Stark inequalities expose sinister rot
HOW can one human being expect another to live off R20 an hour? This was the heart-stopping question that brought the country to a standstill during the nation-wide strike against the new national minimum wage last month.
But, in truth, the strike was just a small symptom of a much more sinister rot that continues to take hold across the globe: gross inequality. It remains strong, not just between the rich and poor, but also between those countries that form part of the developed world and those in the developing world.
Deeply concerning statistics in the World Inequality Report 2018 show that average national income inequalities are rife among countries. In sub-saharan Africa, for example, the average monthly per-adult income is about $560 (R7 000) or just 0.3 times the world average. It means that, on average, North Americans earn almost as much as 10 times more than the average person living in sub-saharan Africa. We know what needs to happen next.
It’s clear that if we want to level the playing field, developing nations must find ways of facilitating greater investment in projects, companies and organisations across the developing world.
These types of investments are instrumental to our ability to create jobs, increase access to funding for small businesses, and meet people’s basic needs in an affordable manner.
In short – it’s the only way we are truly going to be able to reduce poverty and inequality, and move beyond a place where a minimum wage of R20 an hour is celebrated as a step in the right direction. Disenfranchised
What is to be done though, when the very countries which need funding most, are least likely to access it? It’s no secret that international financial institutions are dominated by Western countries. Even prominent developing countries found among the BRICS nations (Brazil, Russia, India, China, South Africa) which together constitute about one fifth of the world economy, still represent just 11% of the votes at the International Monetary Fund (IMF).
But while growing global instability might leave us feeling powerless, the truth is that the combined power of the BRICS countries is substantial. Together we have a combined gross domestic product (GDP) of $18.5 trillion (R234 trillion).
The might of this collective powerhouse has already been brought to life through the establishment of the New Development Bank (NDB), which was founded in 2014 with a subscribed capital base of $50 billion (R633 billion) to invest in sustainable projects across the developing world. Essentially, the bank’s additional capital allows BRICS nations to fund their own infrastructure
MOSOETSA PROFESSOR SARAH
plans.
So far, so good. Three years into operation, the NDB was set to reach its target of $2.5bn (R32bn) in loan commitments.
Moving forward, the goal is to reach between $10bn (R126bn) and $15bn (R190bn) in loans by 2021.
But, though the bank provides a powerful illustration of what can be achieved when developing nations work together, it’s still painfully obvious that much, much more needs to be done.
What is exciting is that through its BRICS chairship in 2018, South Africa has the opportunity to shape the conversation around actionable next steps for the BRICS alliance.
Just this month, top scholars from across the BRICS nations are joining together at the 10th BRICS Academic Forum to propose actionable solutions to pressing socio-economic challenges.
And the thread running through all these conversations will be how, together, we can begin levelling the playing field between developing countries and their first-world counterparts.
The more weight we can throw behind finding resolutions to global equality, the faster we can get there. The National Institute for the Humanities and Social Sciences (NIHSS) is custodian of the South African BRICS Think Tank (SABTT) which will host the 10th Academic Forum.