SA’s wealth. For some time now SA’s economic growth has stagnated at less than 1%. The economy has for some time been shedding jobs across sectors.
The rand has been gaining some strength following the outcomes of the ANC’s conference in December and the good impression made by Team SA at the World Economic Forum.
The leader of that delegation, President Cyril Ramaphosa, said they were returning home with a bag full of investment promises, indicating SA is on the rise again. These are all welcome developments, necessary to take the country forward.
However, in whose material benefit and comfort is the strengthening of the rand and an improved economy? Statistics suggest that only the top 10% of the already wealthy are set for economic comfort. Something is not right with that picture.
It would be disingenuous to suggest that this 10% of the population is responsible for making the economy work and the 90% is just lazing around. Every day many of the 90% are working hard in factories to manufacture goods and products. They spend hours assembling cars they may never afford, at construction sites erecting houses and structures they may never afford to work or live in.
They work throughout the night improving road infrastructure for the ease of movement of goods and products in and out of the country. So what entitles the 10% to own between 90% and 95% of the wealth?
It is a reminder of the nearly 25,000 black South African men who left their homes to travel thousands of miles to the killing fields of France and Belgium during the First World War. They were not expected to fight the enemy — the members of the Native Labour Corps had to dig quarries, build and repair roads and railway lines, load and unload ships and cut timber.
Among the Native Labour Corps were many respected warriors and leaders who found themselves relegated to servant roles under the command of white commissioned officers.
White South Africans also went north to fight, and when they returned were rewarded with medals and land. While black recruits from neighbouring British protectorates were decorated for their contributions, the South African government decided not to award any medals to its black citizens.
About 1,300 of the black recruits never returned. Those who did make it back to SA were not given land like their white compatriots; they were given bicycles.
So as we roll out the red carpet for investors, let us remember that it will take more than the rich 10% to make the economy work and therefore the spoils must also benefit the majority who toil.
We cannot attempt to create a “shared future in a fractured world” when we live in an economically fractured country with no shared future.
STATISTICS SUGGEST THAT ONLY THE TOP 10% OF THE ALREADY WEALTHY ARE SET FOR ECONOMIC COMFORT