South Africa, not immune from the global economic downturn, is facing serious economic problems mixed with the country’s complex domestic politics. Still dealing with the consequences of pre-apartheid policies, its citizens are no longer patiently waiting for economic equality. Edson Charikinya opines on why South Africa is currently a house divided upon itself.
South Africa is endowed with a lot of mineral resources, boasting the world’s largest platinum and chrome deposits. Its economy, like most developing countries, is heavily dependent on foreign direct investments (FDI). The recent violence at a South African mine has brought global attention to the rising social tensions in South Africa. In order to understand what is fuelling this rise in tensions, one need only look at the impacts of the global economic slowdown on South Africa’s economy as well as its socio economic history.
The current economic slowdown has had negative effects on South Africa’s economy. It has led to a fall in commodity prices and a declining demand for South Africa’s traditional exports. Consequently, this has resulted in job losses in the manufacturing and construction sectors, adding to an already high national unemployment level. The weak global economy has placed significant limits on the South African economy’s capacity to create jobs at a rate that matches the number of people entering the job market. National unemployment rate stands at 25% currently. This translates to 7.5 million unemployed South Africans in a population of about 49 million, of which 51% of the unemployed are youths. It is this high rate of unemployed youths, coupled with the widening gap between the rich and the poor, which is the major source of rising social tensions in South Africa.
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| South African President, Jacob Zuma, addressing the ANC |
Since South Africa’s first democratic elections in 1994, there has been a transfer of political power from the white minority to the black majority. The African National Congress (ANC), currently the majority ruling political party, came into power promising to redress the injustices of the past and transfer more wealth to those groups in the population that were previously disadvantaged by apartheid policies.
Political freedom has yet, however, to translate into economic freedom for many black South Africans who continue to live in poverty. This is true for a considerable amount of South Africans who continue to live in informal settlements despite the end of apartheid. To most poor South Africans democracy has brought a greater realisation of the economic gap that exists between them and the rich. In response to this disillusionment many have taken to the streets in protests, in an attempt to bring attention to their plight and put pressure on government to transfer more wealth to the poor.
These protests, refered to by political analysts as the “rebellion of the poor”, have usually turned violent, resulting in the destruction of public property and loss of lives. It is generally agreed that South Africa’s apartheid legacy is the major factor responsible for the initial extreme wealth gap, pre-independence. However, its effects still accounts for why 40% of the population still continues to live in poverty. It appears also that the trend in violent protests is now becoming common even among employed, unskilled workers as they slowly start feeling the effects of the underperforming economy. The rise in unemployment has brought increased financial demands on the salaries of low-income workers, some of whom have to support unemployed family relatives. Thus, it is not only the unemployed who are now reeling in poverty; the unskilled labourers find themselves unable to escape the poverty trap despite being employed.
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| Striking miners protesting near in Rustenburg, South Africa |
The South African government, since 1994, has instituted policies aimed at empowering the previously disadvantaged groups, but this has only benefited a few. These government programs have done little to narrow the economic gap between the poor majority and the rich minority – a group that controls most of the country’s resources. Increasingly, a growing group of voices in the ruling ANC are calling for more drastic measures to be taken in order to bridge the gap between the two classes. Since the country’s most valuable natural resources are its mineral deposits, this group has proposed that the government nationalise the mines as a means of ensuring the equitable distribution of wealth generated from them. The plan is viewed as a potential threat to the interests of many large multinational mining companies that have invested heavily in the country’s mining sector.
The recent violent protests are likely to put more pressure on the South Africa government to nationalise the mining industry. As long as poverty and unemployment remains high, South Africa will continue to carry the unwanted tag of being the protest capital of the world. This tag is likely to taint South Africa’s image as a safe investment destination resulting in reduced FDI inflows. This will have a negative impact on overall economic growth resulting in greater wealth inequalities as unemployment is likely to soar. These protests have the potential to make the country ungovernable. At present there is growing distrust between the government and the general population. There is a general belief that government does not value the lives of its own people and is rather interested in safe guarding the interests of the rich.
Edson Charikinya is a Zimbabwean born Chemical Engineer based in South Africa. He is the founder and Operations Director of Innovartis Technology Systems, a Pan-African technology group delivering technology solutions and services to African communities and small-to-medium sized enterprises. He holds an MSc in Chemical Engineering and is currently a Ph.D. candidate at the University of Stellenbosch.
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