Wealth Inequality in South Africa

Due to lingering remnants of apartheid, South Africa has the highest income gap in the world, with 10% of the population owning 80% of the country’s wealth.

Town in Soweto. Eugene Wei. CC BY-NC-SA 2.0

Though apartheid ended in 1994, many traces and effects of it still exist today, almost thirty years later. The World Bank demonstrates that South Africa has the highest rate of wealth inequality out of any country in the world. The spacial and racial segregation caused by colonialism and apartheid in the 1990s continue to affect South African society.

The United Nations University (UNU) wrote a policy brief in 2019 discussing the socio-economic inequality in the country, and mentioned that a majority of the wealth earned in South Africa goes to the top 5% of people. A recent article by Bscholarly covered the richest people in South Africa, and almost all of them were white men. Many were born in the country and are old enough to have lived through apartheid, benefitting from it in a way the non-white South Africans did not. So many people were living in abject poverty during that time period, and though it is over, many people are still suffering.

In the UNU’s policy brief, they mention how equalizing wages for workers, as well as gender and racial inequality needs to be progressed. Since so much of the economic gains go to the richest people in the country, most of whom are white, the poorer, non-white people are suffering. By increasing the income of low wage workers and therefore distributing the wealth to other people, the economic disparity would decrease. Even until 2019, the average white South African was making three times more than the average black South African, and Time magazine said, in 2021, that the wealth gap in the country has not changed since apartheid ended. The effects of the racial segregation go beyond just the wage gap, into the poor education system for black Africans and even the layout of towns, since the people were forced into parts of their towns that were away from where a lot of jobs are. 

Comparison of houses. UK Department for International Development. CC BY 2.0

In addition, the COVID-19 pandemic has only served to highlight the inequalities within the country. The job market’s difficulties, in particular, were highlighted during the pandemic as unemployment increased and low wage workers suffered, much more so than their high wage counterparts. Many of these low income workers are black Africans, which further shows the racial inequalities. Younger people were also disproportionately affected by the unemployment rates compared to higher age groups. The labor inactivity, high unemployment and lack of many self-employed workers are all key factors that are affecting the labor market, and, as a result, the overall economy of the country. If the government were to invest more and build up this area, the economy would improve and the wealth disparity would decrease, since people on the lower end of it would earn more money to improve their circumstances, as well as those of the people around them. Simply strengthening the labor market and especially investing in self-employment and entrepreneurship would help this problem, especially the entrepreneurship factor, since helping people with financing and learning new skills will lead to more self-employment which would lead to the growth of smaller businesses that can help poorer groups.

To get involved:

There are multiple organizations dedicated to social justice in South Africa. For example, Oxfam South Africa is an organization working to educate people on the wealth disparity and its impacts. They also aim to create an accountable government to help the people, and protect natural resources. The effects of COVID-19 have emboldened them as the problems were highlighted from responses to the virus. 

To learn more about Oxfam South Africa or to donate to them, click here.

Other organizations such as Siyabonga Africa and CHOSA are also focused on reducing the poverty and lack of education in South Africa. Siyabonga Africa provides necessary items for the impoverished, has created various skill courses for people to learn, and supports small businesses to help people get jobs. 

To learn more about Siyabonga Africa or to donate to them, click here. 

CHOSA, the Children of South Africa, aims to reduce child poverty by focusing on families and how to improve impoverished communities. They help fund necessary expenses such as food and electricity and offer after school tutoring and mentoring to better educate the children.

To learn more about CHOSA or to donate to them, click here.

Katherine Lim

Katherine Lim is an undergraduate student at Vassar College studying English literature and Italian. She loves both reading and writing, and she hopes to pursue both in the future. With a passion for travel and nature, she wants to experience more of the world and everything it has to offer.

The Downside of Ecotourism

The term ecotourism has been around for decades but the misunderstanding and overuse of the term has led to a lack of environmental success in a CO2 sucking industry. Places like Machu Picchu now receives over 6,000 visitors a day during peak season, making it hard to properly conserve the historical site.

According to the World Travel and Tourism Council, tourism as a whole makes up 10% of global GDP and supports over 319 million jobs. That is a huge industry but it also has a huge environmental impact. Air traffic alone accounts for 5% of CO2 emissions globally and the number of air passengers is expected to only grow, reaching 13 billion by 2030. In addition, tourists often use more resources than locals, eating at restaurants, using more water, generating more waste, and driving rental cars. Often desired tourist destinations are ones of natural beauty, with high densities in coastal, mountain, and lake areas. These environments are more susceptible to environmental degradation and increased traffic to protected areas can affect conservation efforts. A potential solution: eco-tourism. 

Ecotourism was defined in 1990 by the The International Ecotourism Society (TIES) with a focus on, “responsible travel to natural areas that conserves the environment and improves the well-being of local people”. It has good intentions: natural conservation and benefiting locals. Often eco-lodges do have greener accommodations but they can often be in remote locations, therefore requiring more carbon emissions to get there. Human presence in isolated areas will always have effects on the local land and wildlife no matter how much it is tried to be controlled. The more popular eco-tourist destinations become, the harder it is to limit the impact. 

A great example of this is Machu Picchu. Tourism is the second largest industry in Peru. Machu Picchu specifically is a highly sought-after tourist destination. The tourism there has had a huge impact on the environment. UNESCO recommended the Peruvian government to limit numbers to 2,000 a day to reduce the degradation. Instead, the government switched the ticketing process to half-day tickets, effectively increasing daily numbers from 2,500 to over 6,000, with an additional 500 a day on the Inca Trail. The lack of infrastructure supporting these numbers leads to an even higher impact. There is only one bathroom at the entrance and human waste is a huge problem. The closest village, Aguas Calientes, has resorted to pumping human waste into the Urubamba River. Increases in garbage, especially plastic water bottles, on the Inca Trail also contributes to uncontrolled waste. Jobs provided to locals are seasonal, often poorly paid, and have a huge physical cost. Machu Picchu had the potential to be a great eco-tourist site but overcrowding and mismanagement has led to a lack of conservation and hurting local communities. Yet, it still viewed and even advertised as eco-tourism. 

