Inequalities threaten SA’S growth

INEQUALITIES in SA are threatening economic growth, with children born into poor families unlikely to escape poverty or reap the rewards of

living in Africa’s largest economy.

INEQUALITIES in SA are threatening economic growth, with children born into poor families unlikely to ever escape poverty or reap the rewards of living in Africa’s largest economy.

A sobering assessment by the World Bank, released last week, found that a child’s gender and ethnicity, combined with a lack of education, largely determine that person’s chances of success in life — even now, 18 years after the end of apartheid.

“SA displays strikingly high and persistent inequality and marginalisation for an upper middle-income country,” said the World Bank report.

Although SA has made great strides in transforming the economy, which has produced one of the continent’s fastest-growing black middle classes, poverty levels and unemployment remain high outside urban centres.

SA is often compared to Brazil, which also has a big income gap, but while the Latin American country has narrowed the divide over the past decade, here the chasm is as deep as ever, the World Bank said.

The richest 10% of South Africans account for 58% of the country’s income, while the bottom 10% account for 0,5%, the World Bank said.

The bottom half earn less than 8% of the country’s income. The country would struggle to grow the economy until its riches were spread more evenly, the World Bank said.

Labour analyst Andrew Levy said that the challenges of inequality were “deep rooted and not unique to SA”.

“History has shown that societies that have emerged from any kind of unjust system of governance struggle with inequality,” Mr Levy said. But he added that the new government “could have done better”.

Much of the blame is laid on the education system. The World Bank found that black children from rural areas with parents who did not finish school were most likely not to finish school or to have access to healthcare.

“The only way to reverse the trend of inequality is to invest in education,” economist Azar Jammine said.