Opinionista Xhanti Payi 29 July 2021

It’s time for South Africa to face the historical facts on economic inequality and civil unrest

We should have known that this moment was coming. Not from intelligence reports, as seems to be the main concern and point of contention among our political leaders, but from what history, research and the experience of other nations has displayed.

Xhanti Payi

Xhanti Payi is a writer short of a few bestselling books and a Nobel Prize. He works as an economist, researcher and adviser to various institutions. A staunch believer in clever blacks and would-be clever blacks short of opportunity. Proper pronunciation of the click is optional.

“I learnt then that financial market indicators are not the barometer of societal success. Commodity-rich economies often harbour deep economic injustices and profound societal failure while boasting high GDP figures, strong currencies and strong equity markets”, wrote a friend and colleague, Mamokete Lijane, in Business Day recently under the headline,“Strong rand reveals market indicators not a barometer of societal success”. I agree with her. 

We have allowed these truisms to lull us for too long, and even now they are being repackaged and it is dangerous. The dangers include the primacy of economic growth to solve our problems of unemployment and poverty, and the rand as an indicator of stability and progress. In this sense, Lijane, who works in fixed income sales and strategy at Absa Corporate & Investment Banking, sounds out an important warning when she says, “That the rand has been so resilient in the current unrest is welcomed. However, it also shows how little the underlying architecture of this economy has changed since apartheid years. That should worry us.” 

We should have known that this moment was coming. Not from intelligence reports, as seems to be the main concern and point of contention among our political leaders, but from what history, research and the experience of other nations has displayed.

Given our belief in the primacy of economic growth, an October 2020 working paper by the IMF, “A Vicious Cycle: How Pandemics Lead to Economic Despair and Social Unrest carried the first warnings. An analysis of data from 133 countries from 2001 to 2018 showed that social unrest increases a year after pandemics, and that “pandemics contribute to social unrest by lowering economic growth and increasing inequality, measured by the Gini coefficient”. 

A much more telling analysis was carried out by economist Seamus A Power of the University of Chicago in his 2018 paper titled, “The Deprivation-Protest Paradox: How the Perception of Unfair Economic Inequality Leads to Civic Unrest. Power gives us interesting insight as South Africans as he explores, “the rise of protest in the Republic of Ireland because of unfulfilled expectations of economic recovery and feelings of deprivation relative to others in Irish society”. Ireland, not unlike South Africa in many ways, has a long history of unrest and resistance. Initially, the Irish appeared to have accepted the harsh austerity measures which followed the 2008-2009 financial crisis and the collapse of their economy. In Power’s analysis, they did this because they believed that the harsh medicine of austerity would lead to healthy economic outcomes for all. This is not unlike how South Africans accepted the devastating lockdown measures intended to manage the spread of Covid-19. However, things changed when many in Ireland realised that the fruits or economic upturn that resulted from the economic restructuring driven by austerity measures benefited only 1% of the population, while 99% were left outside. 

During his research, Power quizzes one of the protesters about the gains from the sacrifices the Irish people had to make. He relates the responses as thus, “From his perspective, as articulated in other comments during our talk, he, and others in the 99%, are equally as capable, hardworking, and deserving as the 1%, yet they are not reaping the benefits of the economic upturn. He told me that despite his efforts to find a job, he is unemployed. The wealthy, not ordinary people, are harvesting the benefits of the aggregate economic upturn”. 

This theory of deprivation surfaced in the 1980s by sociologists like Peter Townsend, and focused on the basic needs and even lifestyle items which are accessible to other members of society or are accepted to be basic standards. Thus, the deprived group tended to organise along these lines. Townsend said people are deprived if, “they lack the types of diet, clothing, housing, household facilities and fuel and environmental, educational, working and social conditions, activities and facilities which are customary”. 

In our context, we have only seen this phenomenon in terms of inequality. Instead of it unearthing feelings of exclusion from those who have observed and analysed what has happened in this period of “insurrection”, it evoked notions of aspiration – a want of perceived luxury. In other words, as we watched people looting goods like TV sets and fridges, many asked, “How does that help you if you are hungry?” Yet we know that fridges and TVs are accepted as basic goods which allow us good fresh food and cold beverages, access to information, entertainment, and even sanity. It has been even more so under Covid-19 lockdown restrictions. For example, until the lockdown I lived without a television set. After the lockdown I bought one because it was necessary, as it has been for millions of South Africans to “get through” this period. There are not many who would not confirm that Netflix has been necessary in keeping them sane during lockdown. Thus, some have been deprived of things which others deem and accept to be necessary for a standard level of existence and even survival. 

It is only a convenience that we debate whether we are dealing with a revolution or a failed insurrection, rather than addressing the actual social phenomenon that has been built over time. Not only has Covid-19 increased deprivation in absolute terms, it has revealed relative deprivation as some have increased their fortunes and access to basic human and social amenities while others go with nothing.

As early as 2006, a team of academics and researchers drawn from Stats SA, Oxford University, and the Human Sciences Research Council, participated in work that had a specific focus on economic deprivation, using data from the 2001 census. In the Stats SA publication The Provincial Indices of Multiple Deprivation For South Africa 2001, these researchers developed “an approach to the measurement of poverty in South Africa which takes into account issues relating to income and material deprivation, employment deprivation, health deprivation, education deprivation, and the quality of the environment in which people live”. 

This was important work on which we, as a new society and given our history of exclusion, could base our measurement of human progress on “unmet needs” across different aspects of social and economic life, rather than just of an income or expenditure nature. In the context of our history of exclusion and denial, this measurement would have been extremely useful and informing. Instead, we are finding new ways of explaining away our problems – debating insurrections and counter-revolutions. As Lijane notes, “the underlying architecture of this economy has not changed since apartheid years. That should worry us.” DM

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All Comments 3

  • South africa has the highest gini coefficient; you dont need history lessons to understand thats not viable. You need honest and driven politicians to make sure that changes

  • Any thoughts on solutions? How about acknowledging that theft, incompetence and “party first” thinking have deprived a generation of South Africans of the opportunity to move up the prosperity ladder. So much squandered in such a short time. Have a look at the co-operation between business and government as a way forward.

  • I feel we should be more like Mocambique, Zaire, Congo, Zambia and Zimbabwe, where the architecture of their economies DID change post white rule.

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    "The thorny question of violence is not just a matter of tactics. It is the defining question in the life and death of [social] movements." ~ Manuel Castells