The term ecotourism is now over used. It has been stretched from its original purpose to encompass any nature-related travel and to many is synonymous with sustainable. This is far from true and with companies using greenwashing, consumers are not sure what they are paying for. Greenwashing is when organizations falsely advertise through an environmentally-friendly lens. In tourism this is often increased by inconsistencies in certifying bodies. Or in something as simple as have a sign in the bathroom promoting water conservation. This has a huge impact on the effectiveness of ecotourism when people who are trying to be environmentally conscious end up supporting the wrong businesses. Eco-tourism also tends to draw from a wealthier demographic, with 57% of people making over $150.000 saying they would book an eco-tourist trip, compared to 16% at $34,000. This is largely influenced by the higher price of eco-tourist trips. If ecotourism is to decrease the large environmental impact of tourism as a whole, it has a lot of work to do to limit greenwashing, overcrowding, and transportation effects while increasing affordability, minimizing local impact and supporting local communities. 

DEVIN O’DONNELL

Devin’s interest in travel was cemented by a multi-month trip to East Africa when she was 19. Since then, she has continued to have immersive experiences on multiple continents. Devin has written for a start-up news site and graduated from the University of Michigan with a degree in Neuroscience.

Chile Protests Escalate as Widespread Dissatisfaction Shakes Foundations of Country’s Economic Success Story

Chile’s capital city Santiago appears dynamic and bustling, complete with gleaming skyscrapers and a modern metro network. Against the backdrop of the snow-topped Andes mountains, the Costanera Tower – South America’s tallest building – symbolises the country’s open neoliberal economy and mass consumption society. 

But protests have rocked the country, challenging this image of stability and prosperity.

Following a government proposal to increase the price of metro tickets, students began to dodge metro fares in protest on October 14, jumping the turnstiles en masse and setting metro stations on fire. The protests soon spread within Santiago and to other Chilean cities, leading President Sebastian Piñera to declare a state of emergency and daily curfews on October 18. This legislation, which dates from the dictatorship era of the 1970s and 80s, allows the military to patrol the streets. 

But the move has led to an escalation of the protests, as thousands of Chileans disobeyed the curfews by marching peacefully against government policy and violent repression on a daily basis, calling for Piñera to resign.

The images of soldiers and tanks on the streets, dispersing protesters with water cannon, tear gas, and physical violence, recall the images of military repression during the dictatorship of Augusto Pinochet between 1973 and 1990. The economic and ideological legacies of the Pinochet era as well as the nature of Chile’s transition to democracy are key to understanding the reasons for the protests. The anger of those on the streets is as much a reflection of the country’s high inequality as it is of these unresolved legacies.

Much of the media coverage of the protests has focused on the spectacle of looting, vandalism, and soldiers beating the protesters. Since the protests started, 18 people have died and there have been 3,000 arrests. But there are wider causes behind these events. The protests emerged in the middle of growing dissatisfaction with high levels of inequality and a high cost of living. 

Income inequality has not improved in Chile since the days of the military dictatorship. World Inequality Database

On the surface, Chile looks like an economic and political success story, as the country’s GDP growth has outpaced that of Latin America as a whole in recent years, but many Chileans are struggling. The metro fares have come to symbolise what they feel is the unjust distribution of income and social spending. 

Legacy of Pinochet era

Like the state of emergency, Chile’s social and economic policies also date from the dictatorship. Neoliberal reforms were introduced in the mid-1970s by Pinochet and his team of American-trained economists, known as the “Chicago Boys”. The reforms took place in the context of violent repression. Official investigations showed that 3,065 people were murdered by state agents during the dictatorship, 40,000 tortured, and hundreds of thousands forced into exile.

The 1970s reforms included the elimination of subsidies, welfare reform, and the privatisation of state-owned companies, the health sector, education and pensions. Pinochet’s reforms led to high levels of unemployment, declining real wages, and expensive social services, such as education. The impact is clear today in education, characterised by low levels of public spending and highly unequal access to good-quality schools and universities. Between 2011 and 2013 students organised mass demonstrations against Chile’s education policies, and dissatisfaction remains.

Chile turned from a military to a civilian government in 1990, following the 1988 referendum in which Pinochet was defeated. But due to the nature of the transition, social and economic policies changed very little. Pinochet negotiated his departure in such a way that the armed forces kept control of the political process, including his own appointment as a lifelong senator. The 1980 military constitution – which is still in place today – has allowed Piñera to declare the controversial state of emergency to deal with the protests. Although some of the military control structures have been dismantled since Pinochet’s death in 2006, the civilian governments on the right and the left have had a limited appetite to address the country’s inequalities.

Anger on the streets of Santiago. Fernando Bizerra Jr/EPA

In response to the protests, on October 22 Piñera suspended the planned fare increases and announced a spending package of reforms to address the protestors’ concerns. The fact that Chileans continue to protest around the country shows that many people feel these measures are too little, too late. 

Given the long historical roots of the inequalities, it’s unlikely that one-off extra spending can address the country’s structural problems. Even if the government’s intention has been to de-escalate the situation, its hardline response to the protests signals growing polarisation rather than a quick resolution to the issues.

Marieke Riethof is a Senior Lecturer in Latin American Politics, University of Liverpool

THIS ARTICLE WAS ORIGINALLY PUBLISHED ON THE CONVERSATION