The most un­equal coun­try on earth

Finweek English Edition - - Finweekcontents -

SOUTH AFRICA has over­taken Brazil as the coun­try with the widest gap be­tween rich and poor, Uni­ver­sity of Cape Town eco­nomics Pro­fes­sor Ha­roon Bho­rat told Par­lia­ment. “In the long run it’s bad for growth. It’s a threat to so­cial sta­bil­ity and to growth it­self. The long-run trend is a wor­ry­ing one,” warned Bho­rat, who drew his con­clu­sions from Statis­tics SA’s in­come and ex­pen­di­ture sur­vey. Those con­firm SA’s Gini-co­ef­fi­cient in­dex – which shows the level of in­come in­equal­ity – stands at 0,679. A Gini-co­ef­fi­cient above 0,5 is con­sid­ered un­ac­cept­ably high.

Bho­rat’s key con­cern is SA’s long pe­riod of growth meant it could sus­tain a swelling so­cial se­cu­rity bill. But the re­ces­sion has changed that. We’re now fac­ing a much higher deficit and un­likely to be able to main­tain those pay­ments, he says.

Gov­ern­ment isn’t too wor­ried. While its 2009

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