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Wealth Gap Widening Between South Africans

By Bronwen Roberts
(AFP)

The wealth disparity between whites and blacks in post-apartheid South Africa is still huge but is narrowing, while the gap is widening within the black population, a study released this week shows.

The report by the University of South Africa's (UNISA) Bureau for Economic Research is a stark reminder of the economic chasm engineered by apartheid between the country's mainly rich whites and mainly poor blacks.

Although whites make up only about 12 percent of the population, their expected combined household income for 2000 is higher than that of the combined households of blacks, who constitute about 76 percent of the population, co-author of the report Andre Ligthelm said.

Black household income for 2000 was estimated at 43.4 percent of the country's total of 603.6 billion rand (87 billion dollars), while that of white households was estimated at 44.4 percent, Ligthelm told AFP.

The situation was more skewed in 1995, when blacks took home 39.1 percent of the total household income, then at 331.6 billion rand, compared to 48 percent for whites, he said.

Ligthelm said, "The disparity between the richest 20 percent and poorest 20 percent of South Africans almost halved between 1991 and 1996."

In the same period, however, there was a huge increase in the disparity between rich blacks and poor blacks.

In 1991, the richest 20 percent of South Africans -- blacks and whites -- earned 45 rand for every one rand received by the poorest 20 percent, Ligthelm said.

By 1996, this ratio had corrected to 22 rand to the richest portion for every one rand to the poorest, according to the report, based on the 1991 and 1996 censuses and other data.

Ligthelm partly attributed this change to the increase of government pension payouts to blacks since the end of apartheid in 1994. Under apartheid, black South Africans were allocated half the pension given to whites. Government pensions are now 520 rand a month for all races.

"The affirmative action program has seen the employment of more blacks and there has been a considerable increase of blacks in the civil service," he said.

Ironically, these factors also caused the increase in the wealth disparity among blacks. Among the black population, the survey found the poorest fifth of households earned 2.6 percent of household income, while the richest fifth earned 58.9 percent, the survey said.

"In order for redistribution of income to previously disadvantaged groups to bring about a reduction in the gap between rich and poor, the greater portion of the proceeds of redistribution would need to have accrued to the poorer households," Ligthelm said.

"However, this did not occur and the richest 10 percent of black households were the largest recipients of the proceeds of distribution."

Ligthelm said the narrowing of the wealth gap between the rich and poor, was "good in the sense that huge income disparity is a recipe for conflict".

However, there was still a long way to go, he said. "The trend will continue but not at the same rate -- there was a large jump between 1994 and 1996," he said.

South Africa's poverty rate is estimated at between 30 and 40 percent. The South African Communist Party (SACP) said UNISA's findings were not surprising.

"The legacy of apartheid and capitalism remains intact," SACP media official Mazibuko Jara said.

He added that the survey highlighted the urgent need for further economic transformation to create jobs. Unemployment is estimated at about 30 percent. "Without fundamental economic transformation in favor of the poor and working people, our democracy will not be sustainable," he said


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