By Perry Munzwembiri
Economic inequality has dominated international economic debate recently, and with good reason. Developmental charity organisation Oxfam International made headlines not too long ago with its report which noted that the 85 richest people in the world own the wealth of half of the world`s population. The report further suggests that this is no accident either, as more often than not; these wealthy elites “co-opt the political process to rig the rules of the economic system in their favour.”
In America, the top 1 % of the population earns 95% of the total income. Yet even in the world’s largest economy, this is a very topical issue, and could yet be the flashpoint of the next Presidential election amongst the America`s electorate. Sub-Saharan Africa sees, nearly 50% of its population live on less than US$1 a day: the world`s highest rate of extreme poverty according to the African Development Bank. What truly drives economic growth is a thriving middle class that spends on goods and services, which in turn stimulates businesses. This ultimately leads to a robust economy, with solid growth prospects going forward.
Be that as it may, here in Africa, increasingly we are seeing the emergence of an elite obscenely rich section of society; “A few big men” with virtually all control of the economic factors of production. Perhaps unlike in the developed lands of Europe or America, in Africa, usually these wealthy elites have risen to prominence not because of the noble virtues of hard work and innovation. Of course to be fair, this is a broad generalisation which may not hold true for all the continent`s rich.
However evidence would seem to suggest that they have leveraged off their political connections to climb up the economic ladder. Nowhere else is this fact clearer, than in South Africa which undisputedly, is economically to Africa what America is to the world. Tokyo Sexwale, Cyril Ramaphosa, Mathews Phosa among a host of other ANC ‘cadres’ have emerged to be leaders of the pack; enjoying a greater piece of the economic pie.
China`s Deng Xiaoping, leader of People`s Republic of China after Chairman Mao`s death is still famous among other things for preaching the gospel of, “Let some people get rich first.” Ironically more than three decades later China still has to contend with the burden of massive income disparities among its population. For the first time in some 12 years, the Chinese government released its Gini coefficient (a measure of income inequality with 0 being perfect equality and 1 being perfect inequality) which stood at 0,474 in 2012. This underscoring the great schism between China`s haves and have not`s, more so after following a model that pushes one particular class to get rich at the expense of another.
What is fundamentally wrong with an approach that allows a select few individuals to get rich first and get ahead of the curve as it were, is that it breeds a sense of entitlement among the wealthy elites which can be particularly hard to get rid of in the long run. Inevitably, the incidences of corruption and graft tend to become commonplace as the politically connected wealthy elite seek to consolidate their hold on the economy. Wealth will therefore never be equitably distributed in the economy.