THE magnitude of the problem of inequality in SA, compounded by the painful reality of unemployment and poverty, will hobble future development prospects unless we seriously debate the efficacy and appropriateness of our policy responses.
The truth about our inequality is that it has not arisen because of some abstract market forces but is a social construct and outcome of a deliberate and legislated racial discrimination policy during apartheid.
It was clear in the minds of the National Party (NP) leadership during the latter part of the apartheid era that a transition to a new political order, in line with the vision of the liberation movement, was inevitable and that political power would be in the hands of the black majority.
But they were prepared to push this eventuality as far into the future as possible.
However, a confluence of global political changes, beginning with the collapse of the Soviet Union and the reordering of the global balance of power, accelerated the demise of the apartheid regime.
Few options were available to the NP leadership, and the need to preserve the lifestyles and wealth accumulation gained and enjoyed during apartheid dominated their mind-set and approach as it became clear that transition negotiations were inevitable.
It is important to recall that the rationale for apartheid was to enforce preservation of opportunities for wealth accumulation and development on a racial basis for the sole interests of white people and to the exclusion of the black majority population.
The post-apartheid reality is that political power relations have changed dramatically, but the undeserved wealth accumulated by whites under the apartheid system remains untouched. In fact, for many, the value of wealth that was accumulated has been rapidly increased by the global opportunities brought about by the democratic SA.
Big business has been the primary beneficiary of the growth opportunities brought about by our democratic dispensation. Ironically, it was also the primary beneficiary of apartheid’s cheap-labour system.
On the other hand, the economic power relations that rendered apartheid unfair and unjust have continued in the democratic SA. The undeserved poverty and inequality suffered by the black majority continues to exist and, in fact, they have increased on a number of measures. We are now the most unequal society in the world as a result of the policy decisions we made after the transition.
The following perspective by former African National Congress (ANC) minister Ronnie Kasrils is instructive: "All means to eradicate poverty, which was (Nelson) Mandela’s and the ANC’s sworn promise to the ‘poorest of the poor’, were lost in the process. Nationalisation of the mines and heights of the economy as envisaged by the Freedom Charter was abandoned. The ANC accepted responsibility for a vast apartheid-era debt, which should have been cancelled. A wealth tax on the super-rich to fund developmental projects was set aside, and domestic and international corporations, enriched by apartheid, were excused from any financial reparations. Extremely tight budgetary obligations were instituted that would tie the hands of any future governments; obligations to implement a free-trade policy and abolish all forms of tariff protection in keeping with neoliberal free-trade fundamentals were accepted. Big corporations were allowed to shift their main listings abroad."
Writing in 2008, the ANC’s Ben Turok underscored the magnitude of the challenge: "The ANC inherited a strong market economy, whose acceptance was part of the negotiated settlement. However, a market economy is not designed for the equitable sharing of national resources. It always favours the strong, and in SA that means the entrenched and still overwhelmingly white economic power bloc."
Several surveys have shown that our society has become more polarised along class lines that reflect the continued narrow class interests of the overwhelmingly white economic power bloc and political elites. A deconstruction of the motives of service delivery protests and other negative social phenomena points to growing signs of revolt by the poor. This must be worrying. Wits University vice-chancellor Adam Habib has warned: "Inequalities polarise societies, and it is hard to imagine SA sustainably addressing its social pathologies — violent crime, the abuse of women and children, racial tension — or even HIV and AIDS and the service delivery crises without a sustained reduction in both inequality and poverty."
The debate about inequality raises the following questions: did the liberation alliance have a transition strategy going into the negotiations that matched the avowed mission of the "social democratic revolution"? What were the critical elements of this purported "revolution" and what benchmarks were set for evaluating its progress? If our constitutional democracy and electoral system represent the reversal of political power relations, what benchmarks were set in the transition strategy to achieve "corrective justice" in economic power relations? The temptation to cite black economic empowerment as a shining example would be patently false as it was designed to benefit a few politically connected people and fails the basic test of "corrective justice", which would require some form of wealth alienation on the part of those who were selectively favoured by the apartheid system.
What we have done well is to put in place an extensive social welfare network in order to mitigate the effects of poverty.
But we have not thought of a radical approach to deal with the question of wealth inequality and lack of opportunity. The question I continue to battle with is: is it possible to say that comprehensive democracy has been achieved if the economic power relations that existed during apartheid remain intact? Further, is it possible to address the question of wealth inequality without considering wealth transfer from the rich to the poor in one form or another?
What is sadly lacking is a credible effort by big business to come up with a strategy and plan, entirely conceived and driven by the private sector, to build what I may call "a bridge of goodwill" multibillion-rand fund with the sole purpose of funding social development projects that will directly benefit the poor. As a magnanimous gesture by those selectively advantaged by apartheid, it may serve as acknowledgement that, first, the system was unjust and, second, that some form of reparation or redress is morally justifiable. It may also serve to manage the growing unrest and strengthen efforts towards social cohesion and nation-building.
But wealth transfer by itself will not be the silver bullet that solves inequality, unemployment and poverty.
What is urgently necessary is a comprehensive dialogue by all stakeholders about an appropriate and shared growth path and strategy. Such a growth strategy must focus on, and include, the following key elements: quality education for all, especially the poor; antimonopoly policies that are aggressively implemented; steeply progressive taxation that may include a development tax on the rich; labour market reforms to promote employment of low-skilled people; and a strong social safety net. These issues will require visionary leadership by all sides and they have been avoided for too long.
• Motsohi is a strategy consultant at Lenomo Strategic Advisory Services.
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