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South Africa – winners and losers

18 June 2010

The arrival of the World Cup to South Africa is a tribute to that country’s transformation since Apartheid ended in the early 1990s. It’s now a thriving emerging market–the “S” in the BRICS–and participates in the G20 and OECD work too.

But behind this success story lies a troubling and persistent problem – poverty. Based on the national definition of poverty – $4 a day – more than half of South Africans (54%) are poor. And, as the chart below shows, poverty and inequality still reflect race. While the African community’s access to services such as housing, water and electricity has improved substantially, its income continues to lag far behind other social groups. By international standards, this link between race and poverty is remarkably strong. Nor have there been too many signs of this link weakening.  

data (xls)

But there’s a second, less obvious, aspect to poverty in South Africa: namely rising inequality within racial groups and especially the African community. For South Africa generally, one of the more robust measures of inequality called the Gini coefficient rose from .66 to .70 between 1993 and 2008, indicating growing inequality. But it increased even more sharply–from .54 to .62–in the African community itself.

This changing poverty profile will influence how South Africa tackles inequality. As a recent OECD report notes, “Instead of targeting action at people on grounds of race, programmes could be more effective if they focus on inequality within social groups.”as South Africa continues to try to erase the social and economic legacies of apartheid.

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