South Africa - the widening gap

Has among the world's largest reserves of gold and diamonds however has some of Africa's most deeply rooted social problems 2003 riots in Alexandra - Johannesberg - crowds were angry that after nine years of African National Congress government, wide disparities still existed between the wealthy (mainly white) and the poor (mainly black) Rates of violent crime are very high with over 18,000 murders each year Why are there disparities? Before 1994 and the election of the first black majority ANC government, South Africa's white dominated economy was heavily state run and subsidised To attract investment for the expansion of mining, the new ANC government cut government spending by privatisation Impacts of economic changes: Has not created many jobs Most economic growth has been capital intensive rather than labour intensive (needing large investments of money rather than a large workforce) Companies have also had to cut back on labour costs to compete Impacts of changes since 1994:South Africa is considered one of the 10 most unequal countries in the world. Inequalities have become worse because; Liberalisation (freeing of restrictions) of the economy has given the wealthy white minority more opportunities to become richer Poor are getting poorer because millions of jobs have been lost due to economic transition, doubling unemployment to 30% 50% of the population are under 18 and the economy cannot absorb thousands of school leavers everyday Exposure to global food markets has affected food prices Cuts in health spending have worsened impacts of HIV/AIDS which affect 5.3 million However there have been successes; ANC government have provided housing and water for the poor Between 1994 and 2003, 25% of the population gained access to drinking water Women no longer have to spend hours each day fetching